FIREside Chats

QueenJess

I’m considering taking a career break or going part time in the next year or so. As a result, I’m trying to stuff as much as possible into my pension (plus the fact that my work scheme is generous).

I am continually fighting myself as to how to split my money between pension and ISA (early pension fund). These are the priority and I attempt to scrabble together my mortgage overpayments with the remainder (it is helpful as my mortgage amount rather than term reduces and makes it easier to go part time or take a career break).

I am considering increasing the amount going into my pension for the next year to get closer to my minimum retirement figure. I’m about 65% of the way there for my post 57 year amount (based on assumptions of growth between now and then) and 51% of the way to my early retirement figure (if I was to retire at 50).

I never seem to have quite enough to target everything and so it is a continuous tweak. I’d like to get as much as possible over the next year so I have as many options as possible.

With much of FIRE, it’s a case of just chugging along really.

Cornish_mum

Hello all,
We are carrying on with our FIRE plans (to bring forward our retirement date to ~60). MrCM and I are making 21% AVC on top of our USS DB contributions and I am also putting £250/ month into S&S ISA (vanguard). Our DB pension benefits are going to be cut again ( not optimistic that strike will make any difference). We both plan on going for promotions in the next few years so hopefully that will be a way to keep our FIRE dreams alive.
Our house needs quite a bit of maintenance so we have been focusing on that and also making sure that the kids make up for the experiences that they missed out on during the pandemic; so spending is up for us. 

hugheskevi

Our FIRE plans have taken a few sharp and rather unusual turns, such that I am now a mortgage-wannabe

Having discovered that although my wife and I can take our Defined Benefit pensions at age 50, there is a rather penal aspect to the way pensionable earnings are revalued that applies before age 55. This makes it unattractive for me to take pension before 55, and although the penalty is less significant for my wife it still isn't very attractive.

Also, HM Treasury changed the rules around minimum pension age protection for Defined Contribution pensions, so I expect that to move from 55 to 57 for both of us too.

All that means we have plenty of pension, but all available later in life than desired.

The obvious way to fix that problem will be a mortgage that gets repaid primarily from pension in future years. Amusingly, that takes my plan all the way back to my first ever long term financial plan way back in 2009 that involved a pension mortgage. So now my plan is:

• Go traveling for 2 years in mid-2022 aged 44
  
• Rent house out whilst traveling
• Return in 2024, returning to work and returning to and preparing house to sell
• Sell house, purchase our retirement property with mortgage
• Leave work at some point, then use savings, ISAs and funds from selling house to fund period between age 46 and somewhere between age 55-60, by which time all pensions will be available to fully repay mortgage.
  

Retireinten

Still pootling along with our FIRE plans. At 46, I have 7 years to go, my target date where I can choose to never work again is December 2028. That takes me to a few months shy of 54 but it also gives me some flexibility. I have to earn at the level I do now to hit that date, so it wouldn't be the end of the world if say, I was offered redundancy and looked for something on less money with less responsibility...even if that date stretched out a bit!  And this gives me some comfort to be honest. 

Hubby is a bit younger (1 year) and a bigger spender so has agreed to work a little longer. He's not entirely sold on the early retirement dream either and often ponders what he'd do with himself when he's not working. 

We don't intend to just stop working on our agreed dates either, it's more a target date to get to a point where work becomes entirely a choice - that really appeals to me! 


Our main issue now is keeping on track whilst living a little. Hobby wise, I'm a simple soul whereas hubby has just bought a weekend car and all the outlay and running costs that go with that (mostly budgeted for).

We've had a heart to heart recently because his spending choices could delay 'our' retirement plans, which to him isn't a problem because he doesn't see it as his main goal.  For me however, this could cause resentment because I don't want to see my December 2028 date stretch out to help fund my husbands expensive hobbies. So we've agreed that my December 2028 is fixed (unless there is a job change etc) and if say a big, unbudgeted repair bill comes our way or he decides to spend £3k on a golf membership, then we pay for it and then add a month or two onto my husbands retirement target date to cover the cost . I think he has been quite fortunate over the last 26 years, with a higher earning wife who has also taken on the main responsibilities for childcare and home - so I don't think its unreasonable for him to feel the repercussions of his spending decisions. 

Not sure how anyone else deals with things like this on their early retirement journey to be honest. Our current retirement target income doesn't cover an excessively expensive lifestyle, but certainly a comfortable one.  So I think taking a staggered approach to our retirement dates may be the best way forward, to accommodate any individual spends not currently in our budget. 

ElmoR

Thanks for keep us all on track @gallygirl

I'm leading a parallel life to @Cornish_mum with a 21% AVC overpay too, and mangled work pension situation. Similar amount going into ISA and SIPP, though currently a bit less because we've had a lot of vets bills and Christmas on the horizon. Our area voted not to strike (not enough people voted) but we've been through our own local grinder so that's not surprising. People are so low that any enthusiasm for a fight is gone.

Same strategy going forwards to you as well C_m, was recently promoted to a new role (4 year term) and funneling the salary uplift into the pension for now by salary sacrifice, having slip-streamed the route taken by @bluenose1

The original FIRE spreadsheet is toast. Not had the enthusiasm to compile a new one yet. Maybe once we know for sure what the pension scheme damage entails. At the minute, the temporary salary uplift part fills the shortfall in the pension lump sum payment, but the DB part involves an 8.5% drop if they go ahead. If £40K fell on my lap, that might make the spreadsheet tally up for an age 60 jump off. Where to find that extra cash?...

rara32

Really interesting to read everyone's updates. My situation is not dissimilar to a few of the themes in others posts. 

My plans haven't changed too much in that we are still heavily reliant on DB pensions at the moment. We have passed a bit of a milestone recently and have passed the £25k mark in today's money in our current joint totals. So what this means is that I know at 68 with SPs we would have a comfortable joint retirement as well as individually being ok too if needed.

The focus for the last 18 months has been SIPPs and the S&S ISA. So I am contributing to these for both of us to bridge the gap between retiring and drawing the DBs which I am thinking we may draw early at 65 all going well, and depending on any future changes to retirement NRA for LGPS. 

It still feels like a long way to go to get enough in SIPPs and the ISA but I know it's a long game. DH is still on his career break at the moment and so hopefully will be working at some point next year, in some guise or another, to help with building these up and hopefully that takes some pressure off me too as I work in the same sector as CM and Elmor and it just feels like constant changes and reviews so I never feel like my role is that secure.

I joined the 1% mortgage challenge this year which I hit target on  last month and am reducing the payments rather than term. I plan to try and continue with that so there is a spread of where the money goes.

So I think I would say I am on track but a long way to go.

powerspowers

I got a promotion today!! I’d been planning to put up my AVCs and this gave me a kick to do it. It’ll also increase my DB pension and I’ll have 3 years of pay incremental so win win in the fire department 

rara32

Congratulations on the promotion that's great news. Sounds like it will make a significant difference to your FIRE plans with those extra pension contributions. I hope you have celebrated your well deserved success in style  

Retireinten

Well done on the promotion powerspowers, great news

savingholmes

Congrats on the promotion and on being able to increase your pension investment. Smart move.