It's time to start digging up those Squirrelled Nuts!!!!

Sea_Shell · 29 June 2019 at 3:14PM

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 :j:j. 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. :beer::beer:

*** Update, for anyone new to this thread - as at end of December 2021 ***

(December 2020 figures in brackets)

DC Pension pots - £375,237 (£345,014) - £17,000 withdrawn
S&S ISAs - £220,688 (£169,188) - £25,000 added
Locked cash (now Loanpad P2P) - £3,250 (£59.237 - was fixed term bond)
Ready cash - £53,980 (£24,220) - now includes £40k Premium Bonds

Total - £653,155 (£597,659)

ETA - and this is where we are as at December 2022

£12,400 – Easy Access Cash (net of CC balances)
£10,030 – Loanpad P2P (60 day notice)
£22,808 – Various 1 yr fixes, due to start maturing from April 23 onwards at regular intervals.
£32,840 – Aviva Drawdown pension pot (being drawn at £1150 pm)
£197,500 – S&S ISAs
£295,640 – Untouched DC pension pots

Total - £571,350

*** Update as at end June 2023 - 4 years in ***

Easy access cash - £11,500
Loanpad P2P - £10,000
1/2 year fixed cash - £26,500
Aviva Drawdown pot - £27,000
S&S ISAs - £211,000
Untouched Pensions - £305,000

Total - £591,000

As at end June 2019, we had £536,000
Over the last 4 years we have spent £61,000

*** Update as at end December 2023 ***
£14,917 – Easy Access Cash
£11,740 – Loanpad P2P (60 day notice)
£61,583 – Various fixes, maturing at regular intervals. Ave rate 5.6%
£104,470 – DH's Drawdown pension pot (being drawn at £1150 pm) Includes some cash within total.
£215,347 – S&S ISAs
£210,450 – Untouched DC pension pots (mine, basically)

Total - £618,500

ProDave · 29 June 2019 at 5:51PM

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 · 29 June 2019 at 5:55PM

(reserved for future use)

bostonerimus · 29 June 2019 at 6:56PM

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.

Sea_Shell · 29 June 2019 at 7:11PM

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!!!

bluenose1 · 29 June 2019 at 7:20PM

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.

Sea_Shell · 29 June 2019 at 7:32PM

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!!!

GSP · 29 June 2019 at 9:01PM

"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 · 29 June 2019 at 11:05PM

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.

Sea_Shell · 30 June 2019 at 6:33AM

GSP wrote: »

"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.

Sorry that was my typo, it's actually only 12 years!! (have edited OP)

bostonerimus · 30 June 2019 at 2:08PM

enthusiasticsaver wrote: »

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.

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.

It's time to start digging up those Squirrelled Nuts!!!!

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