Aged 50 - Need general financial and pension advice

O

OrpSpring

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Personal details
Age: 50
Spouse’s/Partner's age: 48
Number and age of children: 3 kids all in Secondary school so college costs looming.

Income and expenditure
Annual gross income from employment or profession: 71,000 (New Public Servant after 20 years in private sector)
Annual gross income of spouse: 45,000 (Private Sector PAYE)
I think we are saving monthly.

Summary of Assets and Liabilities
Savings in Bank = 50,000 (Redundancy bumped up savings)

Family home worth €400k with a €120k mortgage.

2 small cars. 2015 & 2018.

Family home mortgage information
AIB
Mortgage remaining 120k.
1,200 repayment per month. Tracker + 0.75%

Other borrowings – car loans/personal loans etc

No other loans or credit card debts.

Other savings and investments:
Savings in BOI Investment Account = 20,000 (losing money, cannot touch for 3 more years)
My Private Pension 1 = 137,000 Contributions = 202,078 Retirement Account Value (Long Term Growth Fund)
My Private Pension 2 = 55,500 Contributions = 60,000 Retirement Account Value (Moderate Growth Portfolio)
Wife Private Pension = 62,000 Contribution = 95,000 Current Value
Wife pays 5% of salary + 500 AVC into her pension monthly - Employer contributes 10%

I have no AVCs now in public sector role but I would like to put some money into a PRSA or some much vehicle.

Other information which might be relevant

Life insurance: VHI, paid though my wife's employer.

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

I would like advice on how my pension situation looks and whether I should start putting AVCs into a private pension scheme instead of my wife paying AVCs on a lower salary.

I would also like advice on what to do with my mortgage - should I throw a portion of my savings into it.
 
OrpSpring said:
Savings in BOI Investment Account = 20,000 (losing money, cannot touch for 3 more years)
Click to expand...

What exactly is this and why can't you touch it?

It sounds as if it would be much better off invested in your mortgage at 3.25% tax-free.

If it's an investment subject to CGT and there are unrealised losses, then it might be worth holding onto until it recovers to a price which eliminates the losses.
 
I think that the priority over the next few years is to clear your mortgage and pay for your kids' education.

While your pension funds are a bit light, they are not too bad. So I would not advise putting more money in now, which you won't be able to access until you retire.

So clear your mortgage. Get the kids education paid for or prefunded. Then max your pension contributions.

Brendan
 
Thanks Brendan.

I have this investment policy with BOI. I invest 500 a month and it's split between 2 funds (Income & Growth Fund S4 and PRIME 4 S4B). I have invested 500 more than it's worth today. There are early encashment charges of 600 quid too. I need to stop contributing to it or change the funds. I believe I need to keep the money there for 5 years in total. I will call them to find out the terms. It was really for college costs.

On the pension, why would you consider my funds a bit light? Where should we be on average?

I will certainly throw some more savings into the mortgage.
 
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