Age: 46
Spouse’s/Partner's age: 50
Annual gross income from employment or profession
€101k + 20-25% Bonus - Private Sector
Annual gross income of spouse
€90k - Public Sector
Combined monthly take-home pay Net
€7,600
Type of employment
See above
In general are you
(a) spending more than you earn?
No
(b) saving?
We’re saving around €1,000 a month now in a regular saver plus I save most of my annual bonus.
Rough estimate of value of home
€850,000
Amount outstanding on your mortgage:
€295,000 @ €2,300 per month
What interest rate are you paying?
2.5%, 3 yr fixed with 12.5 years left on the term
Other borrowings – car loans/personal loans etc
None, except rental property below
Do you pay off your full credit card balance each month?
Yes
Savings and investments:
Combined €340k in savings accounts <1% interest
Do you have a pension scheme?
Me - 15% employer contributes + 25% AVCs - Estimated pension at 65 is 70K per year
Spouse - Public sector contribution + 600 per month in AVC - Estimated pension at 65 is 30K per year
Do you own any investment or other property?
Own a rental property worth €290k with a mortgage of approx. €160k. The rental income is €1,600 a month and the mortgage is around €910/month + €220/month in management fees. 15 years remain on mortgage. Tracker ECB + 0.6%
Ages of children: 6 & 9
Life insurance: Mortgage protection only on both policies
As our savings are accumulating and not earning any interest, we're planning to make some changes. We're also starting to think about retirement and life cover. This is what we are thinking at the moment.
* Pay 200K off primary residence mortgage now. As we are locked into a 3yr fixed rate mortgage with PTSB (with 2.5 years left on fixed term), we cannot alter payments now but we can deposit the a lump sum to the mortgage account as a credit. In 2.5 years, they will adjust the balance accordingly and by our estimate, we'll only have 1 year left and will save ourselves 45K in interest.
* I have a Death in Service Benefit of x4 times salary + spousal annuity. Not sure of public service Death in Service Benefit so considering take out a life insurance policy for 15 years for 500K
* My spouse is not maxing out his AVCs so I thought we should increase these. However a financial advisor said this was not tax efficient and that we should invest in a managed fund instead, with with 1.5% management fees.
* Keep the apartment as the interest rate is low and hoping it will be an extra income in retirement.
* As we need to replace cars in the next 5 years and do some home improvements, we're planning to keep 150K on deposit, though possibly put some in a bond.
Questions, does the plan above make sense? Should we increase the AVCs or invest in a managed account. Does it still make sense to deposit that lump sum to mortgage? We could pay it all off now but there will be breakage fees and it would consume the bulk of our savings. Does it make sense to keep the apartment?
Ideally I would like to retire in 15 years at 61. My spouse plans to work until 65.
Many thanks.
Spouse’s/Partner's age: 50
Annual gross income from employment or profession
€101k + 20-25% Bonus - Private Sector
Annual gross income of spouse
€90k - Public Sector
Combined monthly take-home pay Net
€7,600
Type of employment
See above
In general are you
(a) spending more than you earn?
No
(b) saving?
We’re saving around €1,000 a month now in a regular saver plus I save most of my annual bonus.
Rough estimate of value of home
€850,000
Amount outstanding on your mortgage:
€295,000 @ €2,300 per month
What interest rate are you paying?
2.5%, 3 yr fixed with 12.5 years left on the term
Other borrowings – car loans/personal loans etc
None, except rental property below
Do you pay off your full credit card balance each month?
Yes
Savings and investments:
Combined €340k in savings accounts <1% interest
Do you have a pension scheme?
Me - 15% employer contributes + 25% AVCs - Estimated pension at 65 is 70K per year
Spouse - Public sector contribution + 600 per month in AVC - Estimated pension at 65 is 30K per year
Do you own any investment or other property?
Own a rental property worth €290k with a mortgage of approx. €160k. The rental income is €1,600 a month and the mortgage is around €910/month + €220/month in management fees. 15 years remain on mortgage. Tracker ECB + 0.6%
Ages of children: 6 & 9
Life insurance: Mortgage protection only on both policies
As our savings are accumulating and not earning any interest, we're planning to make some changes. We're also starting to think about retirement and life cover. This is what we are thinking at the moment.
* Pay 200K off primary residence mortgage now. As we are locked into a 3yr fixed rate mortgage with PTSB (with 2.5 years left on fixed term), we cannot alter payments now but we can deposit the a lump sum to the mortgage account as a credit. In 2.5 years, they will adjust the balance accordingly and by our estimate, we'll only have 1 year left and will save ourselves 45K in interest.
* I have a Death in Service Benefit of x4 times salary + spousal annuity. Not sure of public service Death in Service Benefit so considering take out a life insurance policy for 15 years for 500K
* My spouse is not maxing out his AVCs so I thought we should increase these. However a financial advisor said this was not tax efficient and that we should invest in a managed fund instead, with with 1.5% management fees.
* Keep the apartment as the interest rate is low and hoping it will be an extra income in retirement.
* As we need to replace cars in the next 5 years and do some home improvements, we're planning to keep 150K on deposit, though possibly put some in a bond.
Questions, does the plan above make sense? Should we increase the AVCs or invest in a managed account. Does it still make sense to deposit that lump sum to mortgage? We could pay it all off now but there will be breakage fees and it would consume the bulk of our savings. Does it make sense to keep the apartment?
Ideally I would like to retire in 15 years at 61. My spouse plans to work until 65.
Many thanks.