FIREside Chats

South_coast

I knew not having kids was one of my better financial decisions 🤣!

Karmacat

Ed, I only read a couple of pages, so I don't have a sense of the whole thing yet.  What do you mean by "gatekeepery", sorry?  Though getting told off for going off on tangents might be what you mean?  Oh dear, in that case, I do love my tangents 

rara32

I'd only got to page 6 of the thread when I posted the link this morning but now I've read more I see what you mean Edinburgher 😂 
That is some potential adjustment to your target number. I've not reviewed mine yet but I it will be interesting to see what it shows.

edinburgher

@Karmacat - one person playing mum/dad and bossing everyone about in an attempt to keep the thread on track (as they see it). An unofficial moderator

Suffolk_lass

edinburgher said:

@Karmacat - one person playing mum/dad and bossing everyone about in an attempt to keep the thread on track (as they see it). An unofficial moderator

I gave up reading it at that point.

By the way, did anyone see the article in yesterday's The Times Money section about value of pension pots catching people out when they reach 75? - the £1.073m lifetime allowance gets really hammered by tax if it is exceeded (185 if you are a standard rate tax-payer at this point. My DB pension (less than the maximum number of years and middle-manager level was when I took it) was valued at well over £600k and had I invested in a SIPP rather than ISA I can see how reaching that level over twenty years instead of ten would have brought me very close to that figure.

So another thing to check with boosting stock markets is that you are not getting too close to the magic figures as you focus on stock market investments with your ongoing savings and have a back up strategy for what you do with that money

QueenJess

I think pension must be a temporary hot topic again as I had a survey on it the other day. They tend to only do hot topics and I often see them used in the papers.

I haven't read up on the lifetime allowance as right now I can't see how I would ever breach it. But I do remember seeing posts about DB pensions being calculated different in relation to the LA and they are better from that perspective. I'm sure also that there are things you can do from a planning perspective if you think you will breach and it's not the end of the world. Unfortunately it's not something I need to look into! 

Karmacat

edinburgher said:

@Karmacat - one person playing mum/dad and bossing everyone about in an attempt to keep the thread on track (as they see it). An unofficial moderator

Thanks for that    Yeah, tangents are my thing 

edinburgher

@Suffolk_lass - I didn't see that - slightly cut off from the world yesterday as DD needed a Covid test (thankfully negative) and we were all isolating. Do you have a link or article title for me? Fortunately/unfortunately, there's very little risk of us breaching the LTA unless the economy somehow explodes over the next 20 years! With the challenges of the post-Covid world (we'll get there), climate change and populations growing older around the world, I can't see that happening. Two main considerations being:

1) I'm not really sure what counts as middle management   My current grade tops out at just over £42,000, will be there by October. At present, my DB pensions are worth £5,400/year. Because I only got my current job a few years ago (and because it's career average, not FS), I think I'm unlikely to ever go past £22,500/year (current + 20 years and a couple ££££ added on for inflation adjustments), maybe slightly less. So say £560,000 if they rate DB pensions at 25x (pretty sure they don't). I'm looking for new jobs, but realistically my career tops out at £50k unless you become a senior manager. I've no drive to be a senior manager, stressful enough being a senior officer with a specialist subject

2) I can't see my DC pension coming anywhere close to £340,000. Considering the rule of 72, I'd need a rate of return of over 7%/year for 20 years to get my current £64,000 SIPP to £256,000 (no further contributions). I can't see that happening. Not to say there won't be any further contributions (there will be, lots), but we will stop using SIPPs bar employer matched free money at a certain point, perhaps 5 years before retirement and start using ISAs. Mrs E unlikely to have more than £300,000 in hers.

Still, these amounts will seem massive to some people, so very much grateful for everything we have. If we do end up in this fantastically first world position, we will count ourselves lucky

LadyGnome

Thanks for this thread Ed which I've just found (I know late to the party)
I've been thinking that I need to have a think about pensions again.
Why am I investing?
I am 51 and MrG is 56 so we have about 10 years to make sure everything is sorted out.  MrG is self employed so can work or not work as he wishes.  I am the main earner and I don't want to be obliged to plough on to 67.
How much?
Probably less than I think.  I am a high earner but we are not particularly spendthrift - our two big expenses are school fees (4 years left for 1 child the other has just finished) and clearing the mortgage which I plan to do in the next 7 years.  My starting point is  £35k pa  and anything more than that would be lovely.
How will we get there?
We are on track.  I have a small DB pension (I need to check how much I assume £2k pa) and a good DC pot which I am hoping will bring in £20K+ a year.  I am currently contributing to a different pension via my contracting role.  At some point I will have to consolidate everything.  MrG being self employed and somewhat pension avoidant (he comes from a country where this sort of financial planning just doesn't happen) doesn't have much of a pot.  However we do have BTL income which I think is in effect his pension.  I have full SP contribs but MrG was short because he was a SAHD for a number of years when we didn't get Child Benefit.  However, we found that he could claim pension contributions as a carer for the children because I had been paying NI during the relevant period so nobody had got the pension credits.  8 years of pension credits for the price of a stamp.  He is paying NI contribs via his self employment now.
How long?
In terms of retirement income if we carry on doing what we are doing we would be fine at SPA or when I get my DC pension.  However, I need to clear the mortgage and school fees ASAP.  I also want to be in a position to give some support to the children when they are starting out.  We could downsize as we have a good amount of equity but we would probably have to move further out of London and I don't really want to do that - I like where we live and it would be a very manageable location when we are older.  I really would like have the option of cutting back from 60 onwards.  I have a Cash ISA with about £19k which is part of my retire early fund along with the rental income.  That would mean I could leave just before age 64 so clearly some more work is needed.  

Suffolk_lass

@edinburgher I've PM'd you