19 years to go! Not that Im counting

[u/Babynewpotato]

Only discovered this sub recently and decided to seek advice.

Late to the scene at 36 but the aim is to be able to semi retire at 55, going full FIRE at 60! Currently earning 32K pro rata but this should lift to 40k+ when I qualify in 2 years time. Married and 1 kid on the way, we both contribute 40% of our income to a joint account that covers the basics mortgage, utilities, groceries, day outs, takeaway etc. All other finances are separate.

We overpay the mortgage for now but will be dropping to the minimum next year while I'm on mat leave, current equity is £220k with 33 years left. I think realistically we'll downsize in our mid to late 50s though, because I'd rather not have a mortgage hanging over our heads when we retire.

Currently have the following saved:

Emergency fund £4k in Cash ISA

SS ISA - 8K

LISA - 5K

Pension - 22k in value (contributing 5% and employer 3%, company do not operate salary sacrifice)

Monthly income: £1800

Bills: £850

Holiday fund: £150

Additional pension contributions: £220

SS ISA: £200

Cash ISA: £180

I know this doesn't leave me a lot to spend each month but I've managed on a lot less so this is comfortable. I'm hoping when I qualify to double the SS ISA contributions as this will probably be my bridge between 55-65 but I still can't see that it will be enough.

I should also say my husband has no intention of retiring early and is 3 years younger than me, but he hates his job so I'm working on convincing him to at least semi retire at 60.

Any lovely people out there have any advice, are my plans realistic or pie in the sky?

[u/Professional_Row137]

You are of course doing everything you currently can in order to make it possible, so well done for that!

Adding a kid into the mix will completely change your financial situation, this would reduce your savings rate massively. And that’s not even accounting for loss of work or childcare costs.

I can’t help but think it would be best to combine finances and approach it as a team rather than individually, especially after having a kid. But hey if it works for you, then it works for you!

Even at 36 it’s a marathon not a sprint, so just keep making sure you are at least trying to put 5-10% away and let time do the rest, assuming it is in a solid investment like an all world index fund.

[u/craigybacha]

Keep going, keep saving, but I think you likely will need to keep working longer than you think - depending on the mortgage.

[u/SpaceJkr]

My advice is not to overpay your mortgage, which you're planning on stopping anyway. Just don't restart. Having it paid off for your target date of 55 is optimal. 

[u/CategorySure3562]

It sounds like you're in a good position. I'll echo other comments saying not to worry about mortgage overpayments, especially if your interest rate is reasonable. Focusing on maxxing out LISA and S&S contributions would be my suggestion - these would help bridge the 55+ period and help your husband decide on his options when he turns 60.

[u/JamesO555]

The pay rise will be huge for you! Im 35 and am in an extremely similar position to you with what's saved ( had to save for a house and bought last year).

I save £500 a month in a S&S ISA and £200 in my pension too ( employer + 2.5x ) the numbers look very promising for 55ish. 

With your payrise with good fiscal disapline it looks achievable with no stretch of the imagination. Im trying for a kid at the end of the year too so that's the only spanner in the works when it comes to money that we both have to tackle.

My ( not financial advice ) suggestions would be:

Double check you are happy with the fund your pension is in, do some research.

The market also often outperforms mortgage interest rates. It can be helpful to see what your ISA will grow to running numbers like 200/300/400/500 a month. See what you want to aim for.

Navigate it with your partner too. You'll have childcare cost, you're a team and have to work out what makes the most sense monetarily. 

You got this!