Age: 37, 160k Mortgage, 75K Pension

[Bedfordrow22]

Personal details

Age: 37
Spouse’s/Partner's age: 37
Number and age of children: x2 pre-schoolers


Income and expenditure
Annual gross income from employment or profession: €90k
Annual gross income of spouse: €55

Monthly take-home pay: €6.5k
Type of employment: Aviation
Spouse: Teacher

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving like the clappers and paying down debt and loading my Pension


Summary of Assets and Liabilities
Family home worth €385k with a €160k mortgage
Savings of €28k
Private Pension fund: €75k

Family home mortgage information
Lender: KBC
Interest rate: 2.25%
Fixed until early 2023.
12 Years Left
Monthly payment is €1400

Other borrowings – car loans/personal loans etc
No other borrowings.
Rarely use credit card and always pay off immediately

Buy to let properties
None

Other savings and investments:
Shares, bonds and cash

Other information which might be relevant
We both are well covered through personal & health insurance and life insurances


What specific question do you have or what issues are of concern to you?
I am loading up my pension by paying an additional €1100 a month (Only costing me €660 net)

Questions

1. Hoping to have the mortgage cleared by the time I'm 45. Should have some good disposable income then. What should i do with the extra income?
Property (borrow?) / AVC?? / Invest

2. Also my wife is thinking about taking a long career break. Do I get all her Tax Credits if she is not working?

 

[cremeegg]

Wha ?

Personal details


Saving like the clappers

and paying down debt

I am loading up my pension by paying an additional €1100 a month (Only costing me €660 net)

1. Hoping to have the mortgage cleared by the time I'm 45.

Should have some good disposable income then.

2. Also my wife is thinking about taking a long career break. Do I get all her Tax Credits if she is not working?

 

[Blackrock1]

Personal details

Age: 37
Spouse’s/Partner's age: 37
Number and age of children: x2 pre-schoolers


Income and expenditure
Annual gross income from employment or profession: €90k
Annual gross income of spouse: €55

Monthly take-home pay: €6.5k
Type of employment: Aviation
Spouse: Teacher

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving like the clappers and paying down debt and loading my Pension


Summary of Assets and Liabilities
Family home worth €385k with a €160k mortgage
Savings of €28k
Private Pension fund: €75k

Family home mortgage information
Lender: KBC
Interest rate: 2.25%
Fixed until early 2023.
12 Years Left
Monthly payment is €1400

Other borrowings – car loans/personal loans etc
No other borrowings.
Rarely use credit card and always pay off immediately

Buy to let properties
None

Other savings and investments:
Shares, bonds and cash

Other information which might be relevant
We both are well covered through personal & health insurance and life insurances


What specific question do you have or what issues are of concern to you?
I am loading up my pension by paying an additional €1100 a month (Only costing me €660 net)

Questions

1. Hoping to have the mortgage cleared by the time I'm 45. Should have some good disposable income then. What should i do with the extra income?
Property (borrow?) / AVC?? / Invest

2. Also my wife is thinking about taking a long career break. Do I get all her Tax Credits if she is not working?

If your wife isn’t working then she isn’t getting tax credits.

 

[AAAContributor]

Do I get all her Tax Credits if she is not working?

Your wife's employee tax credit of €1,700 would be nil if she gives up work but the Home Carer Credit of €1,600 could be available if you are jointly assessed for tax.

Currently as a married couple with two earners in employment, €73,600 of your income is taxed at the 20% rate. If your wife gives up work, €45,800 of income will be taxed at 20% with the balance at the higher rate.

 

[Brendan Burgess]

Savings of €28k

€160k mortgage

1. Hoping to have the mortgage cleared by the time I'm 45.

1. Hoping to have the mortgage cleared by the time I'm 45. Should have some good disposable income then. What should i do with the extra income?

You are 37. Are you asking us now what you should do in 8 years?
You seem to be doing most things correctly. Paying down your mortgage and contributing to a pension fund.

You don't need the €28k savings, so you should pay that off your mortgage.
With both of you working and "saving like the clappers" then you can afford whatever a rainy day throws at you.

 

[Brendan Burgess]

Lender: KBC
Interest rate: 2.25%
Fixed until early 2023.

This is the main thing you need to address.

Your mortgage is moving to Bank of Ireland and you will be hit by their predatory lending rates when your fixed rate expires.

1) Pay the savings off your mortgage
2) Fix the balance for 5 years at 2.4%

You may face a small break fee for paying down the existing fixed rate early, but I doubt it will be much, and may well be zero.

Brendan