FIREside Chats

MFdreamer

Great idea!

I’ve been very focused on becoming MF which I know is psychologically driven and probably isn’t the most efficient use of my money! However, I’m pretty close to becoming MF now (well mortgage neutral as I have an offset mortgage) so can probably have that done in 15 months if I’m careful which will be when I’m 39.

My plan after that is to really focus on my pension and investments. I do have a small share portfolio currently (popping £100 a month into it) and my DC pensions from employers total around £70k at the moment so I’m not in bad shape. Once my mortgage is done, I plan to pop £100 a month into my 2 old DC pensions and increase my current salary sacrifice to what my mortgage payment currently is (as I won’t miss the money).

Would definitely like to follow this thread and share non scary FIRE strategies! I find investing quite scary as it’s so complex!

Busy_Mee

Hi Ed. Great idea, I hope you are going to let the nearly retired in   I've only got 17 weeks to work but want to carry on with some longer term investments.

 We are fortunate to have two Civil Service DB pensions, but I have in recent years invested in a SIPP with Vanguard to take advantage of the tax relief. Otherwise I have taken the very cautious approach of using fixed rate cash savings for our mortgage offset funds, and that has given us a moderate return but rates are pitiful now, so we need to do something a bit braver.

ElmoR

Thank you @edinburgher for this brilliant idea and making a homey environment to discuss FIRE topics. My hat is off to you and anyone who has been savvy about finances from a ‘young’ (-it’s relative) age. I’m trying to explain such things to my teenager now, which is hard work given their social media/generational differences (is there an explainer on tic tok? does anyone know?).

Why investing? FIRE at 60 is the plan. Similar to @Floraandfauna

How much do we need? Not sure, my spreadsheeting is half formed. The part unicorn pension (details below) gives a current prediction of £22k yearly benefit when I reach 60 (and a one off tax free lump sum of £65k). The other pots are titchy so far (£8K ISA plus £9k emergency savings pot, SIPP empty just now) and I am aiming for mounting up £70K to bridge the 60 to 67 years after which state pension hopefully still exists and comes in.

How am I getting there? I’m not right now, I’m part paralysed by indecision, part baffled. My story may be a tale of “how not to start” perhaps?

How long do we have? 52 now…so 8 years ish.

A FIREside chat is perfect. It needs to be somewhere warm and fuzzy because I’m coming in from the cold outdoors (of having very little financial savviness) and mid ‘car crash’. Why does it feel like a car crash? Mainly because this is all very new and it seems impenetrable. I have read the Monevator fairly regularly for the past year and also Simon Sinek’s book “It’s Better Together”, as well as Housel’s “The Psychology of Money”. Like the rest of you so far posted, I sign up to the idea of passive investing and get the idea of investment trusts and their spread (though not the details). Following those principles led to a new Vanguard S&S ISA account (Lifestyle 60:40) last year and this past month – a H&L SIPP set up.

Much of this was from reading the forums and helpful posts.

 

Then I got unstuck and am stuttering to get my FIRE plan on track. I’m 52 and would like to ‘pull the pin’ at 60, or earlier if I can afford to. I’m struggling with a plan for two reasons... this is where I am hoping that either typing out loud, or feedback from you guys may help? Sorry, this is a bit of a long read…I won’t be offended if you stop reading now! It gets gory.

 

Bit of background (sorry if this gets boring…), I have a work place pension – University Superannuation Scheme over which a dark cloud is hovering. My financial savvy FIL was horrified at the lack of equities the scheme holds and couldn’t fathom how their performance was so mediocre given the size of the scheme (largest private pension in the UK?). I also feel cross with them for killing the final salary scheme several years ago and now talking about increasing contributions/cutting benefits again. That said, I know that the employer’s contributions (a massive 21% from them, just under 9% by me) and remaining half a unicorn benefits part is something to hold onto firmly. Two months ago, I decided to make additional contributions up to 15% which made less of a dent on my take home because I’m in that lofty tax bracket (just, and only arrived in the last few years). Then, after chat with FIL, I had an about turn, stopped those additional pension contributions (via salary sacrifice) and opened the H&L SIPP. This month, the additional money goes there and is split between 5 investment trusts. I know that this now requires me to claim the additional tax back at the next tax year deadline.

In short, I’m wondering if I’m doing the right thing now? Is this the best course?

 

The second issue is something that provokes a complete silence on the ‘other’ boards. The emotional aspects of money. I feel like a mutant. For some reason, I would rather sacrifice profits for peace of mind? For instance, I read about investing in property, but unless I was helping my daughter buy a place, I don’t feel comfortable making money from tenants who cannot afford to get on the property ladder. I also hoard money and find it hard to spend it. The mortgage is gone and, yes, I sleep better now, it was like a massive weight lifted. All, that said, we have a very priviledged life, a nice home (one more bedroom that we need for 3 people, a garden back and front, pets, two functioning cars to get to our jobs/share with the DD when she starts lessons soon…, a greenhouse!). Like @jennystarpepper, we don’t eat out much, though we do have a monthly takeaway. I don’t aspire to anything more other than wanting to move on retirement to somewhere more rural (a converted barn is a dream). Travelled all over the planet and did exciting stuff as part of my job, so no wanderlust and DH is happiest shooting elves on a PC or pottering in his workshop (AKA the garage) making things. There are almost certainly scars from a relatively poor family background, and still remembering not having enough food to eat at the end of the week before parent’s pay day, and also working at all the various swimming baths/sports centres in Edinburgh alongside studying to get degrees. Some writers talk about people having experienced adversity being very risk averse money-wise?  I certainly still have 1980s student finances mentality, save, save, save, avoid all debt. Until the S&S ISA last year, cash was building up in pitiful interest rate savings accounts, an emergency pot now stays there, some is now working harder. I did make a small monthly drip feed of £50 into an Investment Trust (Foreign and Colonial as it was) as a way to save for my DD when she was born, and that has grown considerably over the 17 years, so a positive experience there.

 

Familywise, I’m the main wage earner (which feels bizarre at times) and DH has started a new job within past few years that now has a small People’s Pension pot. We are looking into adding more to that if his employer matches it etc. He’s got more National Insurance stamps than me because, while being younger, he didn’t go galavanting off to work abroad for several years. When I’m 60, both of us have the full quota of stamps. DD has a pot that she doesn’t fully know about that is mostly Cash ISA getting an OK interest rate. In an ideal world she won’t blow that at 18. Right now, she doesn’t know what she is doing after A levels…being a pilot has recently been mentioned much to our horror (>£80 k to qualify and no university).

 

So the numbers here are not huge. I’m like you in that I like punting small bonus cash towards the cause too but didn’t realise you could do that and haven’t been doing it. Useful to learn that you can edinburgher! Just checked, and it turns H&L SIPP do £50 blobs as investments but you can build cash up in their holding pot. My knees knock at the thought of how much is now siphoning into the SIPP (£500 a month) and the ISA (also £500 a month), little dribbles scare me less. The tax return that will be required in future to claw back the tax relief already fills me with dread having never done one. Yet I know that I’ve been ‘dumb’ to date, there’s probably tax relief from the past few years that I’ve now lost? Though maybe that can be back-dated if I move cash from savings to the SIPP? Zealous optimism is crowded out by crushing indecision.

 

My spreadsheet is half formed, an embarrassment after the MFW spreadsheeting prowess. Not sure what I should be tracking each month? The ups and downs shown on the website platforms make the knees knock harder.

 

Do I have the necessary robustness and smarts to reach FIRE?? Thanks for reading this far, I feel like I dumped a mess all over the FIRE-side living room cottage floor.

ElmoR xx

 

 

FloraandFauna

ElmoR said:

Do I have the necessary robustness and smarts to reach FIRE?? Thanks for reading this far, I feel like I dumped a mess all over the FIRE-side living room cottage floor.

ElmoR xx

 

 

Yes. Yes, you do.

I think my first line was "I'm a ditherer", and that's because I don't fully understand all the ramifications of all the choices of all the alternatives. Much like your post. 

But I'm saying "yes, you do", because you've already started. You've set some things in motion that will payoff down the line. You can now relax a bit and take your time learning about all the what-ifs because you're already in motion. Take your indecision and gently chip away at it by learning more - you can always amend your plans/change your funds/change your focus. You don't have to get it right Right Now.

Sholly

Hi all!

I'd just posted something FIRE related in my diary so have copied and pasted here (lazy, I know 😂)

At the moment, the predictions show that I could officially retire at 57 (likely to be the new minimum age) with a lump sum of £82,100 and an annual income of just over £18,000, not including my rental income (currently £975 per month). My net worth hit £200k in March, but a lot of this is tied up in house equity, so I could free it up by moving if I needed or wanted to. I think I will downsize when my son flies the nest – maybe this is the key to retiring early. My son is almost 13 and has indicated that he wants to go to university which he would do in September 2026 if he follows the straight-from-college path. For his consistency, we’ll definitely stay in our current home until at least 2026 when he goes to uni and I’ll support him financially until he finishes in 2029. But assuming that I keep the house for another few years after that, until it’s paid off 12 years from now, and then sell it, this could be the date that I am financially independent and can ‘retire’; I could sell the house for £320,000 and use £150,000 to buy a new house outright, which would leave me with £170,000 in the pot. If I split this pot equally between 132 months (from age 46 when the mortgage is paid off to 57 when I can take my pension), I’d have £1,287 per month plus the rental income of £975 = £2,262. Without my residential mortgage, my current bills would be £796 including all direct debits, sinking funds, groceries and fuel, which leaves plenty for travel/fun/investing. I think this is probably lean FIRE but I’m not very good at spending money on non-essentials for myself so it’s highly unlikely that I’d spend the full amount every month. By this time, I would also have paid around £100,000 into my S&S ISA and hopefully it will have grown. Nearer the time, I would need to understand what impact leaving work early would have on my pension and would look continue to pay into a pension in some form between 46 and 57 if necessary. So there is more to think about, but it feels really exciting to think that I could FIRE in 12 years.

Nurse2047

Why investing? FIRE at 60 is the plan, retirement age is 68 in the NHS however don't think would survive that long  I'm 41 now.

How much do i need? Approx. 18k per year. Hope to build up about 100K to bridge the 60 to 68 years after which state pension hopefully still exists and comes in. So I have about 18 years to save...scary thought though

How am I getting there? I set up this year a S&S Isa with Vanguard and a separate SIPP with Vanguard. Im paying max additional payments of £6500 a year into my NHS pension and a small £45 a month NHS AVC with Prudential.

I am paying £200 a month into S&S ISA into Lifestrategy 60/40 fund https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds but know I will need to contribute more when i can work more hours as time goes on. Hoping compounding interest also helps  

I also pay £80 into SIPP into https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds which the gov top up to £100. 

I have found youtube- Mamafurfur, Damien talks money and the Humble Penny great to help me understand about stocks and shares/pensions etc

How long do we have? 18 years

Trying to balance Mortgage overpayments amongst all this also

rara32

Fantastic thread.  I don't normally post, even though I have lurked on these boards for over 10 years, however reading the previous posts I feel at home already.  I just read Grogged's latest posts too, which are really helpful for anyone starting out on FIRE or looking to structure things more.   I love the Number Thread on the pensions board and that was enormously helpful in arriving at my numbers for retirement.  Minimum: 25k  Ideal: 36k and Luxury 40k +.  We were MF until 2 years ago when we upsized and moved into an area with good schools so these do include mortgage for me as I still have a £200k + mortgage but no other debts.  Our approach this time is to save and invest for retirement with just small payments to the mortgage but there is an option of downsizing if we wanted but I don't include that currently.  
Why? We'd like to retire early, by 55 would be amazing but 58 - 60 is more likely.
How much/how to get there? We have been very fortunate to benefit from working in good jobs in a range of public sector organisations over the last 20 odd years and so between us (me and DH) we have 6 DB pensions. As at todays valuations by 67/8 with State pension we are already at our luxury number even if we don't save anything further. The issue for us is early retirement without sacrificing too much of the DB pensions in reductions. So We are investing in Vanguard S&S Isa and I have recently opened a Vanguard SIPP to get additional benefits of being in HRT band - I reckon we need at least £250k. We also have a large cash reserve which is not sensible from a financial perspective but allows us to sleep at night but we are slowly rebalancing that transferring some of that to the S&S and SIPP (both are 80/20 at the moment) and all saving from here will go in to those. Alongside this, I also take part in the 1% challenge for the mortgage.
How long? Like others we don't buy flash cars/designer anything however we definitely don't go without I think we just spend the money we have on the things that matter to us and importantly things that last. I think this has been the reason we are in such a good place currently as our lifestyle has not inflated with salary increases over the years. We are 45/6 and I am giving us 10-15 years to do this but DH is one year into a 2yr career break (planned pre-covid) and so the plan is that whatever he earns when he returns to work will just go into the savings and pensions but there is minimal 'new' money going in at the moment rather savings we already have so I can maximise HRT relief through the SIPP. 
The Psychology - Similar to others I don't need to worry about money however I can easily over obsess at times, have trouble spending money and constantly wonder if I am doing the right thing - however I am sure that the ISAs and pensions are the right thing to do and that if it allows me to sleep at night then holding cash (at a level I feel happy with), whilst not financially right, is definitely right for my peace of mind and happiness. I follow the Escape Artist Blog, love Alvin Hall and my favourite book about money is the School of Life's 'How to worry less about Money' it's all about the psychology and how your money blueprint can still be influenced by your childhood and things that are no longer true - it's one I go back to time and again as it is also helpful in reviewing your higher purpose and what you want from life (including retirement). 
Can't wait to read more people's stories Thanks again Edinburgher for setting this up.

edinburgher

@ElmoR @Sholly @rara32 - welcome aboard

It is interesting to see quite a few other public sector folks (represent), but I'm also intrigued to see some relatively conservative approaches to investment considering the gold bottomed, copper plated, titanium emebellished pensions that we get to enjoy in lieu of competitive salaries. Do public sector jobs just attract worriers?

ElmoR - the shooting elves comment made me chuckle Is there any particular reason why you've opted for passive investing with Vanguard for ISAs but investment trusts via HL (the rather swishy fancypants side of investing) for SIPP? Re. additional benefits - where were the extra payments going? Because if your pension is underfunded (I'm a member of the Strathclyde Pension Scheme, which seems ok), I understand the worry. If, however, your salary sacrifice payments were going into AVC-like investments, I'm not sure cancelling them was the best move. Was the extra money buying more benefits in the main scheme, or funds/shares elsewhere? Salary sacrifice is a great way to pay into a pension, Mrs E's current workplace pension uses it, but only up to 20% of her wages.

MFW2026 - I hope I don't come across as rude, but are you a singleton? If not, remember that additional pension only covers you, not any dependents and that it will die with you I have considered and written off additional pension for this reason, I couldn't find a practical way to insure against the loss should I kick the bucket promptly

rara32 - it sounds like you're in a good position. I wouldn't worry about the mortgage debt, I also owe a ton of money I'm avoiding paying off any time soon. Who knows, maybe if my pension gets big enough I can pay it off with my pension commencement lump sum (PCLS)   

I was feeling a bit skint today, so used Nect@r points to buy (most) of a new whirligig from @rgos. This saved £52.50 from the Home Maintenance budget, £26.28 of which I paid into the SIPP (topped up to £32.85 by the gummint). Our Vanguard SIPPs have passed £100k combined again

Nurse2047

@edinburgher I have chosen dependants cover that increases my pension and the benefits payable to my spouse & children after my death

edinburgher

@MFW2026 - excellent - not an option for the Local Government Pension Scheme