Best way of tracking savings, pension planning

Mutton_Geoff

LHW99 said:

Spreadsheet - well actually 3   - one for annual expenditure, one for savings / investments and one for annual total income. Began recording on paper well before Excel was a thing!

VisiCalc or Lotus 123?

LHW99

Mutton_Geoff said:

LHW99 said:

Spreadsheet - well actually 3   - one for annual expenditure, one for savings / investments and one for annual total income. Began recording on paper well before Excel was a thing!

VisiCalc or Lotus 123?

Neither. Began on paper and now on Excel, although I did try Lotus briefly (couldn't get on with it) and also had a go on our first (BBC 64k memory) computer, but that trial didn't last long either, although we did have an MS DOS emulator which worked fine for word processing.

5" floppys - those were the days - great improvement over a cassette tape!

DealingWithEstate

Thanks all for the useful ideas. Seems Excel is the way to go - and indeed I have that already. So far I have a simple sheet with list of accounts / pension pots down the side, each year is a column and I update each year. (Not sure how people manage to do this monthly!) and then a couple of nice charts that shows the savings growth. 

What I don't know is how to go from that to planning into the future. I thought I was excel "literate" - but when I hear about people doing "pension projections" or "model expenditure and income from age 55 to 90 " I realise I'm just a beginner. I want to work out, for example, if I massively increase my AVCs into my pension, how early might I be able to retire?

Neither I nor my partner particularly want to start tracking our spending, simply because we can't be bothered. We've managed to save ok without it, paid off our mortgage etc... but I realise that if I want to know whether I can retire early, I also need to know how much I spend!

Anyway, do keep any suggestions coming!

Scarum

As others have mentioned, Excel works very well.

One sheet for each pension and saving plan.   Sheets for budget (present and future) is very important.  I actually think tracking spending and budget is essential, unless you have so much money in which case you are likely to get someone to do it for you.  I then have a summary sheet for income for each year which I balance to the budget sheet.  I will be honest, it has become rather complicated and a challenge but if you have time it works very well.  You can also learn a lot about Excel and engaging the brain is a good thing.

The use of named variables makes life easier.  i.e. set inflation at 3% then change it to 4% and see what it does to your plan.  I even have a named variable on life expectancy!

The important unknown variable is future growth, I use an average of 2 years of 3 year annualised growth data, which I reduce by a 20% contingency.  I would be interest to learn what others may use.

I have recently learnt to program VBA macros so I can click a button and the plan balances the budget to the variables or to any changes to pension values and future contributions I may make.

What I have learnt most from my spreadsheet is that keeping a calculated portion of cash in a pension to drawdown on is a good idea (should you build in an investment crash scenario in to your spreadsheet).  Most important of all, drawing down less at the start of any retirement plan pays back a lot later on.  The numbers do not lie.

nicknameless

I have a spreadsheet but also have been using this recently - sign up for free and create your own plan

https://www.timeline.co/

kinger101

LHW99 said:

Mutton_Geoff said:

LHW99 said:

Spreadsheet - well actually 3   - one for annual expenditure, one for savings / investments and one for annual total income. Began recording on paper well before Excel was a thing!

VisiCalc or Lotus 123?

Neither. Began on paper and now on Excel, although I did try Lotus briefly (couldn't get on with it) and also had a go on our first (BBC 64k memory) computer, but that trial didn't last long either, although we did have an MS DOS emulator which worked fine for word processing.

5" floppys - those were the days - great improvement over a cassette tape!

Not bragging or anything, but my floppies were always 5.25"

Mutton_Geoff

DealingWithEstate said:

Thanks all for the useful ideas. Seems Excel is the way to go - and indeed I have that already. So far I have a simple sheet with list of accounts / pension pots down the side, each year is a column and I update each year. (Not sure how people manage to do this monthly!) and then a couple of nice charts that shows the savings growth. 

What I don't know is how to go from that to planning into the future. I thought I was excel "literate" - but when I hear about people doing "pension projections" or "model expenditure and income from age 55 to 90 " I realise I'm just a beginner. I want to work out, for example, if I massively increase my AVCs into my pension, how early might I be able to retire?

Neither I nor my partner particularly want to start tracking our spending, simply because we can't be bothered. We've managed to save ok without it, paid off our mortgage etc... but I realise that if I want to know whether I can retire early, I also need to know how much I spend!

Anyway, do keep any suggestions coming!

Think of your pensions, savings etc as a big bucket. Your outgoings a hole in the bottom.

You need to know the size of the hole so you can calculate how long the bucket will take to empty when you stop topping it up (ie retire).

tiring33

Like many previous posters I've built my own spreadsheet which has been invaluable in understanding my net worth, investment performance etc. I used excel for a while, but have now transferred to a Google Sheet, stored on my GDrive, so I can access and edit from multiple devices (PC, Tablet, Phone). I also use an import formula to auto update fund prices to keep track of investment performance without having to constantly update cells.

For day to day spend I use a small software program called Acemoney which I have found excellent, and helps me keep track of where my money is going.

Sarahspangles

OH retired last year at 60, and I now have a target date on the horizon.

We use YNAB to track our budget, this is an ‘envelope’ or ‘jam jar’ system at heart and has a horizon of about a year. At the beginning of each month we budget using our previous month’s income, but I’m now budgeting with my projected retirement income, to test how liveable this will be. The rest of my current salary goes into an envelope for savings or SIPP contributions.

We use spreadsheets for longer term savings and investments including pensions. Money paid into these ‘leaves’ the YNAB budget.

We both have a worksheet with our savings and investments listed as rows, split between taxable and tax-free.  There is a column with values at the 1st of each month.  There are columns for:

• Provider - we need to check we don’t exceed FSCS limits
• Interest rate
• Maturity date

It’s useful to be able to sort by these three when making decisions about moving money around.  A column at the end tots up forecast/actual interest - I almost stumbled into paying higher rate tax last year due to savings income, so I now keep an eye on this. 

My new pension worksheet has a table updated annually when my defined benefit pensions plus state pension are revalued. This feeds a tax year/month grid table with the amount of pension I will receive.  A column at the end calculates the annual ‘gap’ between required income and pension income up to state pension age.  The total of these gap figures is what I need to bridge using savings/SIPP. 

A separate table - updated monthly - calculates the value of my savings plus my SIPP, the latter split between 25% tax free and 75% taxable, where my calculations assume I will lose 20%.

It sounds a lot, but actually it takes about half an hour a week to keep YNAB up to date, plus a couple of hours each month for the budget and to update the spreadsheets. As a result we know we’re living within our means, and it motivates me to see the gap narrowing between the required and actual savings/SIPP that will allow me to retire.

Robert_McGeddon

DealingWithEstate said:

What I don't know is how to go from that to planning into the future. I thought I was excel "literate" - but when I hear about people doing "pension projections" or "model expenditure and income from age 55 to 90 " I realise I'm just a beginner. I want to work out, for example, if I massively increase my AVCs into my pension, how early might I be able to retire?

For me, it's spreadsheet all the way.

I consider myself spreadsheet literate and my retirement projections will be way more detailed/complex than average.

But complexity/detail is not really the point.  If you do your own projections then you'll own the outcome.  You'll learn. You'll see shortcomings and change the formulae/dependancies.  You'll rewrite the spreadsheets. More than once and the spreadsheet will still not be perfect and you'll know that. It doesn't matter because you're learning all the time and each iteration will be more personalised than the last.  Any shortcoming you spot (and I'm still questioning some of the stuff I do) will require you to do some research and amend your thoughts/working.  All positive!

IMO your focus needs to be on understanding what you are seeking in retirement, not flash spreadsheeting tehniques. Cart and horse! The spreadsheet is the tool, not the master!

HTH.