So this initially started as a single page to track and show everything, but as I tried to condense it, I found it just didn’t work, so this is more of an overall statement, along with the necessary links (when they get published), let’s see how it pans out. I have now split it into the various areas, for this post I will focus simply on my approach.
I will also put my target up here, at the top, in full view.
1st June, 2025.
That’s the date I have put in for me to be FI. Right now, I think it’s highly unlikely (read impossible) because of my approach however – aim high! It will encourage me and keep me thinking. Worst case I am off by a few years it’s still giving me something to aim for! Why is this impossible? Simple – the mortgage is too high (and I am not willing to move), I am putting a lot into pensions for tax reasons (and I am not willing to change), and I don’t want to sell off parts of my ISA until I can collect my pension. So it’s all my own fault, and I accept this.
Like many people in the FIRE community, I have a figure in mind of what I think it will take for me to be able to make work as an optional extra. I even follow Mr Zombie’s experimental withdraw strategy which gives me confidence that these things will work, however there are some complications for me.
Key among them are what does that actually mean in terms of the big number (apart from being a big scary number!), can I actually cope with selling off units to live (the answer is no which increases the number I need) and what can I get at, when.
Firstly, can I actually cope with selling off stock? The simple answer is no. However this isn’t quite the whole picture. If I were to be at close to the Life Time Allowance in my pension then I would have no choice but to sell and take some money, but this is more of a tax decision than a personal one and I think I wouldn’t have a problem with that (in fact I would probably sell them, take them out of the pension and reinvest outside of the pension wrapper). In effect this means no sell down, but living off the natural yield – this means my big scary number needs to be even bigger.
What can I get at when – that’s a much bigger challenge, and so I have put a separate section to go through that as its more complex I think for the UK based folks than those in the USA (I am not sure about other countries but I am sure all of them have their own challenges).
So the short answer is I have a great big number to aim at and I need to get going (faster).
Firstly to make the extra cash above my expenses. A lot of people in the FIRE community go for Buy To Let or side hustles. I didn’t – I invested in myself, worked the extra mile and collected the promotions, moved jobs and worked my way up. Like RIT, this involves long hours, often weekends, but having seen how my total pay has gone up, well worth it.
I want to make it as tax efficient as possible, that means initially using ISAs & Pensions, and then after that what about broker accounts etc. however that would require me using up £40,000 of ISA allowances and then of course my pension allowance on top. That’s a lot of cash to find, but its a good aim to go for.
So I have a minimum figure in mind that I need to hit, however the “problem” here is that of all my assets not all will be accessible until I am older, and can access my private pension – this impacts the date I can achieve FIRE – however I want to make sure I make the most of the tax perks of putting money into the pension so I will continue to do just that. I will document my approach on finances and wrappers, from the very last piece (State Pension) to available now.
I know some people look at running down their ISAs and unwrapped accounts so they are almost empty to time with being able to access their pension. I am not comfortable doing that, so I aim to hit my FIRE number excluding Pension and Housing wealth whilst still building those up. Its a tall order indeed, and hence I don’t think it is going to be achievable by my date above, but I would rather aim high and get close than aim low and make a lower amount.
According to the Mad Fientist and Mike over at 7 Circles (deep link to the spreadsheet here) – I have used both of their spreadsheets – I could retire before then, however I would have to sell down my ISAs in the run up to my pension, which I don’t want to do. I also rejigged the Mad Fientist’s spreadsheet so I can track full net worth FI, net worth excluding housing FI and then excluding housing and pensions FI. Based on that its 6 years, 17 years and 22 years respectively (this was before my November, a story for another post). That doesn’t fill me with confidence, but heck, I will go for it anyway. If I can look back at this blog in 9 years having made it and go “Wow, I did it” that will be amazing!
What do you think? Am I mad trying to set the bar so high, should I sell down my investments whilst waiting for my pension?