Comfortable empty nesters. What should we do next?

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Paddy1962

New Member
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Personal details
Age: 59
Spouse’s/Partner's age: 58
Number and age of children: 2, ages 32 and 30. Neither married, our son has a girlfriend.

Income and expenditure
Annual gross income from employment or profession: 180,000
Annual gross income of spouse: 110,000
Monthly take-home pay 12 500 pcm
Type of employment: Both civil servants with DB pensions.
In general are you:
Saving a few thousand per month. We have worked hard (like so many) and life hasn't always been easy for us so we believe in enjoying our life at this stage and are not trying to save too hard. We take nice holidays etc.

Summary of Assets and Liabilities
Family home worth €950k with a €170k mortgage
Cash of €150k (recent inheritance). Equity funds 100k.
Defined Benefit pension fund: Will have a combined pension of 100K with a lump sum of approx 250k. We have gotten advice about the pension threshold and will retire just before exceeding it.
Buy to Let Property worth €250k with no mortgage.
Holiday home; worth €350k, no mortgage.

Family home mortgage information
Lender; EBS
Interest rate; Tracker; 0.8% above base rate

Other borrowings – car loans/personal loans etc; None.
Do you pay off your full credit card balance each month? Yes

Buy to let properties
Value: €250k
Rental income per year:€14K
Rough annual expenses other than mortgage interest : Old house that needs a lot of maintenance....approx €5k

Do you have a pension scheme? Yes, DB pension.

Do you own any investment or other property? Holiday home. No mortgage. Worth €350
What specific question do you have or what issues are of concern to you?
My wife and I have worked hard and have been through many tough financial times but are now comfortable and thankfully are healthy. We are very grateful for this.
As we approach retirement we want to keep our life as simple as possible without having too much to mind. We enjoy nice meals out and nice holidays but we don't need or want a 5* lifestyle. We are happy to remain living in the family home for now as it is easy enough to manage but we are not inclined to stay as a landlord because of the hassle and we are using our holiday home less and less.
Our children are both educated to masters levels and have reasonable but modestly paying jobs. They are both renting in Dublin and trying to save for a house deposit but without some help from us they will struggle to buy anything. Its madness but thats for another day.
We are sorted for a pension so think will have enough income in retirement. We are inclined to look after our children at this stage...sell the BTL and holiday home , pay off our mortgage and give them substantial deposits. I know the inheritance threshold issues etc but think this would be the best time for them to inherit as it will help them to achieve housing security. Friends say we are mad and shouldn't be cashing in our financial chips at this stage. I am not looking for legal advice pertinent to possible plans as I have a great Solicitor. I would just be very grateful for guidance and advice from the very wise contributors to this forum.
 
For what its worth i think your suggested approach is spot on, as you say being a landlord is a pain, you have some valuable unecumbered assets, sell them, help the kids out, you are left with no mortgage and a very comfortable pension situation, what more could you need into retirement, a decent lump sum, health income and a valuable home fully owned, plus you have helped your kids out when they need it most.

Sounds eminently sensible to me.

Congrats and the very best of luck!
 
You are in a very secure position and it seems like you have your priorities straight. Help out your kids now, as they will struggle as renters with modest salaries. The BTL is not making you much money anyway and might be a nuisance going forward. Sell it. You can probably afford to keep the holiday home if you really wanted to, but you might need to keep the mortgage for a while longer if you want to do that and help the kids. The tracker rate is pretty good and you would be able to afford the repayments with your current and retirement income.
 
Agreed with all of the above. You don’t need financial advice, you have more than you’ll ever need. Your decision to help your children now rather than wait until they are too old to benefit from it is a generous and wise one. Far too many hoard until the bitter end.

Hats off to you both. Ignore the naysayers!
 
A very smart and mature approach in my view.

You’re in great shape financially and helping the kids makes sense.

I’d just be careful to protect them (e.g. perhaps lend money rather than gifting it if there’s a relationship that hasn’t bedded down in the mix).
 
Gordon Gekko said:
A very smart and mature approach in my view.

You’re in great shape financially and helping the kids makes sense.

I’d just be careful to protect them (e.g. perhaps lend money rather than gifting it if there’s a relationship that hasn’t bedded down in the mix).
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In addition to this, it’s probably most favourable to ‘loan’ them whatever sum you’re willing to give them. The interest at prevailing deposit rates which are close to zero will be a gift. Knock 6k/12k per year (3k from you and your wife to them (and partner if you feel comfortable)) off the principal tax free. This will allow you to give them the lump sum up front whilst also minimising the tax burden they will incur in later life.
 
I'd echo the above.

Paddy1962 said:
I know the inheritance threshold issues etc but think this would be the best time for them to inherit as it will help them to achieve housing security.
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Makes total sense to give kids their inheritance already. You can expect to live approx another 25 years or so and by the time your kids inherit I would expect that the Group A thresholds will have risen anyway.
 
Thanks very much for your replies and advice. I have been following the forum for a while and I am always impressed by the very sound advice given by knowledgable people.
I plucked up the courage to post because my wife and my instincts were telling us that we were doing the right thing and, although we haven't discussed our financial affairs with many people, we had second guessed ourselves from hearing comments that were critical of plans for various reasons. We also have observed at close hand, people hanging on to significant cash wealth that they will never spend with some of their hard-working adult children really struggling with mortgages, creche fees etc etc.
We were worried that we were missing something but can now plan forward with our minds at ease. We know we are very fortunate that we can help out.
Gordon Gekko said:
A very smart and mature approach in my view.

You’re in great shape financially and helping the kids makes sense.

I’d just be careful to protect them (e.g. perhaps lend money rather than gifting it if there’s a relationship that hasn’t bedded down in the mix).
Click to expand...

Zion2022 said:
In addition to this, it’s probably most favourable to ‘loan’ them whatever sum you’re willing to give them. The interest at prevailing deposit rates which are close to zero will be a gift. Knock 6k/12k per year (3k from you and your wife to them (and partner if you feel comfortable)) off the principal tax free. This will allow you to give them the lump sum up front whilst also minimising the tax burden they will incur in later life.
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Thanks @Gordon Gekko and @Zion2022 . We will act on this good advice.
Míle buíochas
 
You can also help them in a less obvious way such as paying for white goods for them when the time comes. That's not a gift. That's just you buying a washing machine, fridge etc.
 
Obviously your children are money savvy or you would not be considering helping them out. It is the best thing you can do for them as the benefits will be long lasting and even to the grandchildren when they arrive.
We also did this many years ago and with some careful planning it meant one parent in each family was able to be the homemaker for several years while children were young.
Best of luck with it
 
Black Sheep said:
Obviously your children are money savvy or you would not be considering helping them out. It is the best thing you can do for them as the benefits will be long lasting and even to the grandchildren when they arrive.
We also did this many years ago and with some careful planning it meant one parent in each family was able to be the homemaker for several years while children were young.
Best of luck with it
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Thanks @Black Sheep .
Yes, they are good savers and also, do not expect anything from us. It is great to hear that it worked out so well for your family. If we are lucky enough to have Grandchildren, it is very nice to think that they would benefit from it too. Two parents working full-time, with no wriggle room, is a tough call.
 
EvenStevens said:
You can also help them in a less obvious way such as paying for white goods for them when the time comes. That's not a gift. That's just you buying a washing machine, fridge etc.
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My mother in law bought us white goods over 20 years ago. It was such a bonus for us starting out, with not much to spare after buying the house.

Paddy1962 you are in a very fortunate financial position and I'm sure your children will be thrilled if you decide to help them out now. We were very fortunate to get help with our house deposit. It's such a wonderful gift at a time when you are starting out on the property ladder. Whatever you decide, I'd keep any financial business to yourselves and leave friends to worry about their own finances. We pay rent for our son while he's in college while friends would probably expect their kids to work weekends to pay theirs - each to their own. I'd like to think we could help our kids out with house deposits when the time comes.

Continue to enjoy the meals out and trips away and look forward to your first visit to the 'kids' new homes.
 
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