Prosperous and Creative Soul Year 5

lucielle

The Italy trip sounds like it’s fast approaching!! Hope you manage to grab a swim.
L

savingholmes

I am writing this to encourage myself and motivate myself to stick with the plan - and stay in work - unless I'm given VR (and therefore unreduced pension at the rate I would have got if I stayed until age 67 and a lump sum). I had ai help with my numbers. This assumes my current income level between now and age 60 stays similar.

Mortgage neutrality & pensions recap

So after my divorce late 2021 I wrote

As I am only 3.5 years away from being able to access a pension (if desired) - I am seeing a SIPP (self invested pension) or equivalent - as the most likely route to mortgage freedom. I have one valued at £3,643 yesterday - so a long way to go before it's of much use!

That SIPP has increased in 5.5 years to £5.7K. I could take it any time now - but plan to wait until I have left work unless I ended up off long term sick. I could take 25% tax free.

By 2022 I'd made two payments to AVCs (extra pension fully tax free) of £375 each. Now I pay in £1150 a month (pre tax and NI). My AVC inputs have been £32,665 in total since October 22 and I've had £9,860 growth.

I am currently working towards getting my CCs cleared - so I can then redirect that £ towards my revised mortgage payment at the start of next year (rate increase) and towards increasing my AVCs. I'm also due to get small annual pay increases which should help with the below despite any inflation.

Contribution assumptions I modelled

Period	Monthly AVC
Now → end March 2027	£1,150
April 2027 → August 2027	£1,380
September 2027 → May 2030	£1,450

That would give around £67K pre-growth added to my existing 42.5K - so circa £109.5K. But with growth of around 5% a year - I could achieve my mortgage neutrality figure of around £127.5K by age 60.

If I took the bigger lump sum from my other pension of £26.5K (Oct 24 value) which could be work £30-34K by 2030 - I should fully meet my goal and hopefully have spare capital.

I think the other life lesson remains not to over-worry about slightly going off plan with holidays, garden etc - as in the longer term scheme of things it should be fine as my needs and wants will change over time too.

Merlin's_Beard

That is a truly excellent amount of AVCs happening!

jwil

I might be misreading what you meant, unless your employer has a different policy, but my understanding is that if you get VR after 55, you get your benefits that you've accrued up to that point, with no early reduction. Not as if you'd continued to work and contribute until 67.

It all sounds great with the plans though.

savingholmes

Hi Jwil - you're correct. I explained it wrong. I meant unreduced pension based on what I'd accrued so far - not what I would have accrued if I stayed longer. I just meant I would not suffer the near 40% reduction for leaving early.

jwil

I thought I was probably reading it wrong!

savingholmes

Well I unpeeled myself from my house Friday afternoon and had intended to go to an NT garden. Instead I bought some new sandals and emergency swim wear and went to Newborough forest beach. It is gorgeous.

I got there after 6pm!! and swam briefly but the tide was coming in and I got out of my depth quickly so - came back in. I loved it while it lasted.

The views on the way home were also stunning.

I have now booked a hotel near the airport for the last night of our stay. I can't make myself cancel a night at the other one - but at least we'll be able to maximise our time at the lake on our last day.

I need to see what other holiday related admin I still need to do. I need to upload our passport details and see if there is a form we need to submit - I think there is - on top of check in. My insurance is sorted now at least and the pet sitter - so little by little I'm getting it done. I tried all my clothes on the other day - and have now bought some sandals. Today I've bought some shoe stretchers - as new shoes rarely fit properly as I have very wide feet. Hoping it helps.

I need to take DD's form to the post office tomorrow and send it tracked. We didn't manage a swim in the end - but it was still nice to see her.

skint_spice

Lovely photos, sounds a relaxing day.

lucielle

Well done on the swimming and getting some me time.
L

beanielou

Lovely photos.