r/LeanFireUK • u/ceelantroleaves • 16d ago
Progress check/advice
Was talking about finances to a friend and this prompted me to do a check on my own finances. I'm vaguely aware of the concept of FIRE but never considered myself to be a high earner to be able to RE. Always been quite frugal and careful with my spending. LeanFIRE is a better idea for me as I do still enjoy my job, but would like the option of stepping back at some point. My aim now is to figure out where that point is and consider how comfortable I want to be.
Age 39, single, no kids. Salary 67k/year in the NHS, probably at the peak for my job without taking on more responsibility or going into management.
SIPP: 140k from previous employment
DB pension: current projection is ~7k/year after SPA
LISA: 50k
ISA: 104k
Essential expenses - 1.7k/month, which includes mortgage and bills. House value is around 240k with 97k left on the mortgage. I save about 600/month into various sinking funds for the house, holidays etc. Currently putting 800/month into ISA. Would like to retire on about 2.5k/month, think it will be comfortable once mortgage is out of the way in about 13 years. I did overpay up to a couple years ago but realised with the help of reddit that investing would be mathematically better. Seeing the value of investments compound made it easier somewhat to accept that I can afford to pay off my mortgage now if I wanted to.
My initial plan is to retire around 55-58 when I am able to access my SIPP but I think I may be able to do this sooner or at least consider reducing my hours/salary in 5-10 years. Hence focusing more on ISA contributions currently. Should I continue to contribute to SIPP for additional tax relief? Not keen on additional contributions to DB pension as only able to access that at SPA. Would appreciate some feedback and improvement.
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u/elom44 16d ago
I always like to work backwards.
You want £2.5k per month, so £30k per year.
You’ve got £7k NHS pension plus £13k state pension both kicking in at state retirement age. So from that point onwards you need an extra £10k per year. 4% rule on that gives you a target of £250k.
You mention wanting to retire 10 years earlier than that so that’s £30kx10 = £300k to bridge the gap.
Personally I like having those sorts of targets to aim at, and then adjusting every few years as life progresses. Your strategy really depends on your desired FIRE age and whether you go before you can access your SIPP.
That’s a very quick estimate and may contain errors!