FIRE Girls Pension Diary - Aim High & Dream Big

Firegirl

@michaels Nice to hear I’m not alone and also that you have adjusted to spending phase of life. I bet the adjustment was a challenge at times but time to enjoy!😊

jimi_man

I think part of the problem is that there is no exact recognised figure for how much is enough, as there are so many variables, especially when cost of living seems to be rising faster than we’d like it to. No-one wants to run out of money too early so there is a tendency to work longer than we need to. I know that’s right in my case. I eventually retired last year at 59 but I could have retired quite comfortably three years earlier and I’ve overdone it, though it’s not a bad problem to have.

Also in my (our) case, we have four excellent Public Sector pensions giving us £xxxx a month but we didn’t have a huge amount of a savings pot/DC pot. So we spent the last 8 years building that up to an acceptable amount.

MallyGirl

https://forums.moneysavingexpert.com/discussion/comment/82171928#Comment_82171928

I could have written exactly this! i certainly stayed in jobs for significant periods of time when others jumped about for gains. At least the 21 years service in the final one worked well when my hopes for redundancy were fulfilled

Firegirl

You’re exactly right @jimi_man. I went for a Starbucks today and sat in the car so I could chat to my Mum. £5.40 for a mocha!!!!! That’s insane. Imagine when it’s a tenner for a coffee. I have my coffee machine ready so I can bring coffees with me from now on😳

@MallyGirl everyone has different circumstances and bravery. I was part time in a badly paid high stress job for 13 years before I was made redundant!

hugheskevi

Looking back on early post on this thread @sgx2000 said will a million be enough, will you still be thrifty. I was so sure at that point that oh yes if I ever reach my targets it will be insane and at this point I thought the targets were beyond what I really could achieve. But now as I go through this journey I realise they were right. It’s inbuilt personality to keep going. Will I always strive for more? Another flat? Another we bit extra to cushion in the fear of next market bust? Is it a drive to keep building wealth driven by fear? Why do I think I need to get pensions/investments to an amount where I can draw down without going into the main pot? Fear of the unknown.

I liked the approach of either doing everything or budgeting for capital expenditure on whatever non-routine things I could foreseeably want in the coming years before retiring. That would keep expenditure low and derisk the early years of retirement.

Then I considered lifestyle, and all the routine spend I might want on things like house maintenance, pet, club memberships including leisure centre, and everything else. That would ensure day-to-day life was complete and funded.

After that were shocks and luxuries. Things that probably won't happen or be wanted, but which you can build a capital buffer against.

Then it was a case of determining the earliest realistic retirement date and understanding the minimum requirements for it, and the latest realistic retirement date and the requirements that would go with that. Beyond the latest retirement date would be completely inefficient, just building capital without purpose and which would either go unspent or be spent on things that gave minimal quality-of-life improvements.

Between earliest and latest retirement lay a grey area, which set out the period in which I would retire. I liked the flexibility this gave, so if I hated work, or an opportunity arose within that period, I could respond to it. I had also predefined my latest retirement date and what determined that, so there was a credible backstop date if I were to find myself still working then. I think setting these out in advance makes decision-making much easier and enables being more decisive when key moments occur.

The key for me was determining the point at which working longer would become clearly suboptimal. Thinking in those terms turns the loss aversion around.

Firegirl

@hugheskevi I love this idea of working out an earliest and latest retirement date and working out the grey area. I’m going to have a look at that.

The other way I’ve worked it out is that I have enough in my pension now but can’t access until 57, and I need to properly work out what I need in my ISA to bridge the gap.

I have £85k in my ISA and I have worked out I would like to take £1500 a month from my ISA when I finish work. I won’t leave work before April 2027 so I have 9 years to bridge until I can access my pension. I’ve played around with the figures on AI and think if I somehow magically get my ISA to 200K that’s 100% me finishing work with the option of not working and feeling confident about leaving. Downside is I’d have to stay in my high stress job 3 more years. While working I can save £1500 to ISA and £1200 will go to pension each month. As I type this I think I need to do a spreadsheet for this so I can really work it out. I’m currently trying to live in the moment but as you can see from my activity on this thread that’s not really working for me right now.😆

I’m also wondering if now is the time to derisk my ISA as it’s all Global Equities at the moment. I feel like I’ve a lot of things buzzing about in my head at the moment but I’m not coming to clear conclusions because I’m busting to leave work so badly at the moment. I feel a spreadsheet coming on! 😆

Non routine things. I’ll have to get back to my Vinted selling for that. Honestly our house is full of random stuff that could make a bit of money. Also we have some savings in our flex mortgage that could be used to cover if stuck. Hubby still working too so we won’t be stuck.

mrklaw

I did similar. Target age 60. thought I’d do a ‘5 year workback plan’ listing what happens if my hand is forced in the run up.

it was hugely helpful and reassuring and put in place some nice milestones where I’d be increasingly safe. Also flagged some things I hadn’t spotted as it made me do a more detailed cashflow plan. Three main things came from it

1. I could safely (without undue compromise) move our planned 60 to 58. Big win.
2. I took out redundancy insurance to help cover basic costs in case of redundancy late in the day and inability to replace income. This combined with likely redundancy payout means 56 is doable to ‘coast’ to 58 before I’d draw
3. I have a little ‘red/amber/green’ for each of the next few years to my new target - its now a 3 year countdown instead of 5. this year is already amber which is good - I can’t draw my pension and would need to replace income, but a minimum wage would be enough and any extra income would go into pension as extra; next year is amber as would need to coast for a couple of years on redundancy+insurance. the final year is green although I would prefer to work to pile into a spare fun money fund

michaels

https://forums.moneysavingexpert.com/discussion/comment/82172933#Comment_82172933

If you have more than you need after 57 then potentially you could use your house as a credit line to bridge the gap if you wanted to go earlier, replenishing the house loan from the post 57 excess.