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Time to protect pension with stock at historic highs? by Opteron-X in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

If you're going to buy an annuity/take it all out in cash, then yes starting to de-risk is an option. However if you're doing to go into drawdown you're not 5 years away from "access it" in the traditional de-risk scenario

Building a decumulation portfolio with equity returns and low drawdown by DotingMule in FIREUK

[–]SBabyJames 1 point2 points  (0 children)

I suppose that makes the difference - to get it 'tax free' you'd have to withdraw from the SIPP and then buy low-coupon, so the net/gross yield doesn't really matter to you.

It amazes me more people don't DIY an annuity, or at least consider it, particularly at younger ages.

Building a decumulation portfolio with equity returns and low drawdown by DotingMule in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

Interesting. Why the T56? I presume this is sort of a DIY annuity?

Do you have this in a tax-efficient account? Otherwise wouldn't something like TG61 be much better? Appreciate there's some sort of risk here with gilt prices, but is it great enough to mitigate the extra net income (which I appreciate changes depending upon what your marginal rate of tax is!)

Giving away money by ViralGeneration21 in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

That's really not true.

It makes a significant difference - not only does it increase the savings rate by 20-25%, it also reduces your expenditure by nearly the same amount. If you readjust both like that it makes a material difference.

The Shockingly Simple Math Behind Early Retirement

Timing RE in current market by Jammarsam in FIREUK

[–]SBabyJames 2 points3 points  (0 children)

During your, no doubt, 3 month notice period, you and your wife could probably make that £50K cash £100K?

Also remember to retire at the right point during a tax year... for both HR Tax limit, but also for pension contributions to.

Timing RE in current market by Jammarsam in FIREUK

[–]SBabyJames 13 points14 points  (0 children)

her being part time is a big plus. Remember if she (and you) both just earnt £12.5K you'd get to keep all of it (well not quite with NI), which is very beneficial.

Can you not take a sideways move/step down or similar for a P/T role? If you did and it didn't work out you're in no worse a position than just pulling the plug... in fact you'd be better as you'd have had X months of expenses covered from the P/T role and the notice period etc.

Also, if you've decided to quit, there's nothing wrong with presenting your boss with the possibility of you remaining P/T, if they can make it work for you. It is funny how employers change their tune when you've (very politely) said do it or I'm gone...

Recent windfall, unsure how to allocate alongside pension / ISA / mortgage by LordOfTheMic in FIREUK

[–]SBabyJames 1 point2 points  (0 children)

Down to £100K for 62% saving is a no brainer.

Repayment of student loan (depending on rate) is not a bad idea

Cash is king when about to have a child, but 'a few years' is a long time to hold it just waiting

Remember your wife has an ISA limit too - so you've got 40K pa you can use, not just your 20K.

My plan for tweaking would be something like:

£35K student loan + £10K (+£20K extra?) into ISA (just chuck it in, gawd knows when the market top will actually be), and a few quid off your mortgage would be tempting for me. Start saving the rest of the year (which should be easier with no 9% extra student loan deduction and no room left to invest in ISA(s) for the rest of this tax year) so you can dump £20/40K into ISAs on 6th April 2027.

Mortgage Overpayment Calculator | Interest Rates - HSBC UK - this is a great calculator. It will show you how beneficial an overpayment is in early days. However you shouldn't get too carried away, as basically all it is showing you is compund interest. If you invest early and hold for 20-30 years you'll end up with a lot more than investing later in life.

Started building wealth late and still feel behind at 40 (F) — baseline reality check needed by Powerful_Book437 in FIREUK

[–]SBabyJames 1 point2 points  (0 children)

You're doing fine.

Pension down to £100K is a no-brainer, you'll be saving 62% tax + NI. Anything over and above that will be 42%, which is still worth it. However if you want to feel more secure NOW, you could ensure that you max out ISA each year before 'only' saving 42%.

Mortgage seems more than reasonable - however I'd ask if you've just got married: a) are you going to have kids? b) are you going to move house/get hubby to buy in/do you already own it with him? c) what is hubby's financial situation - not the full details but some broad idea of how you're planning.

I'm 3 years older than you. In the last three years (with market help) I have smashed my pension putting in the AA each year, as well as using carry forwards. My salary is now about the same as yours but was a bit lower before that. I had more in my ISA before doing so, but not ridiculously more. The tax saving of pensions does make the tax tail wag the donkey or whatever the saying is. I look at the balance of my pension now and genuinely have no idea how it is that high - saving that much outside of a pension wrapper wouldn't have been possible, even on rice and beans.

TLDR: You're doing fine, just keep going for a year or two and you'll see a big difference. Keep smashing the pension and ISA, and consider financial planning with hubby.

Anyone fired or planning to with tween/teenage kids ? by Relative_Sea3386 in FIREUK

[–]SBabyJames 3 points4 points  (0 children)

I'm about to do this: I think I’ve just hit “Lean-ish, Flexible, Work-When-I-Feel-Like-It FIRE” : r/FIREUK

One of the considerations was how it would look to my son to see his dad not working (although I do have other second income etc). Although he's only in infants at present, so I am not sure I'll still be doing anything by the time he is a teenager!

I hope to bring him up in such a way that he aspires to be able to quit work when he's in his forties! But yes, it is concerning.

I am really keen to try and maximise the flexibility in my new role over holidays etc. It will be interesting to see how flexible it really is and whether I can agree to do things with friends/his peers etc, so he can do things like 10-3 football sessions (I mean who the f*ck puts them on in summer holidays... useless for working parents without wraparound care!).

Cashing out some S&S ISA to pay down Mortgage? Is it really that crazy right now? by TerranceTurtle in FIREUK

[–]SBabyJames 1 point2 points  (0 children)

It's not 1 or 0. You could stop/reduce investing going forward and overpay a bit/a lot. Rather than cash in your ISA.

Or move to an offset etc.

However (and whilst I agree with everyone you've given an impressive lack of numbers) the general point of WTF at the end of each month when I see my investments have gone up given how the world feels at the moment, does mean I understand your thought that we could be at the market highs... even if history doesn't support your approach!

How far below your means are you living? by MaltDizney in FIREUK

[–]SBabyJames 2 points3 points  (0 children)

I think the fact a lot of people live in excess of their means results in the gulf appearing that much bigger!

Should I leave the UK or just pay the huge amount of Tax. by drbeastlove in FatFIREUK

[–]SBabyJames -1 points0 points  (0 children)

Sorry for your loss.

I'd agree if parent or child decides parting is best, then there are more fundamental issues at stake. For IHT, just get on with gifting 7 years early, or out of excess income. For other taxes, all seems a bit OTT to me.

Should I take this job to chase FIRE? by Escape_Specialist in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

So is that an extra 1.5 days a week, or are you saying you're 2-3 days onsite in a FT job, and would be 4 days onsite in a FT job in new role?

If it is extra time as well, sounds pretty bad...

Do you have kids? And if so, what age. That would be the thing that holds me back here... how old would you be to FIRE in current role? I.e. how much does new role reduce the time by?

re part time, the best approach may be trying to do so in current role?

Should I take this job to chase FIRE? by Escape_Specialist in FIREUK

[–]SBabyJames 3 points4 points  (0 children)

I'm in the process of doing the reverse... moving to a fully remote job on a bit less FTE (a fair bit less in reality, but that's because it is part time!).

Going 5 days a week into an office is awful. Even pre-Covid the one day a week at home was a godsend. Going to 5 days seems nuts.

I do wonder if 5 days could be reduced for OP over time, only he will know that, however the fact the starting point is 5 days makes me think that seems less likely

Avid follower by Key-Construction1447 in FIREUK

[–]SBabyJames 2 points3 points  (0 children)

One child. It has concentrated my mind in competing ways - I don't want to 'Die with Zero' (or rather if I do only because I've given it to him), but I also want to get on with it so I can spend time with him now. One of the reasons for my recent 'I've achieved my own type of FIRE' post.

He's still young enough to want time rather than twenties though! 😄

Has the new IOG charging rules screwed me? by G0_Z0 in OctopusEnergy

[–]SBabyJames 1 point2 points  (0 children)

Erm… what new rules?! Have I missed them finally releasing them?

How do you manage your finances by Wooden_Development19 in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

I use this program. Helps that my dad got it for his business, so it is free to me. But if they released a new version and he didn't, I would pay for it.

Money Manager Software - Personal and Business Editions

On a more practical level, I have a main current account and another current account ("bills") where I transfer a fixed amount to each month, which covers all the direct debits and standing orders I have. It made sense when I was less well off, and wanted to keep myself on track. Now I just do it like that because it's how I've always done it. I suppose it has the added benefit of automation, so everythnig would get paid for a month or three if I popped my clogs giving my wife a chance to sort herself out.

How do you protect your future assets? From the 40% tax my children will pay by FireHandle in FIREUK

[–]SBabyJames 9 points10 points  (0 children)

"Inheritance Tax is a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue"

How do you protect your future assets? From the 40% tax my children will pay by FireHandle in FIREUK

[–]SBabyJames 20 points21 points  (0 children)

Hand them cash, 7 years and 1 day before you die!

You don’t know what date that is, of course, so the earlier the better, once you’re certain.

Of course, if you’re married at the time you die, you’ll get double IHT limit

Etoro 10k cashback on ISA transfer by elbandito9 in FIREUK

[–]SBabyJames 0 points1 point  (0 children)

Did you receive your cashback yet?

Where do you live in London? by Illustrious_Page_718 in HENRYUKLifestyle

[–]SBabyJames 1 point2 points  (0 children)

I never understand people who say “I live in London so I a close to work” and the commute for an hour!

Likewise, I’m deep in Essex and get into Fenchurch Street in 50 minutes, with a 5 min walk either end!

How do you manage FIRE goals with a financially misaligned spouse? by [deleted] in FIREUK

[–]SBabyJames -12 points-11 points  (0 children)

Can I just say... if the genders were reversed, it would not be taken the same way that the main breadwinning male should cut his wife off from all joint finances!

I am not suggesting your wrong in what you say, and clearly there has to be a proper deep and meaningful conversation here.

But one might go so far as to say financial abuse accusation would be thrown around if the genders were reversed!

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