timeoflife
New Member
- Messages
- 3
Personal details
Your age: 61
Your spouse's age: 72
Number and age of children: One daughter, aged 24 (living at home, recently returned to college after a gap)
Income and expenditure
Annual gross income from employment or profession: €78,000 salary
Annual gross income of spouse/partner: €30,000 pension (State contributory plus small employment pension - annuity)
Monthly take-home pay: c.€5,000 (joint)
(I'm contributing max AVCs)
Type of employment - Employee and retired
Employer type: Private company (me currently and spouse in the past)
In general we are: Saving
Monthly outgoings: average €3,500
Summary of Assets and Liabilities
Family home value: about €1m (ordinary home, but Dublin prices and a good location)
Mortgage on family home: None (finished mortgage)
Net equity: €1m
Cash: €350,000 in savings (aside from emergency fund and money set aside for daughter's college etc).
Savings mainly in Post Office / NTMA products (certs and bonds, no great gains, but it's tax free, and presumably safe) and some in variety of bank savings accounts (fixed, instalment, or general savings accounts - even the best interest rates are lousy, and then it is taxed).
My Defined Contribution pension fund: €645k plus two smaller funds from previous employment, worth about €95k together.
Spouse in receipt of pension already.
Company shares : None
Buy to Let Property value: None
Buy to let Mortgage: None
Total net assets: €1,350k, including family home but not including my pension pot.
Family home mortgage information
N/A (mortgage finished. own home outright.)
Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? Yes
No loans outstanding.
Pension information
Value of pension fund:
My DC pension fund with employer: €645k, with .4% management fee. In Irish Life "lifestyling", mix of maps funds, which automatically moves more money into cash towards retirement age. Currently about 60% of the fund is in risk level 3 maps, and 30% in risk level 4.
I also have two smaller older funds, worth about €95k together. One is a PRB, the other is with Equitable Life (Irish entity, after UK company turmoil), and is in an "Irish Managed Fund" with management fees .75%. I think I should be trying to maximise gains in these 2 smaller funds at least. I need to find out more about the Equitable Life fund choices. I will eventually put them into an Arf I suppose but I don't need to do so yet.
Buy to let properties
N/A (Have none.)
Other savings and investments:
Cash: €350,000 savings (plus emergency fund and money set aside for college etc). In Post Office / NTMA and bank savings (as above).
Other information which might be relevant
Life insurance: None other than through work (it will cease on departure). I do not see this as a priority or necessary as finances are ok.
I am leaving my job before normal retirement age, with a redundancy package (net after tax around €120k). I will probably continue to work (not immediately) but a fulltime job is not likely I'd say.
I have in mind living on the redundancy package until normal retirement age, when I will draw down private pension and receive contributory state pension. At this point or whenever I draw down pension fund, I imagine I will split the pot, between Arf and smaller annuity (unless annuities rates are terrible again at that stage).
If I need to draw pension down before normal retirement age, I can do so. But if I do not need to draw it down, I would leave my pension pot to grow, hopefully, so that it is healthier by NRA. Obviously in this volatile world there is some risk in this.
If all goes well with life and health, I do not intend to scrimp (on travel, living, house improvements) etc over the next decade, but enjoy that time, using the money I have earned (through hard work, and luck - because of the generation I was born into. I am acutely aware that our daughter's generation is not as lucky, principally because of housing).
Over the next few years I may pick up some consultancy work or other activities, but it unlikely to be fulltime or pay well. Spouse has pension, and as well as my redundancy, we have savings I can use, or indeed I could draw down pension earlier if I need it, or if the outlook is favourable or it makes financial sense. (I will have to pay more attention to financial markets and stocks now I suppose, whether I want to or not, to judge whether /when to draw down pension).
I am a little short of paid contributions (about 70-80 contributions short) for full state pension but will sign on for credits straight away, and which will bring me comfortably up to full stamps for state pension aged 66.
I could probably claim pay related jobseekers benefit, after the required post-redundancy gap, which would be mainly in 2026 (which would also be more tax efficient).
I may be eligible for the age 65 benefit later, in the year before state pension. Obviously I don't know yet if I will have paid contributions in my Governing Contribution Year, but I plan to at least have credited contributions for that year, and I will have plenty (over 30) of paid class A contributions in the calendar year of my 61st birthday, two years before my GCY. I think from looking at Revenue site and previous informative advice here on Askaboutmoney, that this may qualify me for the 65 benefit year. I may be wrong in working this out re the 65 benefit. And of course the rules could change by then too.
Our daughter has had a tough time over the past few years for various reasons, but she is doing well now. We are very happy to support her financially and otherwise through college, and hope to share some advantage with her. We have gifted her €6,000 a year several times (€3,000 each, small gift exemption), which she has mostly saved. She is a good person, has not been spoiled and works hard. She does not have a sense of entitlement.
Between redundancy and spouse's pension, and with mortgage paid off, I think I am in a reasonable position to live well, even if I don't get much work over the next few years. I am aware we have been lucky in various ways, but we've also worked hard and been responsible. Am I being overly optimistic?
What specific question do you have or what issues are of concern to you?
This site is amazing and has very well informed members. I appreciate any observations or advice about my situation.
1. How to manage savings better?
I am aware that it is foolish to have large savings in PO/bank, where they are effectively losing value due to inflation. Presumably it would make more sense to invest some of the money, but I have not done anything about this over the years, for several reasons: Lethargy. Confusion and ignorance of the different kinds of investments (I've never explored what WFTs or mutuals or tracking funds or whatever, are - I should do some homework on AAM!) or how to go about choosing them. Not wishing my savings to go up in flames as investments (even "safe" bank stocks) did during the crash. The high rates of exit tax in Ireland. The way management fees eat away at funds. And a general scepticism regarding the financial industry (sorry!). All these have, I suppose, stopped us making the most of savings as we went along, while income has been greater than outgoings. (I feel we have been unwise about this.)
Given the above, can anyone suggest what we should consider doing with our savings? I will definitely spend some down, including on home renovations, but I could "do something" with, say, at least €200k, where it might grow safely. We have emergency money separately. Unless we run out of funds and have to draw on these savings too, we would hope to leave or gift some money (or investments if I "do something" with them), to my daughter, nieces/nephews, organisations I respect. Can we do this tax efficiently (for them)?
Or maybe at this stage I may as well just leave it in the PO/banks and hope inflation slows down.
2. What to do with redundancy sum?
My simplistic approach to using my redundancy after-tax sum is to drip feed it into my current account over the next few years, as "income" to live on.
Is there a better way of handling this, to make the most of it?
Investing it in a fund of some sort (what kind?), which I could draw from as needed, could potentially preserve some of capital, but would involve all the downsides mentioned above?
Putting it into my pension fund now does not make sense to me (it would be putting after-tax money into a pension fund only to have tax levied on drawdown) - am I right?
Or maybe there are some methods of investing that allow some growth without massive risk, and without losing a big portion of the gains to taxation and management fees?
Investing it in property now at the height of the market would not be a good move I imagine.
3. Family home inheritance down the line:
Additionally, in the background, inheritance tax down the line will be a downside, given the crazy house price increase over the past few decades. When we bought our home (with a mortgage) many years ago, it cost well below the inheritance tax threshold for Group A, children. But because successive government policies have screwed up housing in lots of ways, when we die and leave our family home to our only child, the value will be way above the threshold, and I'd imagine she'll have to sell it to pay the inheritance tax, on a home paid for with after-tax income.
I get the policy thinking on the unfairness of inherited wealth, but this is an ordinary enough family home not a mansion, in the unlucky position of an overheated housing market and with a solo child. Should we be considering a trust or something like that for the house, to make it feasible to pass it on to her? I'm aware there are downsides to adding her to the deeds as co-owner.
Thank you to the Askaboutmoney community in advance for any advice.
Your age: 61
Your spouse's age: 72
Number and age of children: One daughter, aged 24 (living at home, recently returned to college after a gap)
Income and expenditure
Annual gross income from employment or profession: €78,000 salary
Annual gross income of spouse/partner: €30,000 pension (State contributory plus small employment pension - annuity)
Monthly take-home pay: c.€5,000 (joint)
(I'm contributing max AVCs)
Type of employment - Employee and retired
Employer type: Private company (me currently and spouse in the past)
In general we are: Saving
Monthly outgoings: average €3,500
Summary of Assets and Liabilities
Family home value: about €1m (ordinary home, but Dublin prices and a good location)
Mortgage on family home: None (finished mortgage)
Net equity: €1m
Cash: €350,000 in savings (aside from emergency fund and money set aside for daughter's college etc).
Savings mainly in Post Office / NTMA products (certs and bonds, no great gains, but it's tax free, and presumably safe) and some in variety of bank savings accounts (fixed, instalment, or general savings accounts - even the best interest rates are lousy, and then it is taxed).
My Defined Contribution pension fund: €645k plus two smaller funds from previous employment, worth about €95k together.
Spouse in receipt of pension already.
Company shares : None
Buy to Let Property value: None
Buy to let Mortgage: None
Total net assets: €1,350k, including family home but not including my pension pot.
Family home mortgage information
N/A (mortgage finished. own home outright.)
Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? Yes
No loans outstanding.
Pension information
Value of pension fund:
My DC pension fund with employer: €645k, with .4% management fee. In Irish Life "lifestyling", mix of maps funds, which automatically moves more money into cash towards retirement age. Currently about 60% of the fund is in risk level 3 maps, and 30% in risk level 4.
I also have two smaller older funds, worth about €95k together. One is a PRB, the other is with Equitable Life (Irish entity, after UK company turmoil), and is in an "Irish Managed Fund" with management fees .75%. I think I should be trying to maximise gains in these 2 smaller funds at least. I need to find out more about the Equitable Life fund choices. I will eventually put them into an Arf I suppose but I don't need to do so yet.
Buy to let properties
N/A (Have none.)
Other savings and investments:
Cash: €350,000 savings (plus emergency fund and money set aside for college etc). In Post Office / NTMA and bank savings (as above).
Other information which might be relevant
Life insurance: None other than through work (it will cease on departure). I do not see this as a priority or necessary as finances are ok.
I am leaving my job before normal retirement age, with a redundancy package (net after tax around €120k). I will probably continue to work (not immediately) but a fulltime job is not likely I'd say.
I have in mind living on the redundancy package until normal retirement age, when I will draw down private pension and receive contributory state pension. At this point or whenever I draw down pension fund, I imagine I will split the pot, between Arf and smaller annuity (unless annuities rates are terrible again at that stage).
If I need to draw pension down before normal retirement age, I can do so. But if I do not need to draw it down, I would leave my pension pot to grow, hopefully, so that it is healthier by NRA. Obviously in this volatile world there is some risk in this.
If all goes well with life and health, I do not intend to scrimp (on travel, living, house improvements) etc over the next decade, but enjoy that time, using the money I have earned (through hard work, and luck - because of the generation I was born into. I am acutely aware that our daughter's generation is not as lucky, principally because of housing).
Over the next few years I may pick up some consultancy work or other activities, but it unlikely to be fulltime or pay well. Spouse has pension, and as well as my redundancy, we have savings I can use, or indeed I could draw down pension earlier if I need it, or if the outlook is favourable or it makes financial sense. (I will have to pay more attention to financial markets and stocks now I suppose, whether I want to or not, to judge whether /when to draw down pension).
I am a little short of paid contributions (about 70-80 contributions short) for full state pension but will sign on for credits straight away, and which will bring me comfortably up to full stamps for state pension aged 66.
I could probably claim pay related jobseekers benefit, after the required post-redundancy gap, which would be mainly in 2026 (which would also be more tax efficient).
I may be eligible for the age 65 benefit later, in the year before state pension. Obviously I don't know yet if I will have paid contributions in my Governing Contribution Year, but I plan to at least have credited contributions for that year, and I will have plenty (over 30) of paid class A contributions in the calendar year of my 61st birthday, two years before my GCY. I think from looking at Revenue site and previous informative advice here on Askaboutmoney, that this may qualify me for the 65 benefit year. I may be wrong in working this out re the 65 benefit. And of course the rules could change by then too.
Our daughter has had a tough time over the past few years for various reasons, but she is doing well now. We are very happy to support her financially and otherwise through college, and hope to share some advantage with her. We have gifted her €6,000 a year several times (€3,000 each, small gift exemption), which she has mostly saved. She is a good person, has not been spoiled and works hard. She does not have a sense of entitlement.
Between redundancy and spouse's pension, and with mortgage paid off, I think I am in a reasonable position to live well, even if I don't get much work over the next few years. I am aware we have been lucky in various ways, but we've also worked hard and been responsible. Am I being overly optimistic?
What specific question do you have or what issues are of concern to you?
This site is amazing and has very well informed members. I appreciate any observations or advice about my situation.
1. How to manage savings better?
I am aware that it is foolish to have large savings in PO/bank, where they are effectively losing value due to inflation. Presumably it would make more sense to invest some of the money, but I have not done anything about this over the years, for several reasons: Lethargy. Confusion and ignorance of the different kinds of investments (I've never explored what WFTs or mutuals or tracking funds or whatever, are - I should do some homework on AAM!) or how to go about choosing them. Not wishing my savings to go up in flames as investments (even "safe" bank stocks) did during the crash. The high rates of exit tax in Ireland. The way management fees eat away at funds. And a general scepticism regarding the financial industry (sorry!). All these have, I suppose, stopped us making the most of savings as we went along, while income has been greater than outgoings. (I feel we have been unwise about this.)
Given the above, can anyone suggest what we should consider doing with our savings? I will definitely spend some down, including on home renovations, but I could "do something" with, say, at least €200k, where it might grow safely. We have emergency money separately. Unless we run out of funds and have to draw on these savings too, we would hope to leave or gift some money (or investments if I "do something" with them), to my daughter, nieces/nephews, organisations I respect. Can we do this tax efficiently (for them)?
Or maybe at this stage I may as well just leave it in the PO/banks and hope inflation slows down.
2. What to do with redundancy sum?
My simplistic approach to using my redundancy after-tax sum is to drip feed it into my current account over the next few years, as "income" to live on.
Is there a better way of handling this, to make the most of it?
Investing it in a fund of some sort (what kind?), which I could draw from as needed, could potentially preserve some of capital, but would involve all the downsides mentioned above?
Putting it into my pension fund now does not make sense to me (it would be putting after-tax money into a pension fund only to have tax levied on drawdown) - am I right?
Or maybe there are some methods of investing that allow some growth without massive risk, and without losing a big portion of the gains to taxation and management fees?
Investing it in property now at the height of the market would not be a good move I imagine.
3. Family home inheritance down the line:
Additionally, in the background, inheritance tax down the line will be a downside, given the crazy house price increase over the past few decades. When we bought our home (with a mortgage) many years ago, it cost well below the inheritance tax threshold for Group A, children. But because successive government policies have screwed up housing in lots of ways, when we die and leave our family home to our only child, the value will be way above the threshold, and I'd imagine she'll have to sell it to pay the inheritance tax, on a home paid for with after-tax income.
I get the policy thinking on the unfairness of inherited wealth, but this is an ordinary enough family home not a mansion, in the unlucky position of an overheated housing market and with a solo child. Should we be considering a trust or something like that for the house, to make it feasible to pass it on to her? I'm aware there are downsides to adding her to the deeds as co-owner.
Thank you to the Askaboutmoney community in advance for any advice.
