FIREside Chats

hugheskevi

Suffolk_lass said:

One other question @hugheskevi
I wondered if you intended keeping up with your national insurance contributions to ensure you have access to state benefits after you retire? - pension being the obvious one but the possibility that the government might limit benefits to pre-SPA non-contributors (not something they have mooted but I have thought it is another area where "Daily Mail fairness" exponents might take us)

I need another 9 years for a full State Pension record, whilst my wife needs 17. That is due to me making past voluntary class 3 National Insurance for all except one of my past years (thought it was qualifying due to working in Australia, but it doesn't meet requirement as I didn't work for long enough), and being contracted out. My wife didn't have any qualifying years for a long time early in her career due to working in academia and receiving a tax free grant/bursary type of thing for remuneration rather than salary.

One way or another I'll ensure we both have a full contribution record by State Pension age. We run our own small consultancy company which to date I have only taken money out of via dividends to benefit from tax free allowance along with Director loans but in the future that may change to salary. We may well have a year or two from future non-consultancy salary too.

There is always the class 3 option but I wouldn't use that until we were in the position of needing to make a year qualifying or face a non-full State Pension, and I'll also do it the maximum 6 years in arrears as it is a hugely risky investment given policy change can make contributions worthless overnight if qualifying year requirements change as they frequently have. That will mean I'd only pay voluntary class 3 once I reach age 57 and have access to DC pension.

In terms of non State Pension benefits, I don't really pay them any attention as I will always be miles over the capital threshold for income-related benefits and my wife and I are in perfect health so disability benefits are not relevant.That only really leaves only contributory Jobseeker's Allowance with potential, but that is probably too much phaff to bother with for the amount it is.

edinburgher

@hugheskevi - sounds dreamy - we all need a good few adventures under our belts before we pop our clogs

gallygirl

@hugheskevi amazing trip! By coincidence I'll be in Tierra del Fuego next week as I'm going to Antarctica on a cruise from Ushuaia.

Have you found it easy to get insurance for that long a trip?

hugheskevi

gallygirl said:

@hugheskevi amazing trip! By coincidence I'll be in Tierra del Fuego next week as I'm going to Antarctica on a cruise from Ushuaia.

Have you found it easy to get insurance for that long a trip?

Insurance for long trips is a bit of a pain, with about five main difficulties:

The first is that many insurance policy T+Cs have the policy end if you return to your home country, and even if you do not plan to return, things like funerals, etc, may well crop up for which you might want to come back for a week or two. Fortunately there is no way the insurance company can really know if you come back, so it isn't too much of a risk as they are unlikely to investigate that if you make a claim for something that happened overseas during the period of the policy.

The second is the lack of flexibility. This is in two forms - first you will end up paying for whatever the most expensive bit of the trip is for the entire trip (ie you pay for worldwide including USA even if you only spend a week in the USA). It is also a problem to extend insurance, or take out a new policy. Many providers insist insurance starts in home country, and will not sell policies if you are already overseas. Also many providers may either not permit extensions, or price them very highly.

Then the third main problem is duration. It is difficult to get insurance for more than 18 months.

The fourth problem is the number of exclusions in policies. In two years of travel, you will probably do something like hike up a high mountain, and many policies will exclude most things which could be remotely dangerous, eg, many would exclude climbing Kilimanjaro which isn't particularly difficult. This can then lead to paying for expensive insurance to cover you for the whole trip to do pretty much anything, to avoid the risk of not being covered for the small number of things you may do which wouldn't be covered.

The fifth problem is around coverage of areas FCDO advise against travel. This is perhaps more of an issue for travel in Africa than elsewhere. Ideally you want a policy that will cover you for things unrelated to the FCDO warning, so for example if you go into an area where the advice is not to travel due to risk of political unrest, you would not be covered if you got injured in a riot, but if you fell off the pavement and broke your ankle walking around you would be covered. Folk may wonder why you would end up in an area FCDO warn against, but on a long overland trip you go through some areas off the beaten track and things can change very quickly. I inadvertently went through an 'advise against all travel to area' in the Republic of Congo once, as some violence started in the border area just before we entered the country. The first we knew of it was deserted houses and burning cars as we drove into the area.

That pretty much means the choice is to either get decent insurance from an established provider used to dealing with the above - for that, I have used Campbell Irvine for many years and they were great when I had a claim after the carpet truck we were traveling from Kenya into Ethiopia on was hijacked (there was no public transport so you just pay a cargo truck driver some money to ride on top of their truck, it is a rather notorious area south of the border town of Moyale). Alternatively just go for cheapest policy and basically just aim to have medical cover only for most of the trip with nothing fancy.

I haven't decided yet what I will get, and will do detailed comparisons closer to the time, but I expect that I will probably just take out the cheapest possible, which is around £50 p/m to cover my wife and I.

For completeness, also worth mentioning that there can be issues around repatriation of body in event of death - some people (well, their survivors anyway...) have been caught out by taking out insurance for a trip that only repatriates back to the country where the policy was taken out. That can be an issue which particularly affects Australian and New Zealanders working in the UK who take out insurance here to go traveling.

ElmoR

You certainly think of every eventuality @hugheskevi

I did all my traveling while young, taking insane risks, now that I look back on it. It never occurred to me to think about repatriation of my body! The immortal belief of the young!

I did take a print out of the UK embassy details for every country though, and UK fivers for bribe cash. Inflation probably means you need a bit more now though? Or dollars?

hugheskevi

ElmoR said:

I did all my traveling while young, taking insane risks, now that I look back on it. It never occurred to me to think about repatriation of my body! The immortal belief of the young!

Young is when it is the most fun! Everything is new and you learn so much. Then the more you travel and experience, the more of a veteran you become and know how to deal with the unexpected

I did take a print out of the UK embassy details for every country though, and UK fivers for bribe cash. Inflation probably means you need a bit more now though? Or dollars?

I've only ever dealt with a UK embassy once, and I have to say they were great. That was when we were hijacked in Ethiopia - I managed to hide my passport and valuables so I was fine, but the girl I was traveling with had all her things taken. That meant she couldn't get into Ethiopia, and there is no Australian embassy there so they partner with the Canadian embassy. Unfortunately it was a Bank Holiday and the Canadian embassy was uncontactable. The British embassy were contactable, but I wasn't in trouble so they couldn't help - but nonetheless said they would try to have a word with Ethiopian officials, and within 10 minutes we were both allowed into Ethiopia.

I also visited the UK embassy in Addis Ababa which was quite an experience, with hundreds of Ethiopians there seeking UK visas in a huge office expanse. The Canadian embassy was completely different, the sort of big green leafy colonial building you would expect, with very few people around.

I've never paid a single bribe. Partly on principle, but also I've just never been in many situations where it is necessary. The few experiences of police harassment have always been defused when I have insisted on going back to the police station to deal with the matter - officers in most African countries don't want to be dragging white tourists back to the police station and their superiors, so that has always been the end of things. Although I've had quite a few friends who have had different experiences, and spent time in police cells.

UK pounds are far behind the major currencies for travel in more remote places now, as we have relegated ourselves to just being a minor currency. Dollar is king, and euro is always useful, and even preferable to the dollar in some places. I don't carry any pounds when travelling.

savingholmes

Thanks for sharing @hugheskevi very interesting. Sounds like you could write a book already...

powerspowers

I paid a bribe in bloody Hungary of all places! I’d made a mistake on the interrail tickets and it did say that we’d have to pay fines which would have added up as we’re a party of 8. I paid the “special child rate” the guard suggested which was much less. It was late and I really couldn’t be doing with us being dragged to the ticket office and further hassle. It’s a few years later and I’m still sore about it - I felt targeted as we were a group of younger women 🤨 

LadyGnome

I once had my passport locked in a drawer by a man in military uniform in Northern Laos until I paid some local fee. I thought about arguing the toss then realised I had precisely zero bargaining power.  It was only a few USD so it wasn't worth the fight.

Scrimps

I read through this thread a few weekends ago.  A little late to the party (a lot of people seem to have left) but would like to join in anyway as I have been looking for something like this for a while.  MY funds are far too paltry for the pension board crowd:

Why am I investing? I dont like working, neither does my husband.  We have tried to change this by changing jobs, changing sectors, retraining, changing our perspectives.... but we still dont seem to like it.  I recently took a secondment for a much higher paid senior manager post -  which I thought would be more fulfilling and would of course give us more financial security and options, but I didnt last long before it became unbearable, that level of seniority just leads to things being so much more complex and difficult. I have the aptitude but not the resiliance for that.

Some elements of work I do enjoy, I have noticed I get much more job satisfaction from the lower paid jobs I have tried previously, particularly the manual ones which also really helped straighten out my bad back from working over a desk for so many years. The ones where I put in a days really hard graft, get the job done and then go home and dont worry about it seemed to make me the most content at work,

The only (pretty big) issue was: we didnt have enough money so I was having to work more (every weekday and weekend) to pay unexpected bills (vets) and we had quite a lot of debt. I would instead like to work towards retirement, maybe to barista fire, but this time to have saved for the financial security to enable it.

We both also tend towards anxiety and low mood which really improves when we're not at work. 

How much do I think I'll need? - In todays money, I think £24k  household income a year would have us comfortable. According to my spreadsheet, without childcare costs, mortgage or putting money into savings, we need £1350 per month now.  That doesnt account for annual costs such a car repair and replacement bills, holidays, or unexpected expenses but does cover our insurances, physio costs, dental, day to day spending + some additional like NT, spotify and disney+ type things. 

How am I going to get there? - Im 40, my husband is 42. We would like to retire by 58 me/60 husband.
Our NHS pensions wont kick in until we're 68, along with our state pension which we will both have full contributions for. I think the NHS pension is accruing just over 500 per year, though I need to check this on the next statement as we have both dropped our hours to 30 hours per week.
Our mortgage should be paid off in 11 years, or 17 if we do decide to get the extension we keep changing our minds on.

We both used to work in banking and have SIPPs which we transferred out from there circa £55k me/ £70k husband.  We continue to both put in £200 each per month (topped up to £250).  Though actually I opened a LISA just before I turned 40 as its seems a good deal to get another cash free lump sum when I turn 60 so my money goes in there.

**LISAs are unpopular, I would like to hear if theyre a bad option in my situation. If I can get the potential 80Kish entirely tax free at 60, it seems like a good option, especially if  am still working part time at that point - also could I then also cycle it into my pension and get more top up if Im not fully retired?**

How long do I have? 18 years....ish? to FI

We have 3 and 4 year old boys and would like to set them up a bit, give them opportunities we didnt have hopefully without spoiling them.  We also live in a small home, the boys each have their own room but its just a very small 1930s kind of place and theyre only going to get bigger and smellier! We would like to extend/buy a bigger pad but that would add years to our working lives and make FI further away- these are currently unanswered questions. 

As for retirement, it depends on what type of retirement we go for.  I would prefer to fully retire but feel happy knowing that once the mortgage is paid and investments where they need to be we could both work NHS band 2 jobs for 3 days a week and live a comfortable life without having to begin drawdown on investments.   

If our investing does so well that we dont have to work, then great! but I would rather bring in a bit extra for a few more years rather than retire and not be able to afford to go out for a coffee or help our children out.

Husband just wants to stop work as soon as possible, doesnt really think about working beyond 58/60 - even very part time, though understands this may need to happen, he isnt planning on it and will look more closely when the time gets nearer.  I think it is quite likely that I will continue to work 3 days a week at something I enjoy and adds to my life - or just doesnt take too much.

We both work 30 hours over 4 days, we dont think its likely that we will increase that back to full time again, the only direction we are moving now is to work less and enjoy more free time.