FIRE starts in two weeks
Posted: July 13th, 2019, 12:28 pm
Dear All
Like Pheidippides, I’m now approaching the time to light the blue touchpaper. I expect to hand my notice in to my boss in 10 days’ time.
Facts:
Age: 54; Wife 51
Working years: will be 35 years, of which 34 will count towards state pension
SIPP: £1.055m
ISA: £162K
Share account: £78K
Cash savings: £100K (primarily intended as safety buffer)
DB pension: roughly £212K in value (calculated on basis of 20x the deferred annual benefit), realisable at age 60, or earlier if I’m prepared to take a discount
Current annualised income from the above £64K, excluding the DB
Anticipated annual withdrawal for 2020 is £50-55K, exact amount depending on whether I do any paid work from next year on
No mortgage on main property
BTL mortgage of £144K; £8K net income which goes to my wife
3 kids whose education is taken care of though boomerang option is highly likely!
In terms of my investment philosophy and detailed holdings, I refer readers to links in an earlier post here. These are possibly informative for those in the ‘growth’ phase of their financial life-cycle.
viewtopic.php?f=56&t=13689&p=166292#p166292
In terms of asset allocation, I break it down here; I include DB pension value for completeness – I treat the income from this as an index-linked gilt for asset allocation purposes. UK shares are selected and long-term held on a HYP basis. I am a regular reader of John Barron’s Portfolio service to which I subscribe and it is useful particularly for non-equity asset classes I’m not familiar with.
There will be some minor variances from the numbers below to the snapshot above, simply due to timing
Summary portfolio breakdown: capital value Value %
Asia Equities 75,368 5%
Property 99,170 6%
Infrastructure/leasing 114,651 7%
DB Pension 212,500 13%
Fixed Income 353,310 22%
Commodities/Mining 47,669 3%
Europe Equities 50,189 3%
US Equities 19,822 1%
UK Equities 267,558 17%
International Equities 106,110 7%
Private equity 66,068 4%
Renewables 56,858 4%
Cash 125,131 8%
Portfolio value 1,594,406
In terms of goals, my principal aims are as follows:
a) short term – next 12 months
-maximise cash savings in the remaining months of employment. This is to provide additional cash cushion/safety margin for the next five years
-analyse most tax-effective way to take pension benefits post 55, given I’ve now exceeded the LTA and will be the beneficiary of a DC as well as a DB pension. Note: I’ve investigated protecting this excess via HMRC rules but unfortunately it doesn’t work out for me for reasons to tedious to explain here.
-have a Pensionwise appointment before deciding whether I need professional advice. Having been burned in the past by so-called IFAs, I’m reluctant to pony up vast sums telling me what I already know.
-identify non-exec work or interesting unpaid opportunities. Whilst I’m not one of those sad males for whom work = their identity, I don’t hate my working life, enjoy the company of young bright people, and want to replicate these benefits - albeit on my own terms.
-confirm what, if any, voluntary NI payments need to be made in future to secure a full state pension
b) longer term – next 60 months
-transfer any shares & cash outside a tax wrapper into my/my wife’s ISA over next 2-4 years. Her pension at 55 will be worth an annual income of £18K or so, and she should qualify for a full state pension at 67.
-help pay towards my childrens’ higher education (a separate sum has already been set aside for fees)
-tackle the garden
The future: I’m not a believer in the R word i.e. ‘retirement’ – I will be using my spare time next year across a range of activities including charity and university trusteeships as well as paid and unpaid work, albeit on my terms, and more time for music and wine and when my wife steps back from work, some travel etc.
As Pheidippides said, huge kudos to TMF and LMF for all the advice without which I wouldn’t have had the courage to go solo and manage my own SIPP: the single best financial decision I have taken in my life.
Portfolio Performance
Organic growth on my portfolio has averaged at 11% over the past 9 years for my SIPP, and 13% on my ISA. I’m not claiming to be an investment genius: I’ve simply been lucky to ride the equity boom since 2008 and, not paying egregious advisor fees nor chase equity unicorns, to pocket all the growth in the process.
Last year performance to end May saw organic growth of 14% on the ISA, and 5% on the SIPP. Income on an annualised basis grew by 22%, reflecting a move in assets from equities to income bearing investment trusts, corporate bonds, renewables. If readers are interested in this, I’ll do a separate post on what each of these allocations comprise, probably over on the Portfolio review board. This post is long enough as it is!
Shelford
Like Pheidippides, I’m now approaching the time to light the blue touchpaper. I expect to hand my notice in to my boss in 10 days’ time.
Facts:
Age: 54; Wife 51
Working years: will be 35 years, of which 34 will count towards state pension
SIPP: £1.055m
ISA: £162K
Share account: £78K
Cash savings: £100K (primarily intended as safety buffer)
DB pension: roughly £212K in value (calculated on basis of 20x the deferred annual benefit), realisable at age 60, or earlier if I’m prepared to take a discount
Current annualised income from the above £64K, excluding the DB
Anticipated annual withdrawal for 2020 is £50-55K, exact amount depending on whether I do any paid work from next year on
No mortgage on main property
BTL mortgage of £144K; £8K net income which goes to my wife
3 kids whose education is taken care of though boomerang option is highly likely!
In terms of my investment philosophy and detailed holdings, I refer readers to links in an earlier post here. These are possibly informative for those in the ‘growth’ phase of their financial life-cycle.
viewtopic.php?f=56&t=13689&p=166292#p166292
In terms of asset allocation, I break it down here; I include DB pension value for completeness – I treat the income from this as an index-linked gilt for asset allocation purposes. UK shares are selected and long-term held on a HYP basis. I am a regular reader of John Barron’s Portfolio service to which I subscribe and it is useful particularly for non-equity asset classes I’m not familiar with.
There will be some minor variances from the numbers below to the snapshot above, simply due to timing
Summary portfolio breakdown: capital value Value %
Asia Equities 75,368 5%
Property 99,170 6%
Infrastructure/leasing 114,651 7%
DB Pension 212,500 13%
Fixed Income 353,310 22%
Commodities/Mining 47,669 3%
Europe Equities 50,189 3%
US Equities 19,822 1%
UK Equities 267,558 17%
International Equities 106,110 7%
Private equity 66,068 4%
Renewables 56,858 4%
Cash 125,131 8%
Portfolio value 1,594,406
In terms of goals, my principal aims are as follows:
a) short term – next 12 months
-maximise cash savings in the remaining months of employment. This is to provide additional cash cushion/safety margin for the next five years
-analyse most tax-effective way to take pension benefits post 55, given I’ve now exceeded the LTA and will be the beneficiary of a DC as well as a DB pension. Note: I’ve investigated protecting this excess via HMRC rules but unfortunately it doesn’t work out for me for reasons to tedious to explain here.
-have a Pensionwise appointment before deciding whether I need professional advice. Having been burned in the past by so-called IFAs, I’m reluctant to pony up vast sums telling me what I already know.
-identify non-exec work or interesting unpaid opportunities. Whilst I’m not one of those sad males for whom work = their identity, I don’t hate my working life, enjoy the company of young bright people, and want to replicate these benefits - albeit on my own terms.
-confirm what, if any, voluntary NI payments need to be made in future to secure a full state pension
b) longer term – next 60 months
-transfer any shares & cash outside a tax wrapper into my/my wife’s ISA over next 2-4 years. Her pension at 55 will be worth an annual income of £18K or so, and she should qualify for a full state pension at 67.
-help pay towards my childrens’ higher education (a separate sum has already been set aside for fees)
-tackle the garden
The future: I’m not a believer in the R word i.e. ‘retirement’ – I will be using my spare time next year across a range of activities including charity and university trusteeships as well as paid and unpaid work, albeit on my terms, and more time for music and wine and when my wife steps back from work, some travel etc.
As Pheidippides said, huge kudos to TMF and LMF for all the advice without which I wouldn’t have had the courage to go solo and manage my own SIPP: the single best financial decision I have taken in my life.
Portfolio Performance
Organic growth on my portfolio has averaged at 11% over the past 9 years for my SIPP, and 13% on my ISA. I’m not claiming to be an investment genius: I’ve simply been lucky to ride the equity boom since 2008 and, not paying egregious advisor fees nor chase equity unicorns, to pocket all the growth in the process.
Last year performance to end May saw organic growth of 14% on the ISA, and 5% on the SIPP. Income on an annualised basis grew by 22%, reflecting a move in assets from equities to income bearing investment trusts, corporate bonds, renewables. If readers are interested in this, I’ll do a separate post on what each of these allocations comprise, probably over on the Portfolio review board. This post is long enough as it is!
Shelford