Moneymakeover 36 year old civil servant living at home

T

tripkaedama

Registered User
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12
Hi folks

I was hoping to get peoples insights into my situation and if there's anything I could be doing better.

Personal details

Your age: 36
Status: Single
Kids: None

Income and expenditure
Annual gross income from employment or profession: €84,475

Fortnightly take-home pay: €2,000
Monthly take-home pay: €4,333 roughly

Type of employment: Employee
Employer type: Civil Servant Post-2013

In general are you:
I save aggressively I would say. I max out my AVCs and put money into savings and investments each month.


Summary of Assets and Liabilities

Cash: €13,500
Savings: €16,000
Investments: €4,100
Pension: €54,000

Total net assets: €87,600

Other borrowings – car loans/personal loans etc

BOI Credit Card
Do you pay off your full credit card balance each month? 100% direct debit each month.

Pension information

Value of pension fund: €54,000
Forsa AVC with Irish life. I think this is in their default investment strategy.

Other savings and investments:
€16,000 in BOI Supersaver (€2,500 a month)
€4,100 in Zurich Prisma 5 (€800 a month)
€13,500 in Credit Union (will be using this for my AVCs shortly)

What specific question do you have or what issues are of concern to you?

I'm concerned about a few things.

1) My AVCs

These are with cornmarket/irish life and I do a lump sum contribution each year to max out my tax relief on this. I get charged 4% for this and my AMC appears to be 1% so I'm not sure i'm benefiting from their tiered structure but I've emailed them for clarification. I like the flexibility doing a lump sum gives me but I don't really like paying 4% for the privilege of it. Are there better options for this? I've seen execution only stuff spoken about with Royal London, Zurich or Standard Life with 100% allocation and 0.6% - 0.75% and possibly even lower depending on the amount in the fund.

I'm in the Single Pension Scheme and if I stay at my current grade I'll be on €100k - €110k in 10 years or so not accounting for pay deals along the way. Am I at risk of over-contributing to my AVC if I continue to max it out alongside the SPS? My understanding is that no matter what I can only get 1.5x my salary as a lump sum so having a big separate pension pot won't allow me to get more out above that 1.5x and i'll just be drawing it down via an arf or purchasing an annuity.

2) Savings vs investing

I'm putting my savings into BOI as it's 3% on this account and I'm investing separately with Zurich. Is there better out there? I set this up after a consultation with cornmarket and they get 1% for the first year and then after that get nothing from me is my understanding. I don't really have any goal as such except well it's better that my money is doing something over sitting idle.

3) Property

I'm not really in a position with the money I have to buy something in my local area. I'm happy enough living at home and realistically my long term plan is that i'll be buying the family home down the line. This could change of course if I meet someone but for now buying property isn't really on my radar.
 
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So your strategic objective should be to be in a position where you can buy your own home.

So stop making AVCs until after you have bought a house.

Tactically, you need to be in a position to move quickly if something does come up. So avoid any savings products which you can't cash instantly.

You should invest your savings in the stock market. You are investing for the medium to long term so that is the area which will should give you the best long-term returns.

When you find yourself in a position to buy a house within 12 months, then you should switch from the stockmarket to cash.
 
tripkaedama said:
I'm putting my savings into BOI as it's 3% on this account and I'm investing separately with Zurich. Is there better out there? I set this up after a consultation with cornmarket and they get 1% for the first year and then after that get nothing from me is my understanding
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You might get a better deal here.
Your contributions are paid directly to Zurich.
There is no risk to your money as the broker never has access.

Invest And Save | Zurich Life Savings Plan | Republic of Ireland

Zurich Life Savings Zurich Life Child Savings Zurich Life Investments Low Cost Prisma Funds www.InvestAndSave.ie
www.investandsave.ie www.investandsave.ie
 
tripkaedama said:
I'm not really in a position with the money I have to buy something in my local area. I'm happy enough living at home and realistically my long term plan is that i'll be buying the family home down the line. This could change of course if I meet someone but for now buying property isn't really on my radar.
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Are you an only child? Why would you want to purchase the family home? Given your age that might be fanciful. Why not buy a home now? You’ve permanent employment, 33k in savings etc.

If you’re an only child you’ll eventually probably inherit, unless there are medical and care home costs, mean while you should be aiming to increase wealth.
 
Bronte said:
If you’re an only child you’ll eventually probably inherit, unless there are medical and care home costs, mean while you should be aiming to increase wealth.
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Agreed - and if there are nursing home costs etc then the family house may not exist anymore to inherit/live in
 
Persia said:
Savings seem light to me @ circa 33k, considering you've been living at home for quite a while?

You dont have outgoings like rent or car loan so maybe I'm missing something?
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Moved home after losing my job. Was out of work for a few years and then started out at a low paying job before working my way up to where I am now. I had outstanding debts that needed paying off before I could get serious about saving.

My outgoings are:
Rent €250 a fortnight
Health insurance: €100 a month
Phone: €15 a month

Are you an only child? Why would you want to purchase the family home? Given your age that might be fanciful. Why not buy a home now? You’ve permanent employment, 33k in savings etc.
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I've 2 siblings.

I view my situation as being lucky to have a good relationship with my parents and I can live here and save towards getting my own place should I choose to do so. With what I currently have my options for getting somewhere are limited and not something that I'm interested in pursuing.

I take your points re: the fair deal scheme as something that might happen down the line.
 
tripkaedama said:
Moved home after losing my job. Was out of work for a few years and then started out at a low paying job before working my way up to where I am now. I had outstanding debts that needed paying off before I could get serious about saving.
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Well done, shows grit and that is worth its weight in gold.

No idea of your relationship with your siblings but imagine its at the back of their mind that they too will inherit (hopefully many years from now).

I would always caution on expected inheritance and planning financial futures based on that expectation, seen several cases where it just did not happen, so I'd plan without it.

If it were me I'd save toward the goal of a deposit and mortgage.

I will never be able to afford to live where I grew up, perhaps if I won the lotto however I live in a very nice area and am happy with it.
 
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Persia said:
If it were me I'd save toward the goal of a deposit and mortgage.

I will never be able to afford to live where I grew up, perhaps if I won the lotto however I live in a very nice area and am happy with it.
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I would also focus on getting mortgage ready and my own place. Considering your age, buying your parents home could be over 2 decades away, apart if they have a clear plan to downsize. Do you plan to live with them for the next two decades?
Your parents home could be out of your budget, now and then. It's probably a family home, well located as you mentioned you would not be able to afford something in this area.
You also have siblings who could have their own ideas about the house.
 
Persia said:
I would always caution on expected inheritance and planning financial futures based on that expectation, seen several cases where it just did not happen, so I'd plan without it.
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I agree. And in the current situation, it could realistically be a couple of decades away. Life is short and for living, I know some relation who lived in the hope of being sorted financially thanks to inheritance. They unfortunately ended up needing nursing home care and their parents are still alive and well.
 
tripkaedama said:
I've 2 siblings.

I view my situation as being lucky to have a good relationship with my parents and I can live here and save towards getting my own place should I choose to do so. With what I currently have my options for getting somewhere are limited and not something that I'm interested in pursuing.

I take your points re: the fair deal scheme as something that might happen down the line.
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You’re not thinking this thru. The only limits I see are the ones you’re putting on yourself. Especially on your assumptions.

4333-2500-800=1033

1033 - 541 rent =492 less health/phone 115 = 377. Leaves 87 a week. Something wrong with the figures. Presumably parents are paying food and utilities too.

2500+800+541 =3.841 that’s mortgage money.

Let the figures do the talking. Plus siblings will wake up at some stage.
 
Hard to separate financial advice from life advice but 36 on good money and planning on staying “home” for life is an unusual life choice.

I guess if it’s what you want it’s about buying your siblings out.

If you plan on staying at home then I imagine they will expect you take on a good share of any care your parents may need.

(On a side note I always find the reference to living at “home” odd. Where else would people life but at home?! For example I live at home with my wife and child.)
 
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