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Will I be able to retire in 12 years?

Including Financial Independence and Retiring Early (FIRE)
newguy
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Will I be able to retire in 12 years?

#475282

Postby newguy » January 22nd, 2022, 10:44 am

Last year I posted here asking Will I be able to retire in 13 years? You can see that post here - viewtopic.php?t=27701

I got some excellent advice. It has not quite been a year but as I just got my mortgage statement, I thought it would be interesting to see what has changed since the last time I posted.

Here's what the picture looked like in 2021. Sorry folks I tried to use a table but it didn't work!

Pension Pot £246K
ISA - £18K
Premium Bonds £15K

House Price Estimate £300K
Outstanding Mortgage £119K

Net Wealth including House Price minus Mortgage £460K

Salary £50K
Total Monthly Pension Contribution is £1400


Here's what things look like today.

Pension Pot £264,590
ISA - £28,086
Premium Bonds £3,000

House Price Estimate £315,000
Outstanding Mortgage £108,000

Net Wealth including House Price minus Mortgage £502,676

Salary £50K
Total Monthly Pension Contribution is £2100

According to my figures my net worth has gone up by £42,676. I am really not sure here if it’s a good plan including the house price in this figure, as you can see my house price has gone up by £15,000 but I really do not know how accurate this is.
To make things easier, a year ago my financial assets (Pension, ISA and premium bonds) were £279,000 and today they are £295,676 meaning that my financial assets have gone up by just £16,676. It currently feels that this has not gone up enough in value in the last year to allow me to be able to retire in 12 years. It was going to be tight but I don’t think the last year has helped that much.

The other things of note in the last year is that I moved most of my premium bonds to my Investment Trusts which are held in an ISA.
I also decided to focus on putting away most of my money through my pension plan to get the tax relief. I realise at some point I will need a lot more money outside my pension plan, but I figured the chancellor will sooner or later reduce the tax relief and I should make use of it whilst I can.
I also paid down the mortgage

I would be really interested in hearing anybody thoughts of how things have gone for me?
Thanks in advance.

Newguy

PS I am dyslexic so hopefully this post make sense!

tjh290633
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Re: Will I be able to retire in 12 years?

#475289

Postby tjh290633 » January 22nd, 2022, 11:24 am

newguy wrote: I tried to use a table but it didn't work!

The simplest way that I find is to put it in a spreadsheet, then copy the data using CTRL-C/CTRL-V into the utility which you will find at http://lemonfoolfinancialsoftware.weebl ... ormat.html

I use the [pre] option with 3 spaces between fields, but you can try out the others if you wish to see which you prefer.

TJH

AsleepInYorkshire
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Re: Will I be able to retire in 12 years?

#475301

Postby AsleepInYorkshire » January 22nd, 2022, 11:59 am

Are you planning to sell your home on retirement and down size to release some equity?

What funds are you invested in? Are you happy they are giving you good returns?

Is it worth using your ISA to pay down on your mortgage?

Do you think you're putting enough into your pension to maximise your tax position?

AiY(D)

newguy
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Re: Will I be able to retire in 12 years?

#475303

Postby newguy » January 22nd, 2022, 12:04 pm

tjh290633 wrote:
newguy wrote: I tried to use a table but it didn't work!

The simplest way that I find is to put it in a spreadsheet, then copy the data using CTRL-C/CTRL-V into the utility which you will find at http://lemonfoolfinancialsoftware.weebl ... ormat.html

I use the [pre] option with 3 spaces between fields, but you can try out the others if you wish to see which you prefer.

TJH


Thank you for that. I will bear that in mind in the future.

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Re: Will I be able to retire in 12 years?

#475306

Postby newguy » January 22nd, 2022, 12:23 pm

AsleepInYorkshire wrote:Are you planning to sell your home on retirement and down size to release some equity?

What funds are you invested in? Are you happy they are giving you good returns?

Is it worth using your ISA to pay down on your mortgage?

Do you think you're putting enough into your pension to maximise your tax position?

AiY(D)



Hi AsleepInYorkshire

Thanks for your questions

My current house is not my forever home but when the time comes to move I doubt I will be able to downsize. However, I am single and don't have any dependents, so some kind of equity release scheme at is probably highly likely.

My ISA is made up of the following Investment Trusts:-

AVI Global Trust PLC
Baillie Gifford China Growth
JP Morgan Japan Smaller Companies
Templeton Emerging Markets
Edinburgh Worldwide
Worldwide Healthcare

My pension plan is made up of the following funds

Vanguard FTSE Developed Work ex UK Pension Fund
Vanguard FTSE UK All Share Index Pension Fund
iShares Emerging Markets Equity Index Pension Fund
St Ballie Gifford Managed Pension Fund
Fidlity Global Special Situations Pension Fund
Fidlity Special Situations Pension Fund


I think it would be safe to say that my investments are high risk investments. Edinburgh Worldwide hasn't been great in the last year but I think I probably need to take a longer term view on it. Likewise the Emerging Marks iShares fund hasn't performed that well.

My mortgage rate is currently 2.49% for another 5 years. My view is that my investment trust should outperform this and I don't think it sensible paying off more of the mortgage at this point.

Realistically, I could pay in an extra £250 pounds into my pension plan each month but my plan is to use this to pay into my investment trusts. There really is no more extra money available.

Newguy

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Re: Will I be able to retire in 12 years?

#475310

Postby Boots » January 22nd, 2022, 12:35 pm

Well, you definitely seem to be going in the right direction.

Personally I always excluded the value of my house from such calculations - I felt I would struggle to downsize and free up capital when the time came. Such a move might happen naturally, and that would be a nice bonus, but I didn't want to plan on it. I regarded the notional value locked up in my home was just a fact of life.

You don't say how old you are, just that you hope to retire in 12 years. Your age may be relevant when considering how reliant you are on your pension plan - they are very tax efficient, but there are restrictions on when, and how, they can be drawn. Update - I see from last year's post you were 42. The increase in normal minimum pension age to 57 is due in 2028, when I calculate you will be 49. So, on the face of it, with a reliance on pension investment it doesn't look likely you would be able to retire at 55, just because they won't let you draw that pension. You may well be able to build up some other assets to tide you over those two years.

On the face of it, you might be starting to get a bit tight on an emergency fund. Generally people seem to recommend six month salary, but that might depend on how secure your employment is, and how buoyant the job market for your skillset is.

HTH

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Re: Will I be able to retire in 12 years?

#475319

Postby newguy » January 22nd, 2022, 1:16 pm

Boots wrote:Well, you definitely seem to be going in the right direction.

Personally I always excluded the value of my house from such calculations - I felt I would struggle to downsize and free up capital when the time came. Such a move might happen naturally, and that would be a nice bonus, but I didn't want to plan on it. I regarded the notional value locked up in my home was just a fact of life.

You don't say how old you are, just that you hope to retire in 12 years. Your age may be relevant when considering how reliant you are on your pension plan - they are very tax efficient, but there are restrictions on when, and how, they can be drawn. Update - I see from last year's post you were 42. The increase in normal minimum pension age to 57 is due in 2028, when I calculate you will be 49. So, on the face of it, with a reliance on pension investment it doesn't look likely you would be able to retire at 55, just because they won't let you draw that pension. You may well be able to build up some other assets to tide you over those two years.

On the face of it, you might be starting to get a bit tight on an emergency fund. Generally people seem to recommend six month salary, but that might depend on how secure your employment is, and how buoyant the job market for your skillset is.

HTH


Hi HTH
Thank you for your input

Your point about treating the property as a nice bonus is probably about right. I need to live somewhere. I may or may not be able to release some value at some point but i can't be certain of that at this point.

I am now 43 and the plan was to see if it was possible to retire at 55. If i was to retire at 55 I would need some money outside the pension to be able to get me through to 57. I really do want to start saving more into my ISA but at this point, I would rather save the money into the pension as I'm a high rate tax payer and I get tax relief.

Previously I considered my Premium Bonds my emergency fund. I have transferred a big portion of that into my Investment Trust ISA and I do consider that my emergency funds. I realise trust can go up and down but given the amount in there, I think it's a fair fund. I feel quite secure in my job at present.

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Re: Will I be able to retire in 12 years?

#475323

Postby Boots » January 22nd, 2022, 1:46 pm

newguy wrote:
I am now 43 and the plan was to see if it was possible to retire at 55. If i was to retire at 55 I would need some money outside the pension to be able to get me through to 57. I really do want to start saving more into my ISA but at this point, I would rather save the money into the pension as I'm a high rate tax payer and I get tax relief.



Your risk profile may rule this out, but you could consider VCTs as an addition to your pension contributions. Their tax rebates are 30%, so not as good as pension relief at Higher Rate, but better than pension relief at Basic Rate. They are more flexible than pensions, in that there are no rules on an age when you can take income (once you have held them five years). There is also no tax due on income paid, unlike a pension. But, they are highly risky and should be treated with caution.

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Re: Will I be able to retire in 12 years?

#475329

Postby newguy » January 22nd, 2022, 2:34 pm

Boots wrote:
newguy wrote:
I am now 43 and the plan was to see if it was possible to retire at 55. If i was to retire at 55 I would need some money outside the pension to be able to get me through to 57. I really do want to start saving more into my ISA but at this point, I would rather save the money into the pension as I'm a high rate tax payer and I get tax relief.



Your risk profile may rule this out, but you could consider VCTs as an addition to your pension contributions. Their tax rebates are 30%, so not as good as pension relief at Higher Rate, but better than pension relief at Basic Rate. They are more flexible than pensions, in that there are no rules on an age when you can take income (once you have held them five years). There is also no tax due on income paid, unlike a pension. But, they are highly risky and should be treated with caution.


Hi
Thanks again for your help.

I really don't know anything about VCTs and it feels like they are very much out of my comfort zone.

The investments i currently have are probably at the top of the risk curve that I would like to accept.

I will have a look at a few VCTs just really for information. Is there any particular VCTs that are recommended?

Harvey

AsleepInYorkshire
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Re: Will I be able to retire in 12 years?

#475331

Postby AsleepInYorkshire » January 22nd, 2022, 2:42 pm

Can I just check please - is the £2.1K going into your pension a net amount you contribute or is it the amount including tax rebate and employers contributions please?

The purpose for asking is I'd like to run some numbers which may be of some help.

AiY(D)

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Re: Will I be able to retire in 12 years?

#475335

Postby newguy » January 22nd, 2022, 2:46 pm

AsleepInYorkshire wrote:Can I just check please - is the £2.1K going into your pension a net amount you contribute or is it the amount including tax rebate and employers contributions please?

The purpose for asking is I'd like to run some numbers which may be of some help.

AiY(D)


Many thanks AiY

It's the full amount that Standard Life show as the monthly contribution - the full amount.

Newguy

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Re: Will I be able to retire in 12 years?

#475346

Postby AsleepInYorkshire » January 22nd, 2022, 3:38 pm

Hi Newguy,

You're doing extremely well so far. My question regarding what funds you are in was rhetorical - sorry I should have made that more clear. I can't and won't tell you what funds to buy. The amount of risk we each take is a personal choice. My question (which failed miserably) was merely to focus you on your funds and to suggest keep up to date with them.

That aside may I point out that you're not paying high rate tax as this starts at £50,270. However, as you've rightly pointed out there is still a 20% rebate from HMRC which is certainly worth having.

I have a very slightly different view about how you fill the gap between 55 and 57. Compound interest is at the back of my thoughts. If you put more into your pension now (and thus get 20% rebates) the fund will grow more quickly. You may think it isn't much but by the time you're 67 and state pension kicks in your 12 years of additional 20% from HMRC will have compounded quite well.

There are two examples below of projections for a pension fund based on £2.1K per month investment. The first shows direct line growth of 6%. The second 8%. I've shown a 4% drawn down at age 57 and full tax free withdrawal of 25% at the same age.

Have you considered that it would be more efficient to put money needed to live for those two years into an cash ISA much nearer to the time and in the meantime exploit the pension rebate more now? If you leave the £28K in the ISA and don't add to it, then by your age 55 and at 6% growth it will be worth £60K which (outwith inflation here to then) should cover you monthly needs as it will be £2.5K per month. As you approach 55 you can also tinker with cash savings to tide you over the 2 year gap, bearing in mind you will have access to cash at age 57 through your pension.

At 6% growth and a full tax free withdrawal and the need for (say) £2.5K per month you will have 6-7 years before you need to take anything from the equity again. I suggest a 25% tax free withdrawal but there are other options available which may be more suitable to your needs.

Best

AiY(D)

Newguy									
Year Age No Op Bal Contr Total Draw Growth Total Tax Free Cash

1980 2.10 4.00% 6.00% 25.00%
2022 42 1 265.0 2.1 267.1 0 16.0 283.1 0.0
2023 43 2 283.1 2.1 285.2 0 17.1 302.3 0.0
2024 44 3 302.3 2.1 304.4 0 18.3 322.7 0.0
2025 45 4 322.7 2.1 324.8 0 19.5 344.3 0.0
2026 46 5 344.3 2.1 346.4 0 20.8 367.2 0.0
2027 47 6 367.2 2.1 369.3 0 22.2 391.4 0.0
2028 48 7 391.4 2.1 393.5 0 23.6 417.1 0.0
2029 49 8 417.1 2.1 419.2 0 25.2 444.4 0.0
2030 50 9 444.4 2.1 446.5 0 26.8 473.3 0.0
2031 51 10 473.3 2.1 475.4 0 28.5 503.9 0.0
2032 52 11 503.9 2.1 506.0 0 30.4 536.4 0.0
2033 53 12 536.4 2.1 538.5 0 32.3 570.8 0.0
2034 54 13 570.8 2.1 572.9 0 34.4 607.3 0.0
2035 55 14 607.3 2.1 609.4 0 36.6 645.9 0.0
2036 56 15 645.9 2.1 648.0 0 38.9 686.9 0.0
2037 57 16 686.9 2.1 689.0 (27.6) 39.7 701.1 175.3
2038 58 17 525.8 0.0 525.8 (21.0) 30.3 535.1 0.0
2039 59 18 535.1 0.0 535.1 (21.4) 30.8 544.5 0.0
2040 60 19 544.5 0.0 544.5 (21.8) 31.4 554.1 0.0
2041 61 20 554.1 0.0 554.1 (22.2) 31.9 563.9 0.0
2042 62 21 563.9 0.0 563.9 (22.6) 32.5 573.8 0.0
2043 63 22 573.8 0.0 573.8 (23.0) 33.0 583.9 0.0
2044 64 23 583.9 0.0 583.9 (23.4) 33.6 594.2 0.0
2045 65 24 594.2 0.0 594.2 (23.8) 34.2 604.6 0.0
2046 66 25 604.6 0.0 604.6 (24.2) 34.8 615.2 0.0
2047 67 26 615.2 0.0 615.2 (24.6) 35.4 626.1 0.0
2048 68 27 626.1 0.0 626.1 (25.0) 36.1 637.1 0.0
2049 69 28 637.1 0.0 637.1 (25.5) 36.7 648.3 0.0
33.6 637.1 (305.9) 830.9 648.3


Newguy									
Year Age No Op Bal Contr Total Draw Growth Total Tax Free Cash

1980 2.10 4.00% 8.00% 25.00%
2022 42 1 265.0 2.1 267.1 0 21.4 288.5 0.0
2023 43 2 288.5 2.1 290.6 0 23.2 313.8 0.0
2024 44 3 313.8 2.1 315.9 0 25.3 341.2 0.0
2025 45 4 341.2 2.1 343.3 0 27.5 370.7 0.0
2026 46 5 370.7 2.1 372.8 0 29.8 402.7 0.0
2027 47 6 402.7 2.1 404.8 0 32.4 437.2 0.0
2028 48 7 437.2 2.1 439.3 0 35.1 474.4 0.0
2029 49 8 474.4 2.1 476.5 0 38.1 514.6 0.0
2030 50 9 514.6 2.1 516.7 0 41.3 558.1 0.0
2031 51 10 558.1 2.1 560.2 0 44.8 605.0 0.0
2032 52 11 605.0 2.1 607.1 0 48.6 655.6 0.0
2033 53 12 655.6 2.1 657.7 0 52.6 710.4 0.0
2034 54 13 710.4 2.1 712.5 0 57.0 769.5 0.0
2035 55 14 769.5 2.1 771.6 0 61.7 833.3 0.0
2036 56 15 833.3 2.1 835.4 0 66.8 902.2 0.0
2037 57 16 902.2 2.1 904.3 (36.2) 69.5 937.6 234.4
2038 58 17 703.2 0.0 703.2 (28.1) 54.0 729.1 0.0
2039 59 18 729.1 0.0 729.1 (29.2) 56.0 755.9 0.0
2040 60 19 755.9 0.0 755.9 (30.2) 58.1 783.7 0.0
2041 61 20 783.7 0.0 783.7 (31.3) 60.2 812.6 0.0
2042 62 21 812.6 0.0 812.6 (32.5) 62.4 842.5 0.0
2043 63 22 842.5 0.0 842.5 (33.7) 64.7 873.5 0.0
2044 64 23 873.5 0.0 873.5 (34.9) 67.1 905.6 0.0
2045 65 24 905.6 0.0 905.6 (36.2) 69.6 938.9 0.0
2046 66 25 938.9 0.0 938.9 (37.6) 72.1 973.5 0.0
2047 67 26 973.5 0.0 973.5 (38.9) 74.8 1,009.3 0.0
2048 68 27 1,009.3 0.0 1,009.3 (40.4) 77.5 1,046.4 0.0
2049 69 28 1,046.4 0.0 1,046.4 (41.9) 80.4 1,085.0 0.0
33.6 1,046.4 (451.1) 1,471.9 1,085.0

vand
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Re: Will I be able to retire in 12 years?

#475432

Postby vand » January 22nd, 2022, 8:51 pm

As others have commented, you're doing very well, and I think well on course to retire within your desired timeframe.

Your invested assets have built up to a point now where you really start to notice the increases just from internal compounding alone, at least in reasonable years.

You have a liquid net worth of about £290k which itself should roughly double or better over 12 years in real terms, and then you'll be adding £300k along the way, which itself should growth by a healthy amount, so should be knocking on the door of 7 figures - easily enough to sustain the income you require.

I don't know what weightings you have in your portfolio, but you seem to hold a lot of riskier and more specialised funds in sectors that have struggled over the last year, which may be why you haven't seen much internal growth, but if that's your strategy it's fine. I have quite of lot of similar macro style plays myself.

AsleepinYorkshire, I think you have put in 2.1k annual contribution in your tables above, the OP is contributing that as a monthly number.

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Re: Will I be able to retire in 12 years?

#475438

Postby Kantwebefriends » January 22nd, 2022, 9:36 pm

newguy wrote: I would rather save the money into the pension as I'm a high rate tax payer and I get tax relief.


On a 50k salary: are you sure? Or do you live in Scotland with a lower threshold?

I always used to try to avoid higher rate tax altogether. In your shoes I might shift a bit of money from ISA to SIPP and then when I renew the mortgage perhaps increase the loan enough that I would have cash with which to fill the SIPP and restore the ISAs, if SIPPs and ISAs are still such bargains. I'd certainly be looking to maximise my SIPP while 40% relief remains available.

Talking about the mortgage; could it conceivably be worth your while remortgaging now before interest rate increase by much? Could it be worth taking any penalty on the chin, to be paid from the somewhat larger loan? It might also give you a more comfortable emergency cash reserve.

On the whole it's likely to be a good idea to have a fixed rate loan with a low interest rate if inflation is going to be high for a few years.

newguy
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Re: Will I be able to retire in 12 years?

#475485

Postby newguy » January 23rd, 2022, 8:24 am

Thanks AiY - greatly appreciated.

Actually, as I was writing down the funds I was looking at their performance over the last year so it was a very good exercise.

Sorry for any confusion my salary is actually £52968 and I live in Scotland so I am definitely a high rate tax payer.

Thanks for creating that spreadsheet for me it is very helpful and I am going to spend some time playing with it later on today.

On the face of things, everything seems to be heading in the right direction, so why am i still worried. Well I think its fair to say that I am a natural worrier but my concerns are:-

1. I am a high rate tax pay and getting the high rate tax relief at the moment. I am convinced that the chancellor at some point will take this away and when he/she does this will have a major impact on my ability to save for my retirement.

2. My Mortgage will not be repaid until 2037 when I am 57, so I am potentially going to need to fund this for two years in retirement.

3. My current car is a 1998 MX5 and its been great so far. I hardly do any driving and it's been fine for me. At some point this clearly will need to be replaced and again this reduces what I can save for the mortgage.

4. Inflation risks over the next few years

I think the spreadsheet that you have done for me is the optimistic spreadsheet. I think I need to try and work out what the pessimistic version would look like. If 1, 3 and 4 happened, I need to try and figure out what my monthly saving amount would be reduced to.

Newguy

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Re: Will I be able to retire in 12 years?

#475488

Postby newguy » January 23rd, 2022, 8:33 am

vand wrote:As others have commented, you're doing very well, and I think well on course to retire within your desired timeframe.

Your invested assets have built up to a point now where you really start to notice the increases just from internal compounding alone, at least in reasonable years.

You have a liquid net worth of about £290k which itself should roughly double or better over 12 years in real terms, and then you'll be adding £300k along the way, which itself should growth by a healthy amount, so should be knocking on the door of 7 figures - easily enough to sustain the income you require.

I don't know what weightings you have in your portfolio, but you seem to hold a lot of riskier and more specialised funds in sectors that have struggled over the last year, which may be why you haven't seen much internal growth, but if that's your strategy it's fine. I have quite of lot of similar macro style plays myself.

AsleepinYorkshire, I think you have put in 2.1k annual contribution in your tables above, the OP is contributing that as a monthly number.


Hi Vand thanks for your help.

I think I am happy enough with the weightings of my actual pension fund. A few years back the company that I worked for paid for a pension consultant to advise on the fund make up. Yes it's a very much riskier portfolio at present, as I was hoping for greater rewards over the next few years.

I think its fair to say my ISA funds are an eclectic bunch of funds. I am solely responsible for my ISA picks. They were all bought in equal amounts and of course some of them have done a lot better than others.

Newguy

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Re: Will I be able to retire in 12 years?

#475491

Postby onslow » January 23rd, 2022, 8:55 am

newguy wrote:
Hi
Thanks again for your help.

I really don't know anything about VCTs and it feels like they are very much out of my comfort zone.

The investments i currently have are probably at the top of the risk curve that I would like to accept.

I will have a look at a few VCTs just really for information. Is there any particular VCTs that are recommended?

Harvey


I'm same age as you and initially too thought VCTs were just too risky, however 5 years ago did some research and concluded that a) they are an excellent way to get steady, tax free income, b) great way to get exposure to private(and some smaller public) companies overseen by good managers with an excellent track record.

Have a look at the VCT board here on lemon fool, some regulars post there with long experience of the sector. The world of VCTs changes with government introducing different rules etc but some VCTs with good history includes those from Albion, Mobeus and Unicorn.

VCTs are just over 10% of my net worth, capital growth has not been as high as it used to be although the total return is good with lots of dividends/special dividends recently. VCTs are just shares though, so the prices are correlated to the broader markets. I invested in VCTs as I was maximising my pension allowance, however as mentioned I also think they are a good general diversifier, most offer dividend reinvestment and could be a nice little earner between retiring and getting access to your pension

And yes, getting 30% back of what you invest from HMRC is a huge benefit - you'll need to keep the VCTs for 5 years though

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Re: Will I be able to retire in 12 years?

#475496

Postby newguy » January 23rd, 2022, 9:26 am

Kantwebefriends wrote:
newguy wrote: I would rather save the money into the pension as I'm a high rate tax payer and I get tax relief.


On a 50k salary: are you sure? Or do you live in Scotland with a lower threshold?

I always used to try to avoid higher rate tax altogether. In your shoes I might shift a bit of money from ISA to SIPP and then when I renew the mortgage perhaps increase the loan enough that I would have cash with which to fill the SIPP and restore the ISAs, if SIPPs and ISAs are still such bargains. I'd certainly be looking to maximise my SIPP while 40% relief remains available.

Talking about the mortgage; could it conceivably be worth your while remortgaging now before interest rate increase by much? Could it be worth taking any penalty on the chin, to be paid from the somewhat larger loan? It might also give you a more comfortable emergency cash reserve.

On the whole it's likely to be a good idea to have a fixed rate loan with a low interest rate if inflation is going to be high for a few years.


Hi Kantwebefriends

Sorry my salary is actually £52968 and I do live in scotland.

Currently my mortgage to August 2037 which is two years after my 55 birthday and I am playing in about £717 per month at a rate of 2.49%

Having a quick look at a mortgage calculator and assuming I get the same rate of 2.49% I can see that if I increase my mortgage payment to £989 per month and increase of £271 I can reduce the term of my mortgage by 2 years to when I retire and also get an additional £15K.

I wouldn't be able to remortgage to June of this year as i have hight exit fees at present.

The real question that I would need to consider is whether having £15K for 12 years worth of compounding would be worth the risk of interest rates going through the roof later on.

Worth thinking about it. Thank you
Newguy

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Re: Will I be able to retire in 12 years?

#475503

Postby newguy » January 23rd, 2022, 10:13 am

Hi guys

I don't think AiY table was quite right and to be honest I am not sure if mine is right either but using AiY as a basis here is what i have come up with.


Code: Select all

     |     |    |                 | Monthly Contributions |     £2,100 |         |         |            |             
     |     |    |                 | Drawdown              |         4% |         |         |            |             
     |     |    |                 | Growth                |         6% |         |         |            |             
     |     |    |                 |                       |            |         |         |            |             
     |     |    |                 |                       |            |         |         |            |             
Year | Age | No | Opening Balance | Yearly Contributions  | Total      | Draw    | Growth  | Total      | Tax Free Cash
2022 |  43 |  1 |        £295,676 |               £25,200 |   £320,876 |         | £19,253 |   £340,129 |             
2023 |  44 |  2 |        £340,129 |               £25,200 |   £365,329 |         | £21,920 |   £387,248 |             
2024 |  45 |  3 |        £387,248 |               £25,200 |   £412,448 |         | £24,747 |   £437,195 |             
2025 |  46 |  4 |        £437,195 |               £25,200 |   £462,395 |         | £27,744 |   £490,139 |             
2026 |  47 |  5 |        £490,139 |               £25,200 |   £515,339 |         | £30,920 |   £546,259 |             
2027 |  48 |  6 |        £546,259 |               £25,200 |   £571,459 |         | £34,288 |   £605,747 |             
2028 |  49 |  7 |        £605,747 |               £25,200 |   £630,947 |         | £37,857 |   £668,804 |             
2029 |  50 |  8 |        £668,804 |               £25,200 |   £694,004 |         | £41,640 |   £735,644 |             
2030 |  51 |  9 |        £735,644 |               £25,200 |   £760,844 |         | £45,651 |   £806,494 |             
2031 |  52 | 10 |        £806,494 |               £25,200 |   £831,694 |         | £49,902 |   £881,596 |             
2032 |  53 | 11 |        £881,596 |               £25,200 |   £906,796 |         | £54,408 |   £961,204 |             
2033 |  54 | 12 |        £961,204 |               £25,200 |   £986,404 |         | £59,184 | £1,045,588 |             
2034 |  55 | 13 |      £1,045,588 |                    £0 | £1,045,588 | £41,824 | £62,735 | £1,066,500 |             
2035 |  56 | 14 |      £1,066,500 |                    £0 | £1,066,500 | £42,660 | £63,990 | £1,087,830 |             
2036 |  57 | 15 |      £1,087,830 |                    £0 | £1,087,830 | £43,513 | £65,270 | £1,109,586 |             
2037 |  58 | 16 |      £1,109,586 |                    £0 | £1,109,586 | £44,383 | £66,575 | £1,131,778 |             
2038 |  59 | 17 |      £1,131,778 |                    £0 | £1,131,778 | £45,271 | £67,907 | £1,154,414 |             
2039 |  60 | 18 |      £1,154,414 |                    £0 | £1,154,414 | £46,177 | £69,265 | £1,177,502 |             
2040 |  61 | 19 |      £1,177,502 |                    £0 | £1,177,502 | £47,100 | £70,650 | £1,201,052 |             
2041 |  62 | 20 |      £1,201,052 |                    £0 | £1,201,052 | £48,042 | £72,063 | £1,225,073 |             
2042 |  63 | 21 |      £1,225,073 |                    £0 | £1,225,073 | £49,003 | £73,504 | £1,249,575 |             
2043 |  64 | 22 |      £1,249,575 |                    £0 | £1,249,575 | £49,983 | £74,974 | £1,274,566 |             
2044 |  65 | 23 |      £1,274,566 |                    £0 | £1,274,566 | £50,983 | £76,474 | £1,300,057 |             
2045 |  66 | 24 |      £1,300,057 |                    £0 | £1,300,057 | £52,002 | £78,003 | £1,326,058 |             
2046 |  67 | 25 |      £1,326,058 |                    £0 | £1,326,058 | £53,042 | £79,564 | £1,352,580 |             
2047 |  68 | 26 |      £1,352,580 |                    £0 | £1,352,580 | £54,103 | £81,155 | £1,379,631 |             
2048 |  69 | 27 |      £1,379,631 |                    £0 | £1,379,631 | £55,185 | £82,778 | £1,407,224 |             
2049 |  70 | 28 |      £1,407,224 |                    £0 | £1,407,224 | £56,289 | £84,433 | £1,435,368 |             
   


Firstly, I am really not sure if it is a great idea adding the growth rate on the contributions. I think it maybe sensible to only do the growth rate on the opening balance. Does anybody have a view?

Now according to my table the growth rate should be around £19K this year. Well given that my assets only went up by about £17K last year that does seem like a bit of a stretch. However, looking at my pension contributions in the last year I didn't contribute as much as I am planning to do this year. Hopefully this will be the turning point.

Please can I ask does my table look right?

Thanks
Newguy

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Re: Will I be able to retire in 12 years?

#475505

Postby kempiejon » January 23rd, 2022, 10:20 am

I have my own spreadsheets but mostly use them for capturing historic data rather than modelling.
For running the numbers and various scenarios into the future I've used web calculators currently would prefer https://www.firecalc.com/
It took me a few goes to grasp all the features. You add you current worth, expected contributions and future expenditure and it'll turn out multiple iterations.


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