FIREside Chats

hugheskevi

D123456789 said:

Good luck with your move up north @hugheskevi I thought the first house you posted a link to was fabulous, but I see your changing area now…

I am wondering what to do , where to put my pay rise money - it’s not a lot so I’ve convinced myself I won’t miss it! 

1.  additional nhs pension 2. SIPP 3. Overpay mortgage 

I probably can’t go majorly wrong with any of those options - any recommendations?

Thanks. I saw a very nice house today with a lot of potential, so it could be an important week coming up.

What is best depends heavily on personal circumstances, but simplifying massively, the SIPP is likely to give you the best value, followed by Added Pension and finally overpaying mortgage. But the reverse order is true in terms of risk/certainty, so it is largely a value/risk tradeoff.

More generally, having a mixture of Defined Benefit and Defined Contribution pension at retirement is ideal - the DC pension provides flexibility, whilst the DB pension gives certainty. They complement each other perfectly, with the strengths of each type covering the weaknesses of the other type.

greenbee

It was a very long time ago, but I went to Tikal via Belize (as part of a longer trip). We went from Cancun, to Belize, then across the border into Guatemala. Loved it - no comparison with Chichen Itza, as there were far fewer people!

D123456789

Thank you Hugh. I think I will go with the Sipp. 

I currently have life strategy 100% equity fund, I don’t remember how I chose it, it seems to be going ok. I selected income but I think I didn’t mean to, but no idea how to change that. 

Not sure whether to do more of the same or choose something else. 

gallygirl

hugheskevi said:

gallygirl said:

hugheskevi said:

Our highlights of the trip were:

• Denali National Park, USA
• Yellowstone National Park, USA
• Copper Canyon in northern Mexico
• Chichen Itza and cenotes in Yucatan, Mexico
• Snorkeling at Caye Caulker, Belize
• Actun Tunichil Muknal cave in Belize
• Tikal, Guatemala

So I decide to log on for the first time in a year or so to see how FIRE people are doing...... and fall down a Central/South America holiday hole . Out of Chichen Itza and Tikal which would you recommend Hugh? Without having done too much research I'm drawn towards Tikal simply as it's less well known. We wouldn't be doing a road trip to either.

Great to hear all your plans are going well and good luck with the upcoming move.

Central/South American holidays don't fit so well with FIRE, but I wholeheartedly recommend it anyway!

Out of Chichen Itza and TIkal, I would go for Tikal, and it wouldn't be close. However, Chichen Itza is considerably easier to visit of the two from the UK.

The problem is getting there and away. Cancun is the closest major international airport that you could easily fly to and from the UK at a reasonable cost. But that isn't close to Tikal - to visit Tikal you would probably stay in Flores in northern Guatmala. I think you would probably need to fly into Guatemala City and then on to Flores.

There might be the possibility of flying via Cancun, which could enable a few days on the Yucatan peninsula to visit Chichen Itza and the cenotes, before heading on to Guatemala. Depending on how long you would have, if flying via Guatemala City you could spend a few days at Lake Atitlan, and Antigua (to climb Atatenango if at all possible).

An ideal short itinerary with flying would be something like:

• Fly to Cancun, spend 3 nights and see Chichen Itza and cenotes, as well as maybe Tulum
• Fly on to Guatemala City, stay 2 nights in Antigua then 1 night on Acatenango and carry on to Lake Atitlan for 3 nights.
• Fly up to Flores for 3 or 4 nights to see Tikal, before flying home (probably via Cancun)

If you had longer, lots more interesting possibilities would present themselves, but the above would be a very nice couple of weeks away.

Tikal it will be then . TBH apart from Chichen Itza I've never really fancied Mexico - though seeing whales breaching and calves is quickly moving up my 'must do' list We live in Spain so lots of options to fly to South America and I can fly easily to Guatemala City from Madrid. Some very reasonable business class fares which need investigating - I feel a spreadsheet coming on! I'd also like to visit Costa Rica and Panama but a very good friend has just had to cancel a big trip to those due to cancer so not appropriate right now.

Thanks for all the well wishes - nine and a half years of early retirement now! Life is good, every day we count our blessings and have never regretted our move to Spain - or the hard work which went into it. We have a lovely home, an active life with a great circle of friends, have a big month long holiday every year plus other short trips and I've started gallivanting on my own or with friends - all seven continents visited now . Anyone wavering over whether to take the plunge - JFDI!!!!!

D123456789

Hello all, please may I ask what would you do re Vanguard SIPP as I am aware the fees are going up to 4 pounds a month. 

I only started putting in 100 a month, 12 months ago, and just increased to 200 a month last month. So I have very little invested.

performance is up by 18 %, but as so little is invested, the fees are quite a big proportion of the increase.

Also I believed I could access the pension at 55 but now I am unsure if this is the case?

So do I just leave as is and continue investing slowly, or move to a different fund with lower fees, or leave as is and going forwards invest somewhere else?

Any suggestions? Many thanks

Grogged

I’ve just moved my wife’s Vanguard SIPP to InvestEngine, which has no fees.
If you’re invested in ETFs, then you can do an in-specie transfer. This will transfer your ETFs to InvestEngine (or any other provider you choose) as-is. You will preserve your gains (or losses) and won’t have time out of the market.
If you have funds, then these will be sold for cash if your new platform doesn’t offer them - InvestEngine doesn’t.
One thing to watch out for is that you will have some tax credits owing to you, so stop paying any more into Vanguard.  It may take a couple of months for these to be credited, so you may be stuck there until the last one has been credited.
one last thing, if you have a friend with your new provider, you may be able to get a welcome bonus through a referral link. If not then search for Damien Talks Money on YouTube (or use your favourite YT finance channel) and use their link.
Good luck with whoever you choose.

Suffolk_lass

D123456789 said:

Hello all, please may I ask what would you do re Vanguard SIPP as I am aware the fees are going up to 4 pounds a month. 

I only started putting in 100 a month, 12 months ago, and just increased to 200 a month last month. So I have very little invested.

performance is up by 18 %, but as so little is invested, the fees are quite a big proportion of the increase.

Also I believed I could access the pension at 55 but now I am unsure if this is the case?

So do I just leave as is and continue investing slowly, or move to a different fund with lower fees, or leave as is and going forwards invest somewhere else?

Any suggestions? Many thanks

You can move it to a different supplier of the platform. My reading was that it is the platform fees that are increasing, not the managed fund fees (in fact one snippet I read suggested that the managed ISA fund fees were dropping from 0.3% to 0.2%. At the time we invested some lumps, Charles Stanley Direct were very competitive, and if your SIPP is all in one (Vanguard) fund the fees are still quite low.

hugheskevi

Since my last update on this thread over the last couple of months, our FIRE journey has taken a few big steps forward.

We are close to purchasing a new property in the North West, in Cheshire. I expect to exchange in January, and complete in January or February. We ended up purchasing a house that is a bit south of Manchester, and quite close to the Peak District. Our work has offices in Manchester, which is convenient as it should be under 1 hour from home to office, although we won't spend long working from there before leaving. My wife might have to go there 2 or 3 times a week, I will work from home.

The house we bought ticked all of our boxes, except that it is preposterously large for our needs at just under 300 square metres (about 3 times the size of a typical 3-bed semi-detached house), with at least 2 bedrooms more than would have been ideal and is a bit more expensive than I'd been planning. However, we thought the chances of finding somewhere that ticked all our boxes were remote, and being a bit bigger and more expensive than planned was a small price to pay for somewhere we expect to spend the next 25-30 years.

We are separately selling our house in London, which is now on the market. There has been a reassuring amount of interest, with 7 first viewings, a second viewing from which an offer is expected, and 1 offer made after 17 days on the market. I have said we will accept the existing offer on 6th January if no better offer is made before then, so hopefully, the house will be sold early in the new year.

All of the above has taken a financial toll, and due to spending about £125,000 more than planned on our new house, I had to make some financial rearrangements. This is exacerbated by entering the part of the financial year when we put silly percentages of our income into pensions to avoid higher rate tax, so my net income for November and December is under £500 in each month...oh well, it is all for the best in the long run!

I'm buying the new house with an offset mortgage, that will be fully offset as soon as I sell our London house. Once all the costs of moving, furnishing our new house and buying a new car are all sorted, I think we will have net assets (non-pension, non-property) of about £250,000 left.

Fortunately, all of our post-55 life is already sorted in pension terms, so it is just the period from now, aged 47, until age 55 to sort out. That is where the £250,000 will go, along with drawing on the offset saving account to be repaid at age 55 from pension lump sum (we are deliberately saving more into a pension than we need due to the tax incentive). In addition to that, all future income and pension contributions will go toward the 47-55 fund.

In a potentially game-changing piece of luck, our workplace has just announced a round of paid exits, the first for 15 years. It could not come at a better time! My wife is extremely likely to be paid to leave, I have a less good chance but still not bad.
 
So our plans for 2025 are:

• Move from London to Cheshire in March, when we expect to complete on our London house
• My wife to work out of the Manchester office 2-3 days per week after we move
• Me to work from home all week, although I will probably travel for work quite a bit as I don't especially want to spend so much time at home
• Hopefully at least one of us to take a paid exit from work in mid-2025
• If no exit, then consider position around Christmas 2025

We should have something north of £60,000 p/a after-tax whenever we decide to leave work, with more from age 68, which should be plenty for our lifestyle. The further work and possible paid exits would push that closer to £70,000 p/a. My aim is to have comfortably more than we should need/want, so we may well not end up drawing down on the offset savings account. Once pensions become payable I expect to start saving in an ISA again as I will use all my basic rate income tax band and along with wife's pension receipt that will be far more than we need, so the ISAs can be replenished.

So the next 6 months should see some very big changes, and not long after that we might reach the end of the  FIRE road if we both get paid exits

powerspowers

powerspowers said:

2024 update 13/03/24

contributions £7634
plan value £8367
20 years to go! 

Carrying on at this rate gives me an estimated pot in todays prices between 98k and £200k at age 58. This is on top of my LGPS pension and the hope is to plug the gap between retiring at 58 and state pension topping up from 68.

I’ve done some modelling and we’re more on track now than we were, although that assumes we both keeping earning and paying in at the same rates. There’s so much that can change so I’m just going to keep paying in and assess as we go. 

2025 update 10/01/25

contributions £10,634
plan value £11,692
19 years to go! 

Slowly slowly and all that…