Overpay mortgage and pay into pension, or focus all on mortgage

[Mrs Vimes]

At least with the insurance required for the mortgage it would be covered in the event of one of us dying.

Just on this note - you can take out life assurance entirely separate from any mortgages and surviving spouse could use it to buy a house outright if it happened so this really shouldn't be a consideration.

 

[Gerry Canning]

Dan,
Hard to guess what your nickel is to be worth in X years, maybe its a moot point, because if your nickel is of dime value in the future, we are banjaxed anyway!.
So 2 million in X years time should still be of real value.Today it would be worth a lot .


Today @ 65 you need pension savings of circa 20,000 to get 1,000 pension per annum.
Today @ 66 State pension is (same) as a pension pot of circa 230,000.

So on retirement now you have own pot of 230,000 + state pot of 230,000 = circa 460 per week.

So aim for 1 million + and enjoy the cruises.

 

[stiofan85]

Lots of good replies since yesterday!

Re Missus enjoying shiny things - she is on board, I was exaggerating a tad. I've got our salaries mandated to our shared account and I use a standing order to give us both an allowance for the month. The rest is used for savings etc...

Re factoring in childcare costs - this is in my financial plan. I've budgeted €1000 per month per potential baby.

Re saving for deposit. We have this plus ~25k in savings and adding to it rapidly.

Re: 2m for a pension pot. This is a separate question I had, but it's for another day. Seriously though, 2m seems like a lot! Definitely not relying on the state pension being there in 40 years though.

Re Job Security: Hers is 100% secure and on a scale. I'm in tech....that industry is strong but I'm not foolish enough to think it can't crash. I've a lot of transferable skills so if it should collapse tomorrow I'd be able to find work, but at a lower rate of pay. For this specific reason I want to secure a home.

It seems like striking a balance between owning our own home (overpaying mortgage), pension, and emergency cash is needed, which is what I'd always expected and planned for.

The 2nd house down the line is a plan - it is not set in stone. If it happens, great. if not then we'll re-evaluate as needed. For the present we need a home for the family and security, so to answer my original question: It doesn't make sense to double down on the mortgage and sacrifice the pension as per this thread:

http://www.askaboutmoney.com/thread...-a-pension-but-dont-leave-it-too-late.189981/

Thanks!

 

[MrEarl]

Ah here, 2 million private pension?!

That probably is what a high earner will need.

It's more than achievable for a professional in his/her 30s.

Folks,

I am talking €2m per person, to give a decent pension in retirement from say age 65.

Key considerations:

* We are living longer with average age expectancy for males in the mid 80s and females mid to late 80s. Thats going to continue to increase over the next few decades, before the original poster and their partner get anywhere near retirement, not alone past it.

* Accomodation costs and nursing home costs are serious expenses. While the original poster may be working on getting a debt free family home to provide accomodation, healthcare and nursing home costs will need to be considered in the future.

* Inflation obviously plays its part. €2m in today's money won't have anything like the same purchasing power in say 30-40-50 years time, which is really the period of time we are talking about.

* The Irish state has a serious problem on it's hands and cannot afford to fund the future state pension costs, not alone increases in same. So don't bank on collecting €12k pa in 30-40-50 years time... or that qualifaction for the state pension will be from age 68, as odds are it will have been pushed back to an older age for commencement.

Take a little time to mess about with the Pension Calcuation on the Pension Authority's website: http://www.pensionsauthority.ie/en/Calculators/Pensions_Calculator/