r/LeanFireUK

Obviously a question only I can answer, but it's the question I'm asking myself.

With the changes to inheritance tax with pensions now being included as part of the estate going forward, I keep thinking to myself, where is the balance?

I'm 32 and wife is 36. Mine and my wife's SIPP's total 315k. Meanwhile our total ISA balances sit at 38k. I've just made the decision today to flip the way I fund my pension and ISA's. I've cut my monthly pension contributions down to 6% from 18% with a 6% employer contribution. (Salary 100k)

I used to fund my pension first and the fund my ISA from bonus each year, but I'm now funding my ISA first and letting my pension contributions be a roll of the dice from the bonus I receive (up to 40%) I will still contribute everything over 100k into my pension, but it will be solely from the bonus. Personally I feel I've put enough in that come what may, I will still have enough money in that pot in retirement to live a comfortable life and also support our children. Now it's time to build the bridge.

Really, I'm asking the question of you all. When is your enough? What are your loosely held plans for balancing the living and potentially gifting of your hard earned wealth? Do you plan to emigrate? If so, where?

Curious to see others future plans.

Burner account. Just wanting some input on my plan. M55, looking to stop the grind next year and focus on creative interests which could end up not making any £, but even if it does it'll be uneven. So let's assume £0 from that! Meanwhile I have DC pots totalling £500k and a stocks and shares ISA of £40k, plus about £10k in savings. At age 60 I have a small DB of £2.4k kicking in. There is another DB of £6.5k at 63. These are both inflation protected. Full SP to start at 67 (maybe!) My wife (F54) wants to stop work also next year, taking £15k per year from her SIPP (£100k) and ISA (£50k) until her £15k teacher's pension kicks in at 60. She gets another £4k DB at 67 along with full SP. She also plans to do a bit of part-time work maybe. We own our home mortgage-free. Kids grown up and moved out, and we would help them get on the housing ladder in a few years maybe by downsizing.

Basically we are burned out after doing our respective careers for 30+ years.

Now, here is a part I need input on. I am thinking seriously about buying an annuity with £410k of the DC money, to start next year when I finish aged 56. Rates are comparatively very attractive right now, and if I can get near the £29k to £30k I have been quoted, that will do me. That is a flat annuity that does not increase with inflation, so obviously it will be progressively worth less. But that is where the DBs and SP come in, and they are nicely staggered. Taking a flat annuity allows me to maximise what I get now to help bridge what seems like a scary gulf to the SP. Retiring at 56 also means more "go go" years so we get the financial benefit at the right time. (Saying that, we are frugal and do everything on the cheap as much as possible.) £410k is a big amount to hand over, but it would be a weight off my shoulders not to have to worry about markets.

What would you do? The annuity or drawdown? Or put the whole thing off for a few years?

As title says, I turned 50 this week so am doing a proper overview of the finances to see where we are.

I currently earn £62k as a Social Work manager in NHS in Northern Ireland and I've been paying into the NHS defined benefit pension for around 18 years. If I continue in this role for the next 5 years I will be able to draw a yearly pension of just over £13k from 55. My wife is currently working part-time in a minimum wage job (20 hours) which brings in around £1k per month.

We also own 2 rental properties (mortgage free) which bring in around £1300 per month before taxes and expenses.

So to break everything down it looks like this:

At 55- incomings:
DB NHS pension: £13k

Rental income (before tax and expenses) £15k (so probably around £11k net)

ISA (currently £34k but will pay in max every year): £130-150k depending on markets

at 55 - expenditure:

Aiming to be mortgage free (current mortgage is £44k and we overpay)

Average family expenditure for basics is around £16k per year

So I'm aiming to achieve income of £30k per year until we hit state pension age at 67 when both myself and my wife will get a full pension.

My plan is to use the ISA to top up rental income and pension for potentially 12 years so I could possibly take £10k of that per year if I wanted but in some years I wouldn't use as much. So aim isn't really to maintain the ISA amount, rather to drain it while we are still young enough to enjoy it and then aim to hit 67 with perhaps £40-50k left when the state pension kicks in.

We live fairly frugally but would hope to get at least one holiday a year and live in relative comfort.

Thoughts?

I started writing this as a comment in the weekly thread but it got longer, so I'm creating a separate post.

We're probably going to sell maybe 5-10%-ish of S&S ISAs to pay off the mortgage in 2 months time.

I have a bit of a mish-mash of equity funds in it and trying to decide what's best to sell.

Simple example:

1. Sell some of the highest performing fund and realise the gains with highest current growth

2. Sell something less well performing (still in a profitable state) and hold on to the stronger performing funds

3. Split disinvesting across them and take a bit of each

For comparison, the ending mortgage rate is 1.3% p.a, so all the funds have comfortably outperformed the mortgage interest until now, but I'm looking at 5% p.a from December currently.

What would you leanfire folk do?

(This is also a reminder to stop putting off consolidating my funds, and longer term I will do that - so no need to tell me that)

What have you been working on this week? Please use this thread to discuss any progress, setbacks, quick questions or just plain old rants to the community.

Wife and I retired 10 years ago (at 45), we always had cats and dogs (and fostered for decades too). Around 2 years ago, we signed up with a few pet platforms (so no capital outlay) for walking dogs, boarding cats, doing drop ins and house sits. The platforms take 30% commission but most or our regular clients now work with us direct.

It's a hobby and not a chore. Keeps us active and fit with long fast walks. Averaging around 10 to 15 hours a week between the two of us. (Excluding the odd over day/night sits)

Have met and bonded with some really nice cats and dogs. House sitting also helps with a old "cabin fever" retirement issue!

Our average household monthly expenses from the last 12 months is £1,041pm (we live a humble quiet boring lifestyle)

Over the last 12 months, pet income is averaging £785pm.

So now a tiny shortfall of £256pm, funded by interest on savings and capital is not touched.

The change in our FIRE model forecast has been material as this income was never in the model originally, especially if I push that average pet income out for another 3, 5 or 7 years.

As we don't really need the money, we are selective about excepting jobs. Over night in a one bed flat with no garden, sorry no! Over night in a 6 bedroom £3m mansion, yes we can help! It's like getting paid to stay in a luxury Air B&B, but with a few dog walks!

Hey all.

I’m currently targeting a retirement age of 50, and I’m currently 35. My target is an ISA value of £550-600k. I currently add 25-30% of my income to my ISA, and also contribute 5% to my SIPP with my employer adding 10%. This will be accessible from 57 at the moment, so my ISA is intended to allow me to retire earlier than that. My personal contribution rate to the ISA is weighted thus to maximise the amount available from 50 or whenever I hit my target.

I intend to invest the ISA in investment trusts with histories of growing dividends (property, ftse index like CTY etc) when I hit the desired amount, aiming for a blended yield of 5% which will be my sole source of income between retirement and gaining access to my pension.

With an aim of having expenses below £25,000 a year, I see this as totally attainable as I’ve been tracking my finances religiously for the past couple of years. The access to the pension will just boost my income when it unlocks.

What am I overlooking? Is a portfolio of this size and yield all I’d need to fund my retirement?

I'm really disciplined with my finances, and have been educating myself on behavioural finance over the last year, but for some reason I feel like it can't be as simple as the approach I've outlined. I'd genuinely love to hear people's thought's and any advice from people who may have taken a similar approach!

Thanks in advance.

Edit: Update from 'pension' to 'SIPP'.

I'm currently paying in £1000 a month to the ISA, intending to increase by £100 each year up to £1,666p/m which will result in maxing out ISA contributions. SIPP is at £39k at the moment, ISA at £10k, with personal and employer contributions to SIPP totalling just shy of £800 a month.

What have you been working on this week? Please use this thread to discuss any progress, setbacks, quick questions or just plain old rants to the community.