13 years since the discussion started....

Mutton_Geoff

Some of the more interesting pension/retirement books I read dealt with the psychology of retiring including the big switch from a lifetime of accumulation to the decumulation phase. It doesn't feel natural but as a new retiree, I'm getting used to it.

Early_Retire_Free

eastcorkram said:

Early_Retire_Free said:

40k worth of holiday in a year, and you don't stay in expensive hotels? Are you going on holiday for the full 52 weeks? 

I might have over-estimated.  Looking at what we've booked so far (3 x 2 weeks and 2 x 1 week), its closer to £25k and a big chunk of the cost is long haul flights 

Early_Retire_Free

cfw1994 said:

Maybe look at improvements you could make to your daily lifestyle and ‘splash the cash’: new bathroom, landscaping, new car (EVs are pricey up front but brilliant for ongoing costs, plus they ‘feel’ like driving the future!).   A home battery & solar would use up a chunk but lower your costs if you don’t plan moving for 5-10+ years….. 

We moved into a brand new home last year so hopefully home improvements are off the agenda for a few years (although landscaping is a possibility).

Started with a small EV last year and have upgraded to a longer range one this year.  We're on Octopus Intelligent which really appeals to the saver in me.  We're hanging on to our diesel for the time being for use on trips when we can't out and back on a full charge.

I have looked at solar but our house does not get a lot of sunshine during the winter but also, since we're in an energy efficient home, our electricity cost (excluding the EV) is only about £1,000 per year so the payback would take a long time!

eastcorkram

Early_Retire_Free said:

eastcorkram said:

Early_Retire_Free said:

40k worth of holiday in a year, and you don't stay in expensive hotels? Are you going on holiday for the full 52 weeks? 

I might have over-estimated.  Looking at what we've booked so far (3 x 2 weeks and 2 x 1 week), its closer to £25k and a big chunk of the cost is long haul flights 

My comment was light-hearted. As a confirmed non holidayer , I'm probably 30 or 40 years out of touch with what holidays can cost. Which is just as well by the look of it 

DT2001

Thank you for starting this thread. I had a quick read of your early retirement wanabee and as a result reminded myself of The Number thread.
I actually did a much more detailed budget than my usual back of a fag packet effort and was surprised at how low it would be when all the children leave home. None contribute to any of the bills, for two reasons - they are all saving for deposits/Uni costs and we’ll incur IHT so it had muddied the picture.

My OH who is self employed almost stopped work with the Covid lockdowns. I did the sums then and realised we had enough as we can be quite flexible with our expenditure. However OH found a couple of contracts that she really likes, one of which is a 4 week solid commitment and the other she is offered anything from 1 - 14 days work at a time but is not under any obligation to take any/all of them. So she’ll continue as long as she enjoys it. From one of those other opportunities do come up as well. We just have to work around our youngest’s GCSE and A levels.

I cannot see us spending what income will/could be generated in retirement. Like you we look for value. We managed to circumnavigate the world in 2 months with 2 of our children inc time in the US (expensive accommodation and a post Truss exchange rate) for under £20k. So maybe we’ll continue to fund holidays for/with them. We tend to self cater but buy quality food. No new cars or much of a desire to get one. So we’ll do what we want when we want.

We have built up children’s investments and when/if we get an inheritance we’ll pass straight on. After a few years of actually being fully retired the aim will be to sit down and plan to pass on more sooner rather than later.

ukdw

Albermarle said:

C. How to protect what's left from the taxman?

Any gifts to charity ( however large ) are exempt from the usual gift rules, so will be excluded from any IHT calculations. Plus if you give 10% or more of your estate to charity in your will, then any IHT still due will be charged at 36% instead of 40%.

So for example if you left £2Million, with £1Million liable for IHT. So tax of £400 K leaving £1.6 M

If you gave away £200K, then tax of £288K ( £1.8M X 0.36) leaving £1.512K

So a gift of £200K will only cost you £88K.

Probably a better ticket to heaven than a lot of 5* hotel bills !

Like the idea - 

Also am I right in thinking that giving anything between £146.6k (£88k / 0.6) and <£200k would actually end up costing the estate more than £88k - if so I wonder if that ever happens? I guess a deed of variation could be used to fix it if my understanding is correct.

ps/ I think the £1.8m in your tax calc should say £0.8m 

cfw1994

Early_Retire_Free said:

cfw1994 said:

Maybe look at improvements you could make to your daily lifestyle and ‘splash the cash’: new bathroom, landscaping, new car (EVs are pricey up front but brilliant for ongoing costs, plus they ‘feel’ like driving the future!).   A home battery & solar would use up a chunk but lower your costs if you don’t plan moving for 5-10+ years….. 

We moved into a brand new home last year so hopefully home improvements are off the agenda for a few years (although landscaping is a possibility).

Started with a small EV last year and have upgraded to a longer range one this year.  We're on Octopus Intelligent which really appeals to the saver in me.  We're hanging on to our diesel for the time being for use on trips when we can't out and back on a full charge.

I have looked at solar but our house does not get a lot of sunshine during the winter but also, since we're in an energy efficient home, our electricity cost (excluding the EV) is only about £1,000 per year so the payback would take a long time!

Well done on the Octopus Intelligent integration: neither our EV (Kona) or our chargepoint (Zappi) integrate well with it.
Curious which EV you went with.  You could budget to splash out on a fancier one in a year or two (Fisker looks decent, the Ioniq 5 drove nicely, and many more are starting to come out).

Yes, sounds like solar+battery may not help a lot….although there will be deals out there that could get you payback within 10years….depends how long you plan to be there, I guess (& the great unknown of future cost of energy - we like that 95% of our electricity usage is now off-peak, & the battery lets us get more from our solar panels).


New house? 

Settlement cracks will need redecorating soon; add that to the landscaping 😉  

Build a garden kitchen shack for grand BBQ parties with family & friends😎
If you moved….find a worthy local group to spend time helping👍

Sounds like you are in a good place overall though.  Defo look at a train holiday with nice accommodation 👀

Albermarle

ukdw said:

Albermarle said:

C. How to protect what's left from the taxman?

Any gifts to charity ( however large ) are exempt from the usual gift rules, so will be excluded from any IHT calculations. Plus if you give 10% or more of your estate to charity in your will, then any IHT still due will be charged at 36% instead of 40%.

So for example if you left £2Million, with £1Million liable for IHT. So tax of £400 K leaving £1.6 M

If you gave away £200K, then tax of £288K ( £1.8M X 0.36) leaving £1.512K

So a gift of £200K will only cost you £88K.

Probably a better ticket to heaven than a lot of 5* hotel bills !

Like the idea - 

Also am I right in thinking that giving anything between £146.6k (£88k / 0.6) and <£200k would actually end up costing the estate more than £88k - if so I wonder if that ever happens? I guess a deed of variation could be used to fix it if my understanding is correct.

ps/ I think the £1.8m in your tax calc should say £0.8m 

Thanks - now amended in my original post .

Early_Retire_Free

cfw1994 said:

Curious which EV you went with.  You could budget to splash out on a fancier one in a year or two (Fisker looks decent, the Ioniq 5 drove nicely, and many more are starting to come out).

We went with a Cupra Born, largely because of the decent sized battery (77 kwh) and of course range (generally 300 + miles although reducing now in the colder weather).

There are others we considered (Polestar, Mustang to name a couple) but they were either not as efficient as the born by a long way but mostly we dismissed them because they won't fit in the garage!

The born is nice to drive and we use it a lot although the software can be a bit buggy and its annoying that everything is within the digital display.

I expect we will stick with it for a few years until the next generation of technology comes around.