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  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 677Posts
    • 3,037Thanks
    SuperSecretSquirrel
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of 525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, 50pm. Amazingly, if we were to keep up with this 50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just 50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to 250pm, 200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), 200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying 250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over 250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to 500pm. Two years later the overpayment would need to drop to 450pm (to avoid penalty), year after that drop to 400, and the following year drop to 350, and the years after that drop to 250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!
    __________

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!
    __________

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!
    __________

    January 2018 Update:

    Paid the mortgage off in full today (12/01/2018)
    Last edited by SuperSecretSquirrel; 12-01-2018 at 9:42 PM. Reason: We did it! :D

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
Page 28
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 1st Feb 18, 2:38 PM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Hi Ed, I hear ya

    I, too, am presented with a page of red, but my chance of securing a top card has rocketed from 5% to 10% this month

    Credit scores can appear to defy logic at times, and I know that they are pretty meaningless when all is said and done. Mine did drop like a stone when I first started stoozing though, and they have trended upwards ever since, so I guess it is not quite as random as a raffle

    Then again, there's nothing to say that you can't get a run of 100 heads in a row when flipping a coin, it's just not very likely - maybe my puny human brain is trying to see a pattern in truly random data
    Last edited by SuperSecretSquirrel; 02-02-2018 at 1:24 PM.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Feb 18, 1:31 PM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st February 2018
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    125,000.00        0.00        0.00        0.00
    Pensions:        79,627.82    1,169.16    3,789.96   17,103.98
    S&S:             27,394.71      787.44    3,221.67   13,339.62
    Cash:            24,489.58  -15,086.78  -16,428.59  -20,485.95
    Car Value:       14,725.00       10.00     -415.00   -2,000.00
    Mortgage:             0.00   14,140.28   15,667.31   22,438.21
    Due to HMRC:       -170.58      342.65      279.57      258.28
    Student Loan:      -248.61       66.34      198.93    1,817.82
    Total:          270,817.92    1,429.09    6,313.85   32,471.96
    90.3% of the way to 300k net worth (2020 challenge), 0.0% mortgage ltv, 51,713.71 liquid assets, 29.1% financially independent.
    __________________________________________________

    We're 1,429.09 ahead of where we stood last month. We paid some large annual expenses in January, and the mortgage ERC, so I'm happy with that

    Huge positives:
    1) A big fat zero on the mortgage line
    2) Sum total of all debt is negligible (stooze not considered debt and is accounted for in the cash line)
    3) Over 90% of the way to the end of 2020 challenge target of a 300k net worth
    4) Raced ahead to 29.1% FI

    I find the last entry to be the most exciting one

    Having removed the mortgage from our outgoings, we should be able to live quite happily on around 18k a year. I knock the house and car values off total net worth for a rough and ready interest accruing assets value of 131,092.92. At a 4% withdrawal rate we could spend 5,243.72 a year (if we ignore the fact that the pensions won't be accessible for at least 20 years!), which is 29.1% of the required 18k.

    There's still a very long way to go, but it does feel like we're getting there slowly

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • edinburgher
    • By edinburgher 2nd Feb 18, 1:39 PM
    • 11,097 Posts
    • 59,503 Thanks
    edinburgher
    You are, as the French say, "keeleeng eet"

    Also, you have a very conservative set of FI figures. If you accounted for your state pension (which might still exist in some form when we're old geezers), you're probably more like 50-60% there.
    • VDOT47
    • By VDOT47 2nd Feb 18, 1:48 PM
    • 112 Posts
    • 305 Thanks
    VDOT47
    Yes, you absolutely have to include state pension in your retirement fund plans!


    I must admit, as I read though your diary, I did wonder why you don't include your CC stooze debts on the NW schedule?
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (12/04/18) 246,637.06
    End Date Aug 2040 Original End Date February 2042
    • gallygirl
    • By gallygirl 2nd Feb 18, 10:10 PM
    • 16,553 Posts
    • 109,338 Thanks
    gallygirl
    4) Raced ahead to 29.1% FI
    Originally posted by SuperSecretSquirrel

    So when are you projecting 30% and when 33% .
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Feb 18, 9:39 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    You are, as the French say, "keeleeng eet"

    Also, you have a very conservative set of FI figures. If you accounted for your state pension (which might still exist in some form when we're old geezers), you're probably more like 50-60% there.
    Originally posted by edinburgher
    Love the french Ed, have you been taking lessons?

    You have a good point regards the figures being too conservative. A 4% withdrawal rate should in theory conserve the capital, so we would have a big chunk of change sitting around when we eventually reached state pension age. If the state pension keeps up with inflation, and the goalposts don't get moved much, we wouldn't be needing much personal provision on top, so we'd have worked longer than necessary. Worse, if the state pension were to be means tested we'd likely be penalised.

    Another way of looking at it would be if we retired at 45, with 25x annual expenses behind us, and our state pensions started paying out at 70, our nest egg would only need to keep up with inflation (no additional gains), for us to reach state pension age with zero left in the pot, from which point the state pension would be enough to cover our needs. Investments keeping up with inflation with no real gains is too pessimistic, even for me with my cautious nature!

    I think I'll need to think about this properly to come up with a plan that does factor in state pension. Was your 50-60% a simple finger in air estimate, or can you point me in the direction of some resources to help work this stuff out?

    I guess it's all pretty academic, since we still intend on working in some capacity for a good few years yet, nowhere near qualifying for the full state pension yet for starters! Having more realistic figures would certainly help with making a decision on when to go part time or go for a career change or whatever we end up doing though. Yes, I definitely need to work on this.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Feb 18, 9:42 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Yes, you absolutely have to include state pension in your retirement fund plans!

    I must admit, as I read though your diary, I did wonder why you don't include your CC stooze debts on the NW schedule?
    Originally posted by VDOT47
    Agreed, omitting the state pension is a mistake. It feels like a zillion years away, and there's plenty of potential for political interference between now and then, but it makes sense to include it, if I can figure out how!

    Maybe I'll track two sets of figures, one factoring in state pension, and the other not. The first would be a realistic plan, the second a super cautious one. Both would be useful to me in their own ways.

    As for the stooze debts, you may have noticed I have a terrible habit of paying off my debts way ahead of schedule. I paid an up front fee to borrow most of my stooze pot, paying it back early would be entirely counterproductive, so for me it's better that they're not even listed as debts. Then there's the fact that I'm not willing to do anything with the stooze pot funds other than hold in super safe cash accounts, and then when the 0% deals end shift out of cash to pay off in full immediately. A card debts line with a -40k value and a cash line with a +64k value would do me no good - it would look like I needed to do something with some of the cash when in fact the majority of it is only there temporarily and can't be risked. Card debt of zero and cash at 24k makes no difference to the bottom line, and better matches how I actually think about the balances.

    Of course, the very same argument could have been made for removing the mortgage line when we hit mortgage neutral, and revise down the cash holding accordingly. I didn't do that. What can I say, my brain is a strange and inconsistent place

    Maybe it boils down to the mortgage having always been a debt as far as I'm concerned, whereas the stooze is a clever work of fiction allowing me to get one over on the banks
    Last edited by SuperSecretSquirrel; 03-02-2018 at 10:01 AM.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Feb 18, 9:45 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel

    So when are you projecting 30% and when 33% .
    Originally posted by gallygirl
    Hi gally

    If you had asked me a couple of months ago, I could tell you. My greatly simplified spreadsheet doesn't do much in the way of forecasting, so I honestly don't know would be the answer right now.

    Of course, I never did really know... My forecasts have never been particularly accurate. I'm not a pessimist in day to day life, but it seems I am when it comes to projecting future finances!

    Couple that with the point by Ed and VDOT47 about state pension, and the earlier post by NM regards the unproductive cash balance, and it seems like a waste of time anyway

    I'll try to reconcile these issues, and then come up with a plan or target or forecast or something

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • Karmacat
    • By Karmacat 3rd Feb 18, 10:51 AM
    • 29,006 Posts
    • 165,116 Thanks
    Karmacat
    Discussion about the projections on retirement is very interesting for me, thanks for this. Didn't feel quite right to post the details on your own thread, SSS, but I've worked out mine (after the fact of retiring, of course ) by allowing for what I need to spend year by year until I get the state pension, including a hefty amount for house maintenance, and *then* worked out the 25 x goal amount. I did that bit in reverse, sort of thing - figured out what I'd have left, and divided it by 25, to see if it was enough. It was - it increases my income after the age of 66 by about two thirds.

    And those figures don't include any *potential* money to come to me after the French apartment finally sells, or of releasing money from the house I currently live in (no kids of my own, nephews and niece all doing very well financially, I don't mind giving them a windfall but they're not going to get much, in their terms at any rate).

    This ignores any income from becoming the second JK Rowling, of course
    Retired August 2016
    • edinburgher
    • By edinburgher 3rd Feb 18, 12:52 PM
    • 11,097 Posts
    • 59,503 Thanks
    edinburgher
    It should be relatively straightforward to model if you get a state pension forecast? I've created simple models in the past that consider 25x the value of the current forecast and add that to NW. Of course, that ignores things like the time value of money and inflation, but as pensions are uprated I figure treating it as the stated value in the forecast should work out fairly well. Either that or just look at what happens if you burn down your workplace pensions and ISAs with the expectation of SP filling the gap come 68? for you. In any case, you're lowballing.

    State pension (and a couple of DB pensions which work on a similar model (of not bothering to fund the bloody things)) are the reasons I'm simultaneously relaxed and horrified by the prospect of retirement

    My most optimistic calculations show that I'm already something like 60% of the way to if not FI proper, something like "Barista FI" where I could coast in a diddy job for 5 years or so to retirement proper. Reasons to be cheerful
    • Escapar2020
    • By Escapar2020 4th Feb 18, 8:31 AM
    • 75 Posts
    • 150 Thanks
    Escapar2020
    This is all very interesting! I hear different mentions of spreadsheets, is there something good and simple to download rather than starting from scratch?
    Jan17: 42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual 29,983. OP offset 27,847. Full off-set 15,911
    • crv1963
    • By crv1963 4th Feb 18, 10:41 AM
    • 271 Posts
    • 632 Thanks
    crv1963
    Hi


    We simply worked out on paper what we will need to have, definitely include the SP, we worked with over estimated bills and underestimated income to build a margin of error in our favour in our calculations.


    Once we had that we have worked out the dates of the various pensions coming in then what pots of money we need to bridge any gaps. So we worked out that in reality I can really retire age 60/62 wife age 57/59, but that the work we will need to do can be in a different field/ profession/ part time as long as we have built up a good proportion of our pots.


    Interestingly I worked an extra shift yesterday in a different area of the organisation and I really enjoyed it. I worked with a woman who had taken early retirement and she said although she'd taken a hit with the pension reduction, for her doing shifts when she wanted if she wanted was such a release from the work related stress she actually enjoyed working back at her old workplace.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • gallygirl
    • By gallygirl 4th Feb 18, 11:08 AM
    • 16,553 Posts
    • 109,338 Thanks
    gallygirl
    This is all very interesting! I hear different mentions of spreadsheets, is there something good and simple to download rather than starting from scratch?
    Originally posted by Escapar2020
    There are various models you can use and download the results of - CFire sim is one that comes to mind - but that is based on you knowing what income/savings you will have and your projected spending. It then plugs all the data in and runs it through all the financial cycles we've had over the last 100 years, plus some random ones, and tells you what % success rate you have (i.e. how likely you are to end up broke in the gutter because your money has run out ).
    However, it was only when I built my own, very simple, spreadsheet that I really understood what was happening and what could happen to my money.
    I set it up with income being fed in at various fixed stages (e.g. I have two 'massive' DB pensions (around 2.2k a year in total ) which come payable at 60 and I projected state retirement coming in at 68 - it's currently 67 so I added an extra year. I took their current values and added x% for inflation every year. I took what I thought I would spend in retirement and added y% a year (always made inflation slightly higher than the pensions rise). Then I added rent from properties we let out with z% increase a year (less than inflation). I projected my pension pots worth and how it could grow or shrink. I did all the same based on me no longer being with Mr GG (so rental income halved). I did it with 0% inflation, 10% inflation etc. All models showed I wouldn't run out of money and I could afford to draw on my pension pot to fund extravagant holidays .
    Once I really understood the figures I then played with the online calculators and let them do their worst.. I came out with a 98% success rate, so then I jumped ship .
    Now I need to have the courage to spend some of the money in the pension pot .

    Ed - 60% to Barista FI? That's superb - and there's you beating yourself up .
    Last edited by gallygirl; 04-02-2018 at 11:11 AM.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Feb 18, 9:18 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Thanks for posting everyone, it seems my diary has never been busier!

    NM, earlier comment regards unproductive cash, I've come to realise it's not really relevant. I can shift between asset classes whenever I feel like it, so what at one moment is unproductive, at the next could be. It doesn't really matter all that much how things are allocated in the accumulation stage, but obviously it matters when moving to the withdrawal stage. Same could be said about home equity (or even the cars), but we won't want to downsize or rent in future, so leaving it off the table. I think I'm happy to leave my "interest accruing assets" calculation unchanged

    KC, you are welcome to post as much detail as you like here!

    Ed, 60% to Barista FI, that's awesome! Can't believe you were down on yourself a few days ago, you too are "keeeleeeng eeet"

    crv1963, tending towards the pessimistic or conservative side makes sense to me - better safe than sorry!

    Thanks for all the feedback on how I could include state pension in my calculations. Not had a chance to sit down with pen and paper (or a spreadsheet) yet, so not sure which approach will work best for us, but I have a feeling the gallygirl route of a spreadsheet where I can see exactly what is happening would work well. A breakdown split across all different pots would be really helpful. I sometimes worry that focusing on the headline NW value will leave us with too much held hostage in pensions, not enough available in earlier years. A proper spreadsheet that accounts for which pots can be accessed and when would help avoid that outcome. I need to start getting a grip on this rather than keep putting it off as a "problem for the distant future".

    Bit morbid, but I'll need to keep in mind that if the state pension factors in a big way, one of us dying would halve the amount coming in, without halving the expenses. A few variants for different scenarios might be required.

    Having thought about it (not very deeply I hasten to add!) I think we're already barista FI. If we both earned minimum wage (7.83 from April) and worked 20 hours a week each, we'd take home over 16kpa between us. At the moment, that's pretty close to our annual expenditure. Assuming we could arrange our shifts in such away that paid childcare wouldn't be required, add on a little income from investments etc and we're good. No idea on tax credits and the like, probably not relevant if you have savings, but it seems they wouldn't be required anyway. This has really buoyed my feelings. We earn a fair bit more than that, and the difference is being saved for the future. Were not a zillion miles away from pulling this off, are we?

    I know our expenses won't remain static, the children will be far more expensive ten to twenty years from now for a start, and houses need maintenance, cars need replacing, etc, but knowing we now have what can be considered a huge safety net of being able to get by on very little income is very heartening

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • VDOT47
    • By VDOT47 6th Feb 18, 9:34 AM
    • 112 Posts
    • 305 Thanks
    VDOT47
    Sounds like a good position to be in at the moment SSS!


    My thinking about retirement is very much more 'broad brush' without spreadsheets etc (although I'm wondering if I should start one lol) - basically, using today's expenses (which I think is how you need to look at it, as no one has a crystal ball on how inflation will affect things) how much would me and OH need to live off, excluding the mortgage (as this would be paid off in a future retirement scenario). I think it would be about 20,000 - 22,000 p.a plus 'treats' such as holidays, so all-in probably 30,000. State pension would account for c10k of that, so we would need c20k p.a. to live off. Therefore, assuming retirement at maybe 55, that is 'best case' 30 years at 20k = 600,000.


    Release maybe 200k from downsizing, take into account pensions which are automatically accruing from auto-enrolment contributions (a final pot of about 100k according to the latest scheme provider estimate) and then it probably leaves the need to have about 300k in savings/investments.


    Any more than that is bunce .....
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (12/04/18) 246,637.06
    End Date Aug 2040 Original End Date February 2042
    • greent
    • By greent 6th Feb 18, 7:59 PM
    • 6,924 Posts
    • 70,827 Thanks
    greent
    I find all of this terribly confusing. I have an old defined benefit (non contrib) pension from when I worked in a bank (VR back in 2004, when I was only working part time by then) I've looked up the guaranteed transfer value of it and it's 250K (shy a few hundred ) with my current pension (if I was of staff pensionable age) being 7.2k pa. OH also worked in a bank, similar scheme, left 2008. His current pension value would be 22k pa - he's lost his login for me to check tfr value so has asked for a reminder (will be posted) We've also got a couple of other (much smaller) pension schemes each (and should also get full state pension according to the forecasts we've received) and have a BTL (we're looking to repay the mtge in 7y) I *think* we're doing ok - but am planning on a chat with an IFA around April/ May (when OH should be in between contracts) We're 47/48 and MF on our home (val c430-450k) - but we do have 4 children...

    As a back-of-fag-packet type calculation, does it sound reasonable? We generally (when not having expensive kitchen refits! ) have quite low spends compared to many of our peers (inc those with less children)

    Obv not looking for actual guidance, just does it sound passable or not? - any major action we need to take would have to be soon, given our ages! (hence the IFA later this year)

    (sorry for hijacking!)
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 124616 01/10 104927 01/11 89873 01/12 76317 01/13 52546 01/14 35356 01/15 12133 07/15 NIL
    BTL Mtge 12/16 69786. 2018 OPs (#18) 577.06/4000
    Net sales 2018 362.51/1000 PAYDOX18 (#15) 12808.40/18694.38
    • gallygirl
    • By gallygirl 6th Feb 18, 8:32 PM
    • 16,553 Posts
    • 109,338 Thanks
    gallygirl
    Were not a zillion miles away from pulling this off, are we?
    Originally posted by SuperSecretSquirrel
    Yup, not a zillion miles at all. Definitely keeeeeleeeng eeeet
    .

    My thinking about retirement is very much more 'broad brush' without spreadsheets etc (although I'm wondering if I should start one lol) - basically, using today's expenses (which I think is how you need to look at it, as no one has a crystal ball on how inflation will affect things) how much would me and OH need to live off, excluding the mortgage (as this would be paid off in a future retirement scenario). I think it would be about 20,000 - 22,000 p.a plus 'treats' such as holidays, so all-in probably 30,000. State pension would account for c10k of that, so we would need c20k p.a. to live off. Therefore, assuming retirement at maybe 55, that is 'best case' 30 years at 20k = 600,000.


    Release maybe 200k from downsizing, take into account pensions which are automatically accruing from auto-enrolment contributions (a final pot of about 100k according to the latest scheme provider estimate) and then it probably leaves the need to have about 300k in savings/investments.


    Any more than that is bunce .....
    Originally posted by VDOT47
    That's as good a place as any to start . Now you need to start fleshing it out, staging guaranteed income against planned retirement and seeing where the gaps are - that helps decide whether your strategy should be pensions or ISA's or similar. Bearing in mind the age limit for drawing on pensions may well rise.....


    As a back-of-fag-packet type calculation, does it sound reasonable? We generally (when not having expensive kitchen refits! ) have quite low spends compared to many of our peers (inc those with less children)
    Originally posted by greent
    You appear to also be keeeeleeeng eeet GT . Your house is a major asset - would you consider downsizing when children are older (tip - get all out of the house for the summer and move without telling them ). When are pensions payable, how much do you want/need to live on and when do you want to retire are obvious starting points.
    A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort
    Mortgage Balance = 0
    "Do what others won't early in life so you can do what others can't later in life"
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Feb 18, 8:03 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Another 25 PB win in February

    Stooze stats as they stand - I've paid a total of 151.34 in money transfer fees, and 6.35 in interest, received 25.27 cashback, and won 11 x 25 prizes. 7 months into a 24 month experiment I'm 142.58 up.

    The cost of borrowing versus PB prizes shouldn't really be compared directly. Initially I had more than the stooze pot in PBs. Right now I have less, having withdrawn 12k to repay the mortgage. Further withdrawals from PBs will be needed to pay off the stooze card balances eventually, which is fair enough. Minimum card repayments are not pulled from PB balance. It's not like the values are lightyears apart, but it's not fair to say that the PBs holding is equal to the stooze pot either.

    I'll keep tracking things as I have been, but I'll also keep a note of holding size each month to work out overall return from PBs.

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Feb 18, 8:16 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Updated my signature:

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +51,713.71 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 270,817.92 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 29.1% (exc SP)


    That will do for now. Eventually another line marked (inc SP) will appear, once I've figured out how to calculate a FI% figure that includes state pension

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Mar 18, 8:42 AM
    • 677 Posts
    • 3,037 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st March 2018
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    125,000.00        0.00        0.00        0.00
    Pensions:        78,520.56   -1,107.26    2,056.79   12,576.99
    S&S:             28,057.73      663.02    2,883.19   12,864.14
    Cash:            24,995.80      506.22  -15,457.12  -20,307.77
    Car Value:       14,085.00     -640.00     -740.00   -2,515.00
    Mortgage:             0.00        0.00   14,904.43   21,644.55
    Due to HMRC:       -224.04      -53.46      259.29      245.82
    Student Loan:      -182.11       66.50      199.10    1,813.18
    Total:          270,252.94     -564.98    4,105.68   26,321.91
    90.1% of the way to 300k net worth (2020 challenge), 0.0% mortgage ltv, 52,829.49 liquid assets, 29.1% financially independent.
    __________________________________________________

    A little late posting figures this month. I managed to grab the balances on the 1st, but it has taken until now for me to find the time to post here.

    On the surface, a poor month. Net worth has fallen month on month for the first time in as long as I can remember! Surely, I must be disappointed, right?

    Wrong

    Markets were rough in February, pension has taken a hit, S&S ISA has taken a hit. All that has really happened is some of the recent obscene paper gains have been lost. No bother

    Other than that, some heavy car depreciation seems to be the only figure of note. Depreciation was suspiciously low last month so this looks like a case of playing catch up. Also, we all know cars are lean mean wealth destroying machines, so a hefty negative figure on that line should never come as a surprise!

    In other news, we are both relieved that at the end of this month, the year long spend tracking experiment will be over. I appreciate having the resulting data on hand, but the data capture has been such a chore! If we've learned anything from the process, it's that we're natural non spendy types, and our no budget budgeting style is perfectly fine

    Oh, and I've just seen that there was a 50 PB win this month

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k] Zero!
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k] +53,278.53 (MFiT4:+60k)
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k] 268,597.74 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 28.8% (exc SP)
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