Financial Independence Retire Early (FIRE)

[throwaway4372]

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?

My plan is to retire by 50. I'm 39 with 10 years NI left, I'll either work those years or buy them.

Does anyone here have a heavy preference to S&S ISA's rather than a pension? Interested to know.

Very dependent on circumstances.
I aim to do £20k isa and 20% pension (including employer contrib), but that's with a good career and paid off house.
Everyone should be at least getting as much pension matched by their employer as possible.
If a higher earner then more salary sacrifice is good - up until about 20% then there's not a lot of point doing more.
To retire earlier than 57 (pension access age currently) you need an ISA bridge, so the earlier you can start building the ISA the better (ideally £20k every year).
To retire earlier than your ISA allows, you need premium bonds, property, cash, gia, inheritance, etc.

 

[FerretBoy]

Hello everyone, nice to see a thread about FIRE on here!

With what's going on at the moment I'm not sure if I should be excited due to low accumulation costs or worried that this may cause a stagnant decade of stock market performance.

Does anyone here have a heavy preference to S&S ISA's rather than a pension? Interested to know.

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?

Aim to be able to afford to in 3-4years.

I have focused on pension with a decent defined benefit pension and a few hundred k in S&P500 (yikes).

Outside of pension I only have £50k or so in ISA set aside, the aim is to focus on ISAs a lot more over the next few years. I need enought to tide me over to 57.

Current market is scary, but I'm still buying and will continue to do so for a while yet.

Yes to NI, I might have to purchase the last one.

 

[slinxy]

Hello everyone, nice to see a thread about FIRE on here!

With what's going on at the moment I'm not sure if I should be excited due to low accumulation costs or worried that this may cause a stagnant decade of stock market performance.

Does anyone here have a heavy preference to S&S ISA's rather than a pension? Interested to know.

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?

I have a heavy preference to my pension at the moment due to taxes.. once the mortage is paid off, the mortage money will be going to my ISA, but it will still be less than I'm paying into my pension.

Paying towards the ISA is the only way to really retire early, thou both of my DB pension pots allow me to retire at 56 if I'm willing to take a cut in the DBs.

I will get more than 35 years for the state pension when I'm 55 years old, mine started at 16 for some reason and I think I've only missed 3 years in total.

 

[Trifid]

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?

From what I can work out, I only need to work a couple of months of the year I turn 50 to get the full 35 years. I have full contributions from age 16.


I think looking to retire from 50 is a good age to aim for, and then make a decision from there. With my first pension being accessible from 55, it might make sense to do a few more years and reap the benefit of that delay.

 

[shadow_boxer]

I'm follower of FIRE too. With young children the 'retire early' is likely to be pipe dream as I'll work to secure their futures but financial independence is the priority. Our strategy was buy to let properties (via Ltd Company) that we'd hope to have decent equity or all paid off by retirement age but last few years this has become increasingly unappealing and prohibitive. We're not selling any for now but directing more into SIPP and both paying into NHS pensions at the moment too. We have a smallish amount in ISAs but need to address the property equity Vs SIPP/ISA balance.

 

[Brumboy]

My plan is to retire by 50. I'm 39 with 10 years NI left, I'll either work those years or buy them.


Very dependent on circumstances.
I aim to do £20k isa and 20% pension (including employer contrib), but that's with a good career and paid off house.
Everyone should be at least getting as much pension matched by their employer as possible.
If a higher earner then more salary sacrifice is good - up until about 20% then there's not a lot of point doing more.
To retire earlier than 57 (pension access age currently) you need an ISA bridge, so the earlier you can start building the ISA the better (ideally £20k every year).
To retire earlier than your ISA allows, you need premium bonds, property, cash, gia, inheritance, etc.

Very nice!

Sounds like a solid plan. I'm on track to retire by 40-42 - that number does change though. So in my situation I actually don't have much in my pension (same for the Mrs).

85% of our networth is in S&S ISA's, 14% in GIA's and the rest in our current account for emergencies.

We almost max both of our ISA's out each year. And invest in index funds and a few "high risk" plays.

But yeah there are quite a few vehicles to utilise. I am extremely grateful we have ISA's though!

Aim to be able to afford to in 3-4years.

I have focused on pension with a decent defined benefit pension and a few hundred k in S&P500 (yikes).

Outside of pension I only have £50k or so in ISA set aside, the aim is to focus on ISAs a lot more over the next few years. I need enought to tide me over to 57.

Current market is scary, but I'm still buying and will continue to do so for a while yet.

Yes to NI, I might have to purchase the last one.

Awesome! DB pensions are powerful for sure.

S&P 500 should be fine long term so don't worry haha

DCA and set/forget!

Yeah I am currently working out if it's worth buying NI gap years post retirement.

I have a heavy preference to my pension at the moment due to taxes.. once the mortage is paid off, the mortage money will be going to my ISA, but it will still be less than I'm paying into my pension.

Paying towards the ISA is the only way to really retire early, thou both of my DB pension pots allow me to retire at 56 if I'm willing to take a cut in the DBs.

I will get more than 35 years for the state pension when I'm 55 years old, mine started at 16 for some reason and I think I've only missed 3 years in total.

Similiar position. Barely anything in my pension, almost all my networth in ISA's.

Not bad at all though, sounds like a smart plan

From what I can work out, I only need to work a couple of months of the year I turn 50 to get the full 35 years. I have full contributions from age 16.


I think looking to retire from 50 is a good age to aim for, and then make a decision from there. With my first pension being accessible from 55, it might make sense to do a few more years and reap the benefit of that delay.

On track then!

Yep makes sense to me. Then an ISA to bridge the gap?

 

[delta0]

Hello everyone, nice to see a thread about FIRE on here!

With what's going on at the moment I'm not sure if I should be excited due to low accumulation costs or worried that this may cause a stagnant decade of stock market performance.

Does anyone here have a heavy preference to S&S ISA's rather than a pension? Interested to know.

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?

It’s a bit of both. S&S ISA is the bridge to the pension. So it’s hard to have a preference unless you already have a lot in one vs the other. It does depend when you want to retire as you may want to have more in the pension.

 

[Brumboy]

True - that ratio is important. We're on the other end of the spectrum (basically nothing in pensions, everything in ISA's and GIA's). It just doesn't make sense for us considering our estimated retirement age. Plus as long as they keep ISA's how they are now, paying zero CGT/income tax/NI sounds very nice lol

 

[FerretBoy]

Given the current rules (neither pensions or ISAs are safe from change) and assuming you pay tax then surely pensions are the best way to fund age 57+, up until you are hitting the limit for Tax Free Cash or are likely to pay higher tax than you originally saved.

You don't pay NI or CGT on pension income either.

General consensus is paying for NI is worth it, but I get it's hard to be sure what will actually be paid out. Remember though that ppl in or close to retirement vote the most...

That said I can see why you are heavy ISA with wanting to FIRE at ~42

 

[FNG]

ISA over a pension is daft (other than an amount to carry you over till oy can get your pension). Pension is free money if you are working due to tax and NI breaks. I guess if you want to retire at 42 then ISA is the only way to carry you over for the next 15 yrs.....

 

[kefkef]

Only just starting to look into this. Currently 51 (which all my mates are saying is early to be thinking about retirement) and would like to be done by 55. I've got 17 years in the 1995 section of the NHS pension, and approx. 3 years in the newer 2015 scheme people were moved into up until this point (total combined fund value is around £500k). I've also had a private pension since i was 17, so 34 years however it has pretty much been ticking over since i joined the NHS, so the fund value is only around £120k. Had a pretty bad year personally last year, with my mum (77), uncle (65) and best friend (46) all passing away so it's made me start to think about getting more from life in the remaining years, with the sale of the family home that will give me around £400k (IHT already paid) that i need to understand how best to invest whether additional pension up to the £60k or maximising the ISA investment. Mortgage is pretty much paid off and the outgoing bills are drying up. Hopefully that's enough to get me FIRSE (Financially Independent, Retire Semi Early)

 

[MookJong]

I'm 46 mortgage free since mid 2021 and been paying 35% of my wage into my company pension since then.

Got 30K in cash ISA's and another 10k in a stocks ISA

Anything else I could be doing or just keep on keeping on?

 

[Brumboy]

Given the current rules (neither pensions or ISAs are safe from change) and assuming you pay tax then surely pensions are the best way to fund age 57+, up until you are hitting the limit for Tax Free Cash or are likely to pay higher tax than you originally saved.

You don't pay NI or CGT on pension income either.

General consensus is paying for NI is worth it, but I get it's hard to be sure what will actually be paid out. Remember though that ppl in or close to retirement vote the most...

That said I can see why you are heavy ISA with wanting to FIRE at ~42

We're due to hit our investment goal purely in S&S ISA's. So we don't need money from a pension. Yes regarding NI we probably will fill in gap years by doing a voluntary payment

 

[Brumboy]

ISA over a pension is daft (other than an amount to carry you over till oy can get your pension). Pension is free money if you are working due to tax and NI breaks. I guess if you want to retire at 42 then ISA is the only way to carry you over for the next 15 yrs.....

Why are you assuming that the ISA is only going to last for 15 years?

 

[slinxy]

I'm 46 mortgage free since mid 2021 and been paying 35% of my wage into my company pension since then.

Got 30K in cash ISA's and another 10k in a stocks ISA

Anything else I could be doing or just keep on keeping on?

Why do you feel you need 30k in your cash ISA?

 

[Brumboy]

Why do you feel you need 30k in your cash ISA?

Might be an emergency fund?

 

[413x]

Don't see retiring until state pension age.
Too small a pension, reduced job prospects, rising pension age, wanting to live for today.

I'd have to be earning 100k+ to achieve it without it having a huge impact on living.

And the cash amount to have a "good" retirement? Yeah that would never happen for me.

Hopefully there will be jobs long enough into thr future.. But maybe not!

 

[Uther]

Don't see retiring until state pension age.
Too small a pension, reduced job prospects, rising pension age, wanting to live for today.

I'd have to be earning 100k+ to achieve it without it having a huge impact on living.

And the cash amount to have a "good" retirement? Yeah that would never happen for me.

Hopefully there will be jobs long enough into thr future.. But maybe not!

Lifestyle creep. There's different ways of approaching things, personally I live quite simply these days, no debt is the big one.
I discovered fire far far too late (it was mainly an American thing) but still went part time in my early 50's in a low paid / no stress job and quit completely at 57, which would have been 55 but the pandemic hit then.
The state pension would cover all my day to day living expenses, with money left over.
I could live for 5 years easy on 100k!

 

[adam cool dude]

In 30 years time we might have AI overlords and there will be zero currency as robots will do everything and we will require zero pay which in my idealistic mind means no one will have to work as an economy will not be needed and humans will simply need to focus on development and leisure.

That will obviously not happen as greed and power is a horrible human trait.

In theory at least if you can make an ai that can work like a human and put it in a robot then there is zero need for money.

That doesn't sound too unrealistic a proposition for thirty years time.

 

[Bluebozzy]

I definitely lack the financial literacy to be able to achieve complete financial independence, but I hope to be able to reduce working hours by the time I'm 50 and reduce from 40 hrs/week + overtime to 25-30/week. Enough to be active and engaged with a sense of purpose, but not suffocated by work and have plenty of opportunities for "life".

I have no idea what to plan in regards to retirement - organ transplant is in my future (hereditory condition), and I'd bite the devils hand if it meant I'll live to 70.

For now I'm young enough where it's all a pipe dream & all efforts involving ISAs and the like are directed towards housing instead. It's just not a feasible thing to consider unless you entered the workforce at a high starting wage.