Small things matter

[Joeboy]

Big difference when retired. Can get right into it without fripperies like earning.

Nice one on the seeds. Always a good time. We've got two dozen chilli plants started nicely.

Alright - don't rub it in
I'm being made redundant in September after 32 years, so trying to decide what to do then - I'm not quite financially ready to retire, but not that far off - so hoping to do something part time that will fill the gap, but allow me time to do more of what I enjoy

When we used to chat offshore, the dream job was nightshift shelf stacker at tesco! A lot of the guys I worked with who were made redundant ended up driving supermarket home delivery vans for real! I never wanted a post offshore job as i don't play well with others, in particular fools. So saved & invested accordingly based on the 4% rule. I can say that we live a happy life on surprisingly less than we'd have thought.

I had no confidence in the state or its pension so planned as if it wouldn't be there when I got there. Look what happened! Still not rubbing it in! Just a true anecdote

Monument bank do a 7day notice account at 5.08%. Interest is paid monthly to wherever. £20k min on opening account and the £85k protection is in place.

Worth a thought if isa'd and sipped up.

[richbee]

Big difference when retired. Can get right into it without fripperies like earning.

Nice one on the seeds. Always a good time. We've got two dozen chilli plants started nicely.

Alright - don't rub it in
I'm being made redundant in September after 32 years, so trying to decide what to do then - I'm not quite financially ready to retire, but not that far off - so hoping to do something part time that will fill the gap, but allow me time to do more of what I enjoy

When we used to chat offshore, the dream job was nightshift shelf stacker at tesco! A lot of the guys I worked with who were made redundant ended up driving supermarket home delivery vans for real! I never wanted a post offshore job as i don't play well with others, in particular fools. So saved & invested accordingly based on the 4% rule. I can say that we live a happy life on surprisingly less than we'd have thought.

I had no confidence in the state or its pension so planned as if it wouldn't be there when I got there. Look what happened! Still not rubbing it in! Just a true anecdote

Monument bank do a 7day notice account at 5.08%. Interest is paid monthly to wherever. £20k min on opening account and the £85k protection is in place.

Worth a thought if isa'd and sipped up.

Glad it's working well for you - Long may it continue. That's always the concern, how much do you actually need to live comfortably, allowing for sudden expenditure and investment downturns - and the temptation to always need to put away just that bit more & keep working, rather than retiring and enjoying yourself.
I've been stuffing as much as possible into my workplace pension for the last few years - and good to see the investments doing well this year, after a couple of dodgy years.
That's a good rate - not sure how long those rates will be around for - I've got a couple of ISA / savings accounts online with Marcus at 4.75%, which isn't far off. I'm currently putting spare cash into my ASHP fund, ready for the arrival, hopefully in summer.

[Joeboy]

The 4% rule is your friend. Add up all your investments & cash and see what 4% of that figure pa is. If its greater than your anticipated outgoings post retirement pa its looking good.

Its a handy wee thought process and accurate.

[Krill]

One addendum to the 4% rule though is that's it can be awkward for those people with occupational pensions eg NHS pensions etc but the point h9lds even there.

[Joeboy]

One addendum to the 4% rule though is that's it can be awkward for those people with occupational pensions eg NHS pensions etc but the point h9lds even there.

Is it not known what the lumpsum is on NHS pensions? I honestly have no awareness of them. Assuming and this can be dodgy to do especially in something like this. No annuity, drawdown only?

I absolutely recoiled in horror when I looked into annuity, survivor percentage then poof, all gone. I went for a couple of SIPP's instead and rolled my company pensions into them. One is shares exclusively while the other is fund exclusively with Vanguard. Gotta say, the Vanguard kicks ass as a lowcost growth vehicle. Might just be my poor stock picks though!

We are now dancing the line to see how far down the road we can kick SIPP access. I reckon 5 years but could be more, could have tapped in Jan past at 55. I've always enjoyed playing financial games.

[Krill]

NHS pensions (and other public sector pensions) are complicated by the McCloud judgement as well, which means that most people will be in multiple pension schemes.

Some have lump sums, some don't, some you can choose to give up the some of the yearly amount for a lump sum. Most of then are calculated as a yearly amount ie like an annuity, paid monthly, which are index linked. Most of them are defined benefit schemes though so no need to buy an annuity.

It's quite normal for someone to retire from tue NHS and be entitled to over £20,000/year for life, index linked, 50% to a surviving spouse etc, (Edit: Plus £100K lump sum, at age 55 but most have to do it at age 60) it can be challenging to work out what one is entitled to decades ahead of time.

[Joeboy]

NHS pensions (and other public sector pensions) are complicated by the McCloud judgement as well, which means that most people will be in multiple pension schemes.

Some have lump sums, some don't, some you can choose to give up the some of the yearly amount for a lump sum. Most of then are calculated as a yearly amount ie like an annuity, paid monthly, which are index linked. Most of them are defined benefit schemes though so no need to buy an annuity.

It's quite normal for someone to retire from tue NHS and be entitled to over £20,000/year for life, index linked, 50% to a surviving spouse etc, but it can be challenging to work out what one is entitled to decades ahead of time.

Oh OK. . I bought a book "pension magic" I think. It was one in a series of finance books I consumed from tax cafe, notepad at my side back in the day. I'd suggest that it's a worthwhile read for anyone looking down the road.

https://www.taxcafe.co.uk/pensionmagic.html

[richbee]

The 4% rule is your friend. Add up all your investments & cash and see what 4% of that figure pa is. If its greater than your anticipated outgoings post retirement pa its looking good.

Its a handy wee thought process and accurate.

I have heard of that rule and it does seem to make sense - but I also heard that it was originally designed for retiring at 65 rather than 55, so maybe slightly less likely to work in worst case scenarios if you are looking at maybe 40 years of drawdown from it.
If the investments keep going up the way they have recently (+10% in 5 months), it might be do-able including the ~1 year of redundancy money I will get - I've been aiming at 60 as my retirement date for a good few years now.
Having said that, my other half is 6 years younger and would be mightily annoyed if I retired while she was still miles away from it - although she has suggested that if I actually get all the household DIY jobs / decorating / garden plans done & take on the house cleaning as well, she might go for it

[Joeboy]

The 4% rule can be looked at a couple of ways. Live off the 4% or live off the 4% + a set depletion rate on the principal. It is a handy way to see how near or far an individual is but its only a focus tool.

That pension magic book made a huge difference to me. It paid for itself before i'd finished the first chapter and it went on to save me huge sums. The main thing was really getting a fix on what a FA is and then from there looking at the multiple AMC's chopped up and disguised with other 3 letter acronyms or as in the old days full on front loaded funds up to 5%. Absolutely mental but where do we think the FA will steer us?

My best was sitting on a hotel bed in Macau Brazil reading that book cover to cover then reading it again with notepad. I went offshore, did my trip, came home and ripped all my pensions away from the providers and SIPP'd the lot. I then had a refining process where i split into two SIPP's but that is another story.

the AMC thing niggled at me so when I got back I looked up all my funds and that in itself took a bit of doing. 'They' dont want you to be doing this, 'they' want you to sit still and take the reduced return while they take a whack off the top. Anyway, my worst offender was a BRIC nation fund with i think Standard life. It was charging me 2.75%, makes me want to puke even now thinking of that.

Lets say i've got £100k in it . Before I turn a coin they'll take £2,750 in fees from me. If I run the same money in Vanguard S&P 500 ETF with 0.04% AMC, I will pay £40 in fees. Imagine the compounding effects of that over a decade or multiple decades for the younger fella's?

This is worth a look.
https://engaging-data.com/visualizing-4-rule/

[Krill]

The 4% rule is your friend. Add up all your investments & cash and see what 4% of that figure pa is. If its greater than your anticipated outgoings post retirement pa its looking good.

Its a handy wee thought process and accurate.

I have heard of that rule and it does seem to make sense - but I also heard that it was originally designed for retiring at 65 rather than 55, so maybe slightly less likely to work in worst case scenarios if you are looking at maybe 40 years of drawdown from it.
If the investments keep going up the way they have recently (+10% in 5 months), it might be do-able including the ~1 year of redundancy money I will get - I've been aiming at 60 as my retirement date for a good few years now.
Having said that, my other half is 6 years younger and would be mightily annoyed if I retired while she was still miles away from it - although she has suggested that if I actually get all the household DIY jobs / decorating / garden plans done & take on the house cleaning as well, she might go for it

Rich, first of all, sorry to hear about the redundancy.

Secondly, I can speak from family experience that one parent retired a decade ahead of the other, and had to do housework etc to make up for it. I'm not going to say it was straightforward, the retiree is a lazy so and so at the best of times when it comes to household chores and cooking etc but it's definitely worth looking at.

Joeboy, thanks for all the links, I'll be taking a look at them this weekend.