FIREside Chats

edinburgher

@rugbymadfamily - 63? What do you know that I don't? 

rugbymadfamily

Sorry probably wasn't clear, I think the that retirement age will be 73 by the time I get closer and therefore I wouldnt be able to access SIPP until 10 years before this (ie 63). I work in finance and there's no certainty but I'd be fairly certain it will be over 70 by time I ge there!

gallygirl

edinburgher said:

I'm not sure where @gallygirl is buying her coffee, £4 is brutal! I wouldn't say I have a shop bought coffee habit, but in the year prior to lockdown I probably bought 1-2 @ week, every week at a cost of perhaps £3.75 (we'll average it out). 

I justified it to myself as helping a business that offered jobs to those who might find it difficult to get a job elsewhere, including people with disabilities and those unable to work for more than a few hours due to health/MH issues. I also used the "well deserved treat" line (I worked 35 hours over 4 days, with a 30 min break each day). 

I don't think those thoughts were inherently "wrong", but thinking back, it seems out of tune with my longer term plans. Even £3.75 a week is £195 a year, which might become £400 after 20. I love coffee, good coffee, but we also have a bean to cup coffee machine at home, nice travel mugs and plenty of coffee.

Perhaps when I go back I'll make it a once a month treat...

Aren't the large Xmas coffees around four pounds (got a Spanish keyboard now which doesn't have a pound symbol!!!). I pay €1.50 for a mug which comes with a nice piece of home-made cake

I used to treat myself to an extra-large skinny latte on the days I went in to London and managed to get to station early enough (but max one a week and using loyalty card and quite often I was running for the train so no time). Realistically it would be one or two a month and because it was so rare it was a real treat. Mindful spending is the key I think, doing it every day isn't there a risk it just becomes something you do rather than something you really enjoy?

gallygirl

rugbymadfamily said:

Sorry probably wasn't clear, I think the that retirement age will be 73 by the time I get closer and therefore I wouldnt be able to access SIPP until 10 years before this (ie 63). I work in finance and there's no certainty but I'd be fairly certain it will be over 70 by time I ge there!

That was why I accessed my SIPP at 55 though I didn't really need to at that stage - I felt pretty confident the govt wouldn't change rules once in drawdown but I could see them changing them before I accessed it!

South_coast

Tartan_Mum said:

I have a confession to make 😳 

Sometimes I do buy grated cheese especially mozzarella for home made pizzas. 

Do I need to turn in my MFW wings? 😱

I have also been known to buy grated cheese - much tastier than grated knuckles/fingernails, which is what tends to happen when I go near a cheese-grater 🙄 My preferred solution is just to ask BF to grate some for me though 🤣

taka

Ohhh this thread looks interesting! I'm mortgage free now so now I'd also like to be more finantially free to do whatever I chose! No dependants so just me to worry about & plan for.

Apologies - this is rather long...

Why am I investing?

I don't want to work till I drop. My parents both passed away at 70. My Mum especially had so many regrets in her last weeks about what she didn't manage to do or see and I would dearly love that not to be the case with me. Much as I enjoy my job there are other things I'd like to have the time to do / see too!

How much do I think I'll need?

I think somewhere between 16 and 18k (net). If I aim for 18k net that means I'll need to have 19.4k gross to allow for tax using todays money and tax bands etc. I've spend around 10-12k pa (less in 2020!) for the last few years but I was caring for one or both of my parents for much of that time & working full time so had limited time to do much and any holidays longer than a long weekend weren't really an option. Hopefully that extra 4-8k would allow for a bit more fun, holidays and hobbies and to run a car! 🥳

How am I going to get there? -

1. I'm also an USS member (lots of us here! 😄) which will give me £5.5k @NPA (66 and increasing!). I have been a USS member on and off over the years so I have bits in FS, CARE and the current Hybrid scheme all subject to slightly different reductions for taking early. I also have another deferred DB which will give me £2.4k @65 also from the same employer. Both are CPI linked (though capped). Currently still accruing USS DB pension.
   
2. Pay another 11 years NI contributions to get full state pension. Currently this is due to be @67 but am doing my calculations as if it will be 68 as an increase to 68 is already being mooted for my DOB.
3. USS is a hybrid scheme so I voluntarily add contributions to the DC part via salary sacrifice. I don't earn enough to have any employer contributions being made to the DC part. Am in the Growth fund which means I pay no fees for this (they are covered by the subsidy). Have just (hopefully!) increased this % as of this month. Am hoping some of this will be used to either exchange for increased amount of DB pension (hopefully mitigating some of the early retirement reductions?) / increase the tax free amount I can get above the 3xpension standard amount / taking and using to bridge the gap until the DB kicks in. All up in the air as to exactly which as the scheme changes so often... Have the princely sum of 14k in there currently so have a way to go! 🤣
   
4. Just opened an S&S ISA (20k) at the end of the tax year which is earmarked for my retirement.
   
5. Inheritance... 😥 Mum passed away a couple of years ago and Dad last year. We're still clearing their house (hoarders - it is hard going) but the plan is for my brother to sell his property & buy me out. It is a life distorting amount to inherit. I'd like to move somewhere a wee bit larger (with less immediate neighbours!), hopefully with a garden, which will use up a chunk of it. The rest - is a bit undecided - but adding a bit to the retirement pot &/or S&S ISA and /or possibly work part time if I fancy it and have a pot to allow travel and living life to the full are definitely high up on the wish list!
   

USS is a mess and will no doubt change umpteen times (all for the worse 😒 ) before I retire so any plans involving this are rather loose! An increase from 9.6% to 11% employee contributions for the DB scheme from Oct 2021 was already agreed after the previous valuation. The dire 31st March 2020 valuation (fab timing there! 💩) means further increases in contributions and/ or cut in the 1/75th of salary per year for the DB part  / lowering the salary cut off for the DB part or varations thereof is in the offing shortly too.

If I take the DB pensions at NPA, them plus my state pension = 2.4k + 5.5k + 9.3k = 17.2k gross (so at the lower end of my 16-18k net hopes) so mostly I need to plug the retiring early "gap".

Have just increased my salary sacrifice to levels which will leave me with ~£18k net so we'll see how realistic that is to live on!

How long do I have?

I'm 45. State pension age was 60 when I left school so I have absolutely no wish to work longer than this. I'd prefer to retire earlier than this but we'll see how things go! Pondering if working full time till 50ish then dropping to part time might be feasible.

First thing is getting myself in a better place mentally though. The last few years have been really, really tough and meant much of my life was on hold due to caring for my parents. Am having counselling and trying to working out what kind of life I'd like going forwards. Also need to loose a depressing amount of weight... Oh and finally learn to drive! 🤣

Also... I buy grated mozzarella for hm pizzas too. Can I still stay please? I tend to freeze it as I don't use much at a time and freezing it means it keeps for longer and less goes to waste! 🤣

QueenJess

South_coast said:

Tartan_Mum said:

I have a confession to make 😳 

Sometimes I do buy grated cheese especially mozzarella for home made pizzas. 

Do I need to turn in my MFW wings? 😱

I have also been known to buy grated cheese - much tastier than grated knuckles/fingernails, which is what tends to happen when I go near a cheese-grater 🙄 My preferred solution is just to ask BF to grate some for me though 🤣

Lol. I'm fine with cheese, but my heart sinks when recipes call for grated carrot or other veg.

edinburgher

@QueenJess - a human body needs a certain amount of ground knuckle 

taka

edinburgher said:

@QueenJess - a human body needs a certain amount of ground knuckle 

Ewwwww!! 🤢 🤣

Karmacat

taka said:

Ohhh this thread looks interesting! I'm mortgage free now so now I'd also like to be more finantially free to do whatever I chose! No dependants so just me to worry about & plan for.

......

How long do I have?

I'm 45. State pension age was 60 when I left school so I have absolutely no wish to work longer than this. I'd prefer to retire earlier than this but we'll see how things go! Pondering if working full time till 50ish then dropping to part time might be feasible.

First thing is getting myself in a better place mentally though. The last few years have been really, really tough and meant much of my life was on hold due to caring for my parents. Am having counselling and trying to working out what kind of life I'd like going forwards. Also need to loose a depressing amount of weight... Oh and finally learn to drive! 🤣

Also... I buy grated mozzarella for hm pizzas too. Can I still stay please? I tend to freeze it as I don't use much at a time and freezing it means it keeps for longer and less goes to waste! 🤣

Hi taka!  Lots of similarities between you and me-at-that-age.  Sorry to hear you're still going through clearing your mum and dad's house.  That only happened for me when I was already in my 60s, and it took quite a few years, for various horrific reasons; it also wasn't life changing dosh in quite the same way, I don't think, but it *did* enable me to manage to buy a proper modern kitchen, a very big deal for me.  

I have absolutely no knowledge of USS etc pensions, so can't really give you any advice. 

But I will say about budgetting: I don't budget for house maintenance or holidays at all.  If the house absolutely *needs* maintenance, I spend it - all the storm damage on the fences, or the repointing, double glazing that's died, that sort of thing.  And while I can travel, I *will* travel.  If money gets sticky, I'll look again.  

I've mentioned that for health/energy reasons, I go on cruises: I only paid the going rate for the first one, others have all had reductions of 20% or more.  It might mean, on the smaller lines like Fred Olsen, you can't use your restaurant sitting - I can't delay my evening meal till 8.30 at night, that's not feasible for me.  But the buffet is still pretty glorious and for a 40% reduction, that's fine.  

I'll make the money as stretchy as I can - 40% off is a good start As well as going out of school holidays, which I'm pretty sure you already do.