Anyone doing FIRE? How's it going?

[BigTittyLife]

I'm aiming for a fat FIRE at 48. We're 38.
We're hoping to have a £1m pot by that age spread across different investments - some accessible at 48, others tied up until later on. On top of those investments, we have a house worth about £340K which we've paid off. We also have shares in a company which may or may not sell for a decent price at some point.

I wouldn't say we're particularly frugal and we certainly don't go to the extents of some FIRE people. I guess our biggest savings compared to others are that we don't go on holiday at the moment because of our elderly dog, and that we don't have housing costs because we live in a modest house that we've fully paid off.

We're currently putting away about 79% of our income without trying too hard.

We're invested mostly in shares-based retirement tracker funds. We're dabbling in higher risk investments but only amounts that we can afford to lose. We have private pension pots but we don't put a huge amount into those. We both have decent-ish workplace pensions which will give an income of some size at some point.

Is anyone else doing FIRE? I'm on some FIRE forums but they're quite US-dominated and can be a bit weird. I'm wondering if any MNers are FIRE-ing?

I think it's worth clarifying what % of pension payments will be matched by your employer. This might be available in the documents given to you when you first joined. Then decide how much you want to pay in.

I don't think any amount is "too much" from your employers perspective. You could pay in 100% of your salary (unless this is more than 60k), although few people will be able to do this and your boss would probably be curious if you did!

The default fund isn't always the best choice for you. Find out what it is and what the other options are, then research what would suit you best.

You can't pay in 100% if it's done by salary sacrifice, because salary sacrifice means the whole payment is made by the employer (you "give up" your salary to your employer, this means you save the NI as well as the tax, on other types you only save the tax) because your employer is not allowed to let you fall below minimum wage.

They could theoretically allow you to pay down to min wage with the sal sac and pay the rest without sal sac but I've never come across a scheme that allowed two different payment methods.

Ok thanks a lot for your replies. I did just dig out my contract to see what it said under pension, and it turns out it actually is one of my colleagues who manages it, and not the MD, so I will email them now and take it from there. Thanks all. Now I just need to think carefully what I can afford to pay each month.

@Isyesterdaytomorrowtoday DH has been approved for severance and has been told to tell his staff. A couple have cried, he is well liked. It’s going to be a huge adjustment because we really didn’t expect to be doing this for a couple more years.

When you're 38, 48 probably sounds ancient. But once you're 48, you'll find that if you stop working, you'll probably be bored. None of your friends would have stopped work so they won't be able to catch up during working hours.

I think FIRE is a big thing in America because they don't tend to have work - life balance. They have very little annual leave so it's hard to travel abroad.

I have plenty to do beyond catching up with friends. My dad wasn't bored when he retired at 55, I doubt I will be now I've retired at 50. Just because some people have - and can imagine -very little life outside work doesn't mean that's true for everyone.

What an incredibly patronizing and presumptive post.

As @NoBinturongsHereMate said, I can image enough of a full life outside of being an employee to amply fill my time. Of course there will be moments of boredom during my very long retirement because that's life but work is one of the very, very, very last activities I would choose to fill that time.

I already know what I want to do once I “retire”. I want to do a PhD and write drama. However, I know myself well enough that I won’t be able to focus on those things if I have financial stress to distract me; hence the focus on FIRE.

Are you speaking from personal experience, have you retired early yourself orange blosssom?

I honestly can’t imagine I’ll be bored.

I’m an introvert living an extrovert life to maintain a career. I can’t wait to potter in my garden (could be a full time job some of the year), read, learn, maintain my home instead of paying others to, spend time with my DH, go on holiday…

I also have some friends who are 10/15/20 years older than me who may well be retired too. I’ll be absolutely fine.

@BadSkiingMum the parking thing really pisses me off.
I know some extremely wealthy people who just can't spontaneously do anything because they worry so much about parking or tiny prices like that.
It drives me mad.

Are any of you worried about whether the coming 'painful' budget will change your plans? We've just finished some really expensive years and I was planning to increase pension AVC and S&S ISA contributions but am a bit worried it's going to be scuppered.

@Mia85 DH will at some point in the future have to pay CGT, we already knew this. It’s complex and was not his decision as something was done many years ago when he was still a student. He can’t even remember signing anything but must have. But it’s a bonus amount not something factored in to our plans at all.

ISA changes it would affect us, I would imagine it would be future payments made. I could see them lowering the amount you can put in.

I am a little concerned but I think it is unlikely to make a huge difference, not enough to change plans. Maybe we will need to cut our expenditure a little to accommodate.

We are at the RE stage though rather than saving to be FI. We may miss out on some ISA perks in future (which would irritate me as I think it's important to encourage saving and FI) or find ourselves paying more IHT in future but we never included receipt of any inheritances in our plans anyway as it seemed presumptuous.

@Mia85 Budget announcements always change my plans a bit. There may be something which means that my investments won't last as long as I anticipate, such as higher tax on withdrawals, more tax on fuel/energy. The more I spend on living, the more I need to continue having some earned income. So inflation is an issue, increasing food cost. So things in the Budget could affect the cost of food, and other Government things can affect the availability of food. As an Island we are not able to survive on just what we grow. If we cannot import food, animal feed, LPG, Electricity (just looked right now and or generation - demand means we need 1.2GW of transfers). So things Government changes, will affect my plan in some way, but until it is known what they are changing, it's impossible to know what the affect is on my plan.

We intend to retire in the next couple of years though i haven't held back on life to get to this point. We have various savings, inherited money, pensions, a house worth half a million and potentially I will inherit £250k or so. But we will both probably take some work when we feel like it, local pub has offered me shifts whenever I can for instance, a bit of a joke at first but seems a good idea, they open from 9am and struggle to get mon-fri staff as most employees are students!

@Mia85 I'm waiting to see what they actually announce before getting too worried. To be honest, I'm expecting to be fucked over by Labour in some way or another so just waiting to see how it'll happen.
DP owns a company which he'd ideally sell in four or five years and would mean paying CGT. So I'm keeping a very close eye on announcements in that area, and encouraging DP to explore steps now to ensure the sale is as tax efficient as possible if it happens in future. He's being a bit slow on the uptake with this which is really bloody frustrating but its his call.

But like @ViciousCurrentBun , we're not factoring the money from the company sale into our FIRE plans so anything we do get will be a 'bonus' taking us closer to RE.

In other news, I won £250 on Premium Bonds today so, go me 😆

Me again - looking at my pensions. From looking at my payslips it looks like I had been making a 3% contribution per month to my pension- which I think is lower than the recommended amount.

As from looking up online I should be paying at leat 5%

Just wanted to check I've got that right.

Anyway, just about to increase it- but really hate my colleague and MD knowing so much about my personal business. Tempting to increase it by a tiny % and pay the rest into a SIPP. But the admin hassle and claiming tax back etc is the reason why I'm proceeding with this route.

How is them knowing you pay 5% (or 9% or 50%) into your pension any more revealing of your personal business than knowing you pay 3%?

Check what the max employer match is and put in at least that much. A common recommendation is that you should pay in a percentage equal to half your age when you start the pension, but that doesn't take into account most people starting lower and needing to catch up. Certainly 3% won't go very far at all.

@NoBinturongsHereMate well I gritted my teeth and did it - although it wasn't half my age (a lot less 😔)

I debated with myself for a long time how much to put in. In the end, I realised I don't know what funds the pension is invested in (I can look it up, but it might still not mean much to me).

I can also max out my ISA into an index fund, thereby having some control over that.

I did feel instantly better once I sent the email. Like I'm taking a really positive step for my future.

I'm so happy having that money redirected before it even hits my bank account, so there's no danger of me deciding to spend it on anything.

I have sooo many more steps to go.

I am finding investing much more of an admin hassle than I thought it would be.

I had a S&S isa with Hargreaves's lansdowne, but I just chose random funds when I set that up, and I don't know how to change it. So that will take some time and effort to figure that all out.

I also was about to set up vanguard S&S isa because that is recommended, then I realised I could invest in the same funds through my bank, and that actually had lower fees, plus everything would be visible to me in the one place.

But that has worked out to be really complicated and I'm not sure I've set it up properly.

I also have 7 legacy pensions which I've tracked down. I need to amalgamate them somehow but again I'm not totally sure where to do it.

This leads me onto something I was feeling angry about recently: I had 2 very lengthy calls with a financial advisor through my bank.

You would have thought they could have helped me with all those questions and issues.

They spent the first call going through my spending and plans etc. and came to the conclusion that holidays were important to me and I wanted to spend a lot on holidays.

Then the next call lasted about 2hrs of them selling products to me.

I was actually really tempted to go for it all, because I really didn't know what I was doing or aiming towards. Luckily my inertia got the better of me and I just didn't end up following through with it all.

I have since discovered FIRE and feel so much more energised and in control- which is great! 🔥

I also was about to set up vanguard S&S isa because that is recommended, then I realised I could invest in the same funds through my bank, and that actually had lower fees

you should check that as it’s not likely correct.

If you're a basic rate tax payer you don't claim any tax back.

Exactly, the SIPP does that for you.

I'm a higher rate tax payer which is why I wanted to do it through my company pension scheme

If you are investing in a vanguard fund via your bank then you are likely paying 2 fees...To your bank directly for the transaction and your investment is cut as the vanguard fee will be charged to the bank which is hidden from you.
The bank will just report there fees not that you are indirectly paying vanguard.