FIRE Girls Pension Diary - Aim High & Dream Big

MallyGirl

jimi_man said:

Firegirl said:

NoMore said:

Pensions Planning: The NUMBER — MoneySavingExpert Forum

Wow bit of a lively debate in the first few pages, so I’ve jumped to the last pages!

Yes the first few pages were spoiled by someone but it settled down and got more sensible. 

Gosh - it really did! I was still in MFW mode back when the thread started so I hadn't seen those early posts.

Smudgeismydog

Similar to yourself firegirl, my partner and I recently opened a joint account for the household bills, and this has really helped in terms of budgeting and our retirement planning. 

We both pay £1,000 pm into the account, which covers all household costs, including food, our coffee shop trips and meals out. We will allow some surplus to build for maintenance, or replacement appliance costs.

Other than this account, our finances are separate. So I know I need to fund the £1,000pm and then my personal spends, which are things like my mobile (SIM only), gym, hairdresser, car costs, hobbies etc from my dependents pension and accumulated assets once my salary stops. 

After a lifetime of saving, I appreciate it will be a huge mindshift to change to spending. So I’ve decided to put £500pm into my account for personal spends for the first six months after retiring, and see how that works.

I will continue to hold accessible cash for any unexpected bills.

Firegirl

Yes I was thinking about our bills account which is very established….i should probably simplify my calculations for ‘the number’ as half the household bills (minus mortgage) plus my estimated personal spend (increased for more lunches/coffees/holidays).  Doesn’t really matter how my OH and I pay things at the moment.

Must be so hard to shift mindset!!!  It sounds like we run things in a very similar way!

SouthCoastBoy

Smudgeismydog said:

Similar to yourself firegirl, my partner and I recently opened a joint account for the household bills, and this has really helped in terms of budgeting and our retirement planning. 

We both pay £1,000 pm into the account, which covers all household costs, including food, our coffee shop trips and meals out. We will allow some surplus to build for maintenance, or replacement appliance costs.

Other than this account, our finances are separate. So I know I need to fund the £1,000pm and then my personal spends, which are things like my mobile (SIM only), gym, hairdresser, car costs, hobbies etc from my dependents pension and accumulated assets once my salary stops. 

After a lifetime of saving, I appreciate it will be a huge mindshift to change to spending. So I’ve decided to put £500pm into my account for personal spends for the first six months after retiring, and see how that works.

I will continue to hold accessible cash for any unexpected bills.

Similar to yourself my wife and I opened a joint account 2 years ago. I put in £2000 pm, wife £650 pm. (wish I had a 50:50 split ). It has worked well and gives me confidence in my number. This year is expensive as we have 3 holidays booked, totalling around 10k, so will be interesting if all of that can come out of the joint account without additional funding.

cloud_dog

Firegirl said:

You are right!  If I put a lower percentage though I won’t get to my target.  

Under promise and over deliver!

I've never known anyone to complain that they have reached their goal too early or that they have too much money.

Over the years in my spreadsheet I used a future return rate of 3% on investments (plus some cash products) and I just updated the actuals each year.  I used to 'stress test' things in half degree steps (0.5% ranging to 5%), just to see the impact.  I started to update things monthly as I have got closer to the target number, and am now doing far too frequently TBH.

cloud_dog

Firegirl said:

enthusiasticsaver said:

Do you not have a spending app tracker on your bank mobile app?  Do you budget monthly or just wing it? I know when you earn a lot it is tempting not to bother but you may find it interesting.  There has been all sorts of research into the different levels of retirement but there are different levels within that. 

A few things you need to ask yourself.  

Do you have expensive hobbies like golf and do you want a gym/country club membership etc
Will you be running a car (or two) and will you need to build in costs for replacing this every 5-10 years or sooner
How often will you be eating out and at what type of restaurant/pub
How big a house will you be running and maintaining. Build in costs of home improvement projects, white good replacement etc. 
Travel is a big one and can range from a  few weekends away to several long haul holidays a year. 

We have a joint account for bills so that’s all organised monthly.  Monthly I set up standing orders for Pension and ISA. Then I spend what I want but I don’t spend all so it builds up over time.  Then the extra I either put to my mortgage or ISA.

until recently I had a few different bank accounts….just recently I’ve moved all the direct debits and standing orders to 1 account so I can do exactly this next Jan. All my personal expenses will be in one place.  This is my lazy way to do it

No expensive hobbies. I like walks and chats and coffees/lunches.  Will need to run 2 cars.  I think eating and coffees out and holidays will be my biggest expense in retirement.

I do think once I get myself organised I’ll be able to work it out.  Very easy to do bills account but my accounts weren’t all in one place for the last year.

lots to ponder!

Like many of us on here (or Banking or Investment threads) I couldn't live without my budgeting software; for me that is MS Money 2005 (!!!). I know some on here have migrated across to AceMoney (I think) and say it is of a similar flavour to MS Money (but supported!).

It is more manual than modern day apps (ignoring regular bills, transfers, investments), but I have tried many apps, and really wanted to like them but have never reached that level with them, shame really.  Like other products, in addition to usual budgeting it accommodates investments, savings, planning, a raft of standard reports (with the ability to modify or create your own).  I even use it to record some of the more valuable items in the home (with attached info and photos).

You really do need to know 'Your Number', otherwise you are (how can I say this delicately...) pithing in the wind.

Firegirl

cloud_dog said:

Firegirl said:

You are right!  If I put a lower percentage though I won’t get to my target.  

Under promise and over deliver!

I've never known anyone to complain that they have reached their goal too early or that they have too much money.

Over the years in my spreadsheet I used a future return rate of 3% on investments (plus some cash products) and I just updated the actuals each year.  I used to 'stress test' things in half degree steps (0.5% ranging to 5%), just to see the impact.  I started to update things monthly as I have got closer to the target number, and am now doing far too frequently TBH.

Under promise and over deliver for work def….but for me I find it motivating to ridiculously over reach and try to smash through goals I thought it would be nearly impossible to reach!  However I am fully aware that I might look back on this thread and realise I really should have taken your approach 

Yes, I know I really need to work out my number.  Everyone is tell me this and I will do it.   I think I might have to go into hiding on this thread until I work it out

enthusiasticsaver

Just remember your number is movable.  I went back and looked to see what my number was when I was preparing for retirement back in 2014.  I vastly underestimated what we needed but luckily over delivered so it worked out alright. 

Firegirl

Yes,  I think it’s hard really to work out because although hubby and I are very organised we’ve a weird way of splitting it up.  We don’t do everything 50/50. He pays most bills as his job is perm, I top up bills account if it needs it. I pay for holidays and all the fun things, and previously made overpayments to our mortgage. Now it will go to pension but it will be for both of us in retirement.  

I’ll have a go tomorrow and see where I end up!

Firegirl

Ok first attempt at my number.  All figures rounded up.

Bills account is accurate and personal spend is rounded up for what I’d want to do in retirement rather than what I do now.  Interestingly me paying for family holidays pretty much breaks even with OH paying most of the monthly bills.  Family holidays based on this year with 2 teenagers so left same as hubby and I might go on 2 holidays.

My total monthly rounded up £2500
—————————
Bills £1100 per month (Council tax/gas/electricity/ factor/ broad band/tv licence/mobile/food

50% £550

Personal spend

Eating out/coffee  £400

Hairdresser £50

Clothes £50

Family Holidays £1000 - 50% £500

Sister holiday £50

Girls holiday £50

Xmas and birthdays £150

Car insurance/Mot/tyres £100

Replace car £250

Home improvements and kitchen goods £50