FIREside Chats

edinburgher

Month end summary:

NW: £644,985.05 (+£3,709.43) / Target: £937,455 (-£80,982) / 68.80% there

A disappointing month in which an unexpected £500 car repair appeared and during which the heavy lifting was done by my DB pension and by recalculating expected retirement costs. Onwards and upwards!

Grogged

May Pension Summary

End 2020            £221,400

May 2021           £247,300

Change               £25,900 (in May £2,886)

%Change            11.7%

Target                 £350,000

 

Pension (as dividends if taken today)

Annually             £5,114 (Monthly £426)

Target                 £8,761

The state pension would be added on top of that (another £9,300 at today’s rate).

Most of May's gain (£1,800) came from our monthly contributions and dividend payments.  It wasn't a great month for the stock market (a bit like the weather really...) 

slowlyfading

Dividend income for May comes in at £194.88 - so the best so far this year! We're aiming for £1,000 a month so still a waaaay off this but it's progress. Small, but progress.

ElmoR

Good morning Firesiders

Quick update from 'ere abouts...Monthly pension avcs chugging along, still no idea what will happen to the DB part of the pension so no sums possible there. Maybe next year? Maybe strike action too

The SIPPs cheer me up though because that is something concrete in that you put the money in, it goes up and down, but you can see what it's doing and your know it'll continue to go up and down in a viewable manner. Much better. The SIPPs and ISA count towards the FIRE goal 1, the bridge from 60 to 67 years old. It broke the 60% barrier this week

Still waiting for the tax relief to land in these accounts from April, which is when I set the two up. It's rather confusing because one platform counts the tax relief and the other doesn't.

And the passive funds v the active funds experiment - passive winning still. Two of the three active trusts are doing ok but one is absolutely tanking. It's the one that relies on UK consumers getting out and spending...

Hope you are all edging towards your goals, but do please still do some consumerist spending

ElmoR

OhIJustLostMyShoe

All going in the right overall direction for me, but definitely more in the "chugging along" space.
One thing I like is that between the mortgage payments, pension investments going in and so on, even if my investments don't have a great month, at least something is doing well and ticking up.

I have a small amount in crypto (I'm really not that convinced by it as an investment, but where there are tangible short-term benefits I'm happy to be a bit more flexible) and it's ridiculous how it can leap up and down at such a rate that it outweighs everything else on a month-to-month scale.  On the year-by-year scale it has been negligible, because the amounts are too low to make a real difference either way, but this month is one where it looks bad relative to last month purely because crypto has tanked.

Grogged

Interesting article on how much you need to retire in UK cities.
https://www.ii.co.uk/analysis-commentary/heres-how-much-money-you-need-retire-40-uk-cities-ii520599
I've taken the annuity column to be close to the size of pot you'll need.

South_coast

Interesting, but to me it's flawed as it assumes that you'll need 66% of your current salary - I certainly won't. Projected expenditure would be a more useful measure, particularly if you've been using a chunk of your current salary to go towards retirement or OP's. 

The cynic in me saw it as a ploy to spook people into upping their retirement savings - especially when they went on to quote someone who suggested we should all be topping up to the £40k annual allowance 🤣

jennystarpepper

The UK has adopted the same scheme that other countries have for pensions and workplace contributions and a standard rate of pension.

Australia has a state pension scheme which means tests your assets, so the more you have the less state pension you get.  Their .gov.au website states 

Income and assets tests

These tests measure your income (how much money you get) and the value of your assets (what you own, for example, any investment properties).

If your income or assets are above certain limits, your pension payment will be reduced, or you may not be eligible at all.

Your income includes money from:

• employment
• pensions
• annuities
• investments
• earnings outside Australia
• salary packaging

Cynical me thinks the UK might go this way.... I'm unsure if NZ are the same, will have to ask the Kiwi's when they are awake.  The state pension in AU is being increased to age 70!

QueenJess

South_coast said:

Interesting, but to me it's flawed as it assumes that you'll need 66% of your current salary - I certainly won't. Projected expenditure would be a more useful measure, particularly if you've been using a chunk of your current salary to go towards retirement or OP's. 

The cynic in me saw it as a ploy to spook people into upping their retirement savings - especially when they went on to quote someone who suggested we should all be topping up to the £40k annual allowance 🤣

It also assumes you would take an annuity which are really low at the moment.  Lots of people leave their investments in situ and just withdraw at a "sustainable" rate.

hugheskevi

QueenJess said:

It also assumes you would take an annuity which are really low at the moment.  Lots of people leave their investments in situ and just withdraw at a "sustainable" rate.

I was puzzled by the table at the bottom, and the headings:

"Cost of annuity if retiring at 67 and living until local life expectancy"
"Cost of annuity if retiring at 67 and living until 100"

Surely the cost of the annuity is the same, regardless of when you live to...mortality pooling is the whole point of an annuity.

The figures also don't seem to take any account of State Pension.