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  • FIRST POST
    • Sea Shell
    • By Sea Shell 29th Jun 19, 2:14 PM
    • 2,415Posts
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    Sea Shell
    It's time to start digging up those Squirrelled Nuts!!!!
    • #1
    • 29th Jun 19, 2:14 PM
    It's time to start digging up those Squirrelled Nuts!!!! 29th Jun 19 at 2:14 PM
    Hi Everyone and welcome to my new thread.

    Original thread can be found here... https://forums.moneysavingexpert.com/showthread.php?t=5631875

    As you may know, DH has already finished work and I am also due to finish in 3 weeks time . We hope that our FIRE pot is now enough (our IFA seems happy!)...and so I have made the decision to jump too!!!!!

    This is going to be the next adventure, so if you want to watch us crash and burn, subscribe now!!! - Seriously, though, we are confident we've got our figures right for our circumstances and we'll have a comfortable retirement. Our idea of comfortable, would be spending approx 15k-20k pa. We currently average about 13k pa spends.

    Anyway, some numbers....

    As of today our total FIRE pot stands at....536,129. This is made up of...

    DC pension pots - 303,729
    S&S ISAs - 133,648
    Fixed term cash - 69,715
    Easy access cash - 29,037 (net of stoozed CC balances)

    Will will also have SP's (eventually) which we'll look to pay-up to max nearer the time (i'm 3 years short), plus DH has 2 DB pensions due to start paying in approx 12 years of c. 8300 in today's money (indexed).

    I look forward to your company.
    Last edited by Sea Shell; 30-06-2019 at 5:30 AM.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
Page 1
    • ProDave
    • By ProDave 29th Jun 19, 4:51 PM
    • 1,310 Posts
    • 1,568 Thanks
    ProDave
    • #2
    • 29th Jun 19, 4:51 PM
    • #2
    • 29th Jun 19, 4:51 PM
    I like to make things really simple.

    If you just lumped everything into a pot and drew 20K pa it would last 26 years. without knowing how old you are, I don't know if that would be enough.

    But in 14 years time, the amount you need to draw from the pot goes down by 8300 to 11700. So in those 14 years your pot has gone down from 536K to 256K and drawing 11700 pa from that it will last another 21 years. So that is already up to a total of 35 years.

    Then there is the state pension. In the region of 15K for both of you. So if you really only need 20K pa then your DB pensions plus state pensions is enough for you. So arguably your pot only has to see you through to state pension age. Anything else is a bonus.

    And all that assumes it sits in a pot earning nothing, so again it should do better than that.

    P.S.

    What does "DH" mean? I am familliar with "OH" for Other Half, but DH eludes me.
    • Sea Shell
    • By Sea Shell 29th Jun 19, 4:55 PM
    • 2,415 Posts
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    Sea Shell
    • #3
    • 29th Jun 19, 4:55 PM
    • #3
    • 29th Jun 19, 4:55 PM
    Dearest/Darling Husband
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • bostonerimus
    • By bostonerimus 29th Jun 19, 5:56 PM
    • 3,193 Posts
    • 2,540 Thanks
    bostonerimus
    • #4
    • 29th Jun 19, 5:56 PM
    • #4
    • 29th Jun 19, 5:56 PM
    You look to be in good shape. All you have to do is manage your immediately available assets of around 230k to cover the 14 years until the pensions kick in. How successful you are will come down to your asset mix and IFA costs. You seem to have the budgeting aspect well in hand.
    Misanthrope in search of similar for mutual loathing
    • Sea Shell
    • By Sea Shell 29th Jun 19, 6:11 PM
    • 2,415 Posts
    • 4,336 Thanks
    Sea Shell
    • #5
    • 29th Jun 19, 6:11 PM
    • #5
    • 29th Jun 19, 6:11 PM
    Luckily our IFA is a family friend, so a meal and a bottle of wine cover their fees!!! They've given advice, rather than actively managed anything.

    TBH we've kept it all quite simple and not chased returns with complicated portfolios.

    The real fun will start in 2 years time when DH moves his DC pensions into drawdown...sooo many options/platforms/funds to choose from. Expect many questions!!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • bluenose1
    • By bluenose1 29th Jun 19, 6:20 PM
    • 2,167 Posts
    • 3,561 Thanks
    bluenose1
    • #6
    • 29th Jun 19, 6:20 PM
    • #6
    • 29th Jun 19, 6:20 PM
    Wow, exciting times. Can't wait until I leave work.
    Wish our spending was so low, annual trips to Disney cost us a lot, which at least for this year we are not willing to forgo.
    Plus I can't convince my oh that we don't need an expensive TV/sport/ broadband package.
    Was just looking at your figures. Are you going to pay the 2,880 into a SIPP, or does the size of your DC pot make not as worth it?
    Good luck.
    Money SPENDING Expert

    • Sea Shell
    • By Sea Shell 29th Jun 19, 6:32 PM
    • 2,415 Posts
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    Sea Shell
    • #7
    • 29th Jun 19, 6:32 PM
    • #7
    • 29th Jun 19, 6:32 PM
    I'm going to continue making payments into my pension as I'll be able to get it all back out tax free over time.

    However DH isn't, as our plan is to get his whole pot out tax free BEFORE his DB pensions come into play.

    Most of this money will get reinvested into our ISA's to be drawn at our leisure (tax free), unless we spend too much!!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • GSP
    • By GSP 29th Jun 19, 8:01 PM
    • 232 Posts
    • 66 Thanks
    GSP
    • #8
    • 29th Jun 19, 8:01 PM
    • #8
    • 29th Jun 19, 8:01 PM
    "plus DH has 2 DB pensions due to start paying in approx 14 years of c. 8300 in today's money (indexed)".

    Just wondering how old your DH was if there is still 14 years to wait for these db pensions.

    Refreshing to see the thoughts on here. I am nearly two years into drawdown and have a pot of 740k. The OH has a dc fund of 150k, but has 3 years to go yet before she can drawdown.
    There has never been an exact figure how much we could take out each year. I suppose that's being a dc pot with market ups and downs to consider. Without hijacking this thread, how much should we could we take out. I have 10 years to go to SP with 3 years still to pay up for max. OH has 17 years before SP. Again sorry for hijacking.
    • enthusiasticsaver
    • By enthusiasticsaver 29th Jun 19, 10:05 PM
    • 9,037 Posts
    • 21,035 Thanks
    enthusiasticsaver
    • #9
    • 29th Jun 19, 10:05 PM
    • #9
    • 29th Jun 19, 10:05 PM
    Congrats on only having 3 weeks left. You wont regret it and you seem to be in good shape if you can live comfortably on 15k -20k per year.

    We are in a different position in that my DH has a very good DB pension which comfortably covers our outgoings with mine topping it up to maybe pay for an additional holiday each year. We are spending on the house though and that is working out expensive but should settle down next year to just decorating which will be cheaper than new kitchens and bathrooms. Our IFA has "lifestyled" us though and worked out we can withdraw 20k a year from our investments until we are 99 before it will all be gone! Luckily we wont need to withdraw anything like that.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Sea Shell
    • By Sea Shell 30th Jun 19, 5:33 AM
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    Sea Shell
    "plus DH has 2 DB pensions due to start paying in approx 14 years of c. 8300 in today's money (indexed)".

    Just wondering how old your DH was if there is still 14 years to wait for these db pensions.
    Originally posted by GSP
    Sorry that was my typo, it's actually only 12 years!! (have edited OP)
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • bostonerimus
    • By bostonerimus 30th Jun 19, 1:08 PM
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    bostonerimus
    We are spending on the house though and that is working out expensive but should settle down next year to just decorating which will be cheaper than new kitchens and bathrooms. Our IFA has "lifestyled" us though and worked out we can withdraw 20k a year from our investments until we are 99 before it will all be gone! Luckily we wont need to withdraw anything like that.
    Originally posted by enthusiasticsaver
    One difficulty with drawdown planning is spending variability. It's easy enough to do a budget for regular items like food, utilities and taxes etc, but irregular large costs are often missed. You need to have a plan to replace your car, do major home renovations and the worst one of all, pay for long term care. So if your budget is 20k could it stand to be 30k or 40k for a couple of years when you need to buy a new car and replace your central heating?

    Of course regular spending does decrease as people age and become less active, but then there are often large costs in the last years as help is required with aspects of daily life and maybe a care home stay. This wasn't much of a worry 30 or 40 years ago, but current government and local authority funding and policy means that it must be considered today.
    Misanthrope in search of similar for mutual loathing
    • BoxerfanUK
    • By BoxerfanUK 30th Jun 19, 7:43 PM
    • 500 Posts
    • 404 Thanks
    BoxerfanUK
    The best of luck to you both Sea Shell. Enjoy your retirement
    • Audaxer
    • By Audaxer 30th Jun 19, 7:47 PM
    • 1,832 Posts
    • 1,141 Thanks
    Audaxer
    One difficulty with drawdown planning is spending variability. It's easy enough to do a budget for regular items like food, utilities and taxes etc, but irregular large costs are often missed. You need to have a plan to replace your car, do major home renovations and the worst one of all, pay for long term care. So if your budget is 20k could it stand to be 30k or 40k for a couple of years when you need to buy a new car and replace your central heating?
    Originally posted by bostonerimus
    That's a good point. I'm surprised in retirement planning that a specific annual spend amount is often quoted as if that amount, increased with inflation, is likely to be the spend each year. I'm interested to know how people on a tight drawdown, budget for large purchases like cars and large home improvements etc.

    A total annual spend of 15k to 20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.
    • Sea Shell
    • By Sea Shell 30th Jun 19, 8:15 PM
    • 2,415 Posts
    • 4,336 Thanks
    Sea Shell
    At least you can all learn from our mistakes if it all goes spectacularly wrong!!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • Sea Shell
    • By Sea Shell 1st Jul 19, 6:01 AM
    • 2,415 Posts
    • 4,336 Thanks
    Sea Shell
    A total annual spend of 15k to 20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.
    Originally posted by Audaxer
    For some perspective, our year to date spend is currently a whopping 11,748.

    So if we gave ourselves a 20k spend, that's almost doubling our current level of spending. Who gets to do that in retirement!!?? It's all relative.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • bostonerimus
    • By bostonerimus 1st Jul 19, 2:44 PM
    • 3,193 Posts
    • 2,540 Thanks
    bostonerimus
    For some perspective, our year to date spend is currently a whopping 11,748.

    So if we gave ourselves a 20k spend, that's almost doubling our current level of spending. Who gets to do that in retirement!!?? It's all relative.
    Originally posted by Sea Shell
    Well you seem to be on track to be around budget. But you need to plan for periodic significant over spends. As an example I get $36k/year in pension and rent and my spending budget is $30k/year, but this year I had to paint the house and that cost $14k so that came out of my "slush fund" that I build up with the $6k/year that I have left over from the pension and rent.
    Misanthrope in search of similar for mutual loathing
    • p00hsticks
    • By p00hsticks 1st Jul 19, 2:52 PM
    • 7,108 Posts
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    p00hsticks
    A total annual spend of 15k to 20k in retirement seems very low for a couple in my view, even not taking account of occasional very large purchases that may be needed.
    Originally posted by Audaxer

    Median household income in the UK is around 28k.

    If you are a homeowner and have repaid your mortgage by the time you retire then for many households 15k to 20k will be comparable with what they were taking home when working and paying off a mortgage, particularly when you factor in that spread across two people there will be no NI or income tax to pay.


    We're currently spending about 15k - 18k a year, although we have a separate savings pot put aside for any large spends such as a new car etc (although we may do away with the car altogether when the current one reaches the end of it's life)
    Last edited by p00hsticks; 01-07-2019 at 2:55 PM.
    • Audaxer
    • By Audaxer 1st Jul 19, 3:38 PM
    • 1,832 Posts
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    Audaxer
    Median household income in the UK is around 28k.

    If you are a homeowner and have repaid your mortgage by the time you retire then for many households 15k to 20k will be comparable with what they were taking home when working and paying off a mortgage, particularly when you factor in that spread across two people there will be no NI or income tax to pay.
    Originally posted by p00hsticks
    That's true. In my case I was lucky to be able to pay off my mortgage years ago, so our total annual spend hasn't reduced by much in retirement
    We're currently spending about 15k - 18k a year, although we have a separate savings pot put aside for any large spends such as a new car etc (although we may do away with the car altogether when the current one reaches the end of it's life)
    I'm amazed as our annual spend is much higher than that even although I do monitor our spending closely, and I do not consider us as big spenders.
    • JonBr
    • By JonBr 1st Jul 19, 3:43 PM
    • 5 Posts
    • 3 Thanks
    JonBr
    Good luck Sea Shell! Your situation is much like mine, only the Mrs has not retired yet as she is 5 years younger than me. Me, I'm FIRE at 54, as of this coming Friday....
    • Busy Mee1
    • By Busy Mee1 1st Jul 19, 3:48 PM
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    Busy Mee1
    A great new thread. I will be really interested to see how you get on. My OH retires in 3 months and I retire in 12 months. We both have Civil Service Pensions with lump sums, so no drawdown dilemmas for us.

    We intend living on our pensions but supplementing this from our capital in the early years to enable us to travel and for any big purchases. The hardest thing for us will be changing our mindset to start to spend capital rather than saving it.
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