Moneymakeover Catch-up mode or already fine? Sanity check wanted (late 40s couple, no kids)

[StepByStep]

Your age: 46
Your spouse's age: 48
Number and age of children: No children


Income and expenditure,
Annual gross income from employment or profession: €81,463
Annual gross income of spouse/partner: €102,000 plus bonus (this year was €12k, but varies)
Monthly take-home pay: €8,373 (after pension contributions; I contribute 1017, my spouse contributes 1423)
Rent a room income: €5,400 (€600/month for academic year)

Type of employment: Both employees in private sector

In general we are saving a little (€1000/month into AIB regular saver)


Summary of Assets and Liabilities
Family home value: Estimated €470k (purchased for €358k in 2022)

Mortgage on family home: €198,500 remaining

Net equity: €271,200

Cash: €33,400 (emergency fund of ~€28k, remaining building up will be used to max each of our pension contributions; ~€15k in AIB fixed term deposit account on 3% AER, €15k in revolut savings 1.5%; remainder building in AIB regular saver, adding €1000/month; planning to move cash to MoCo account or equivalent to get best interest rate)

Defined Contribution pension fund: Between both of us we have €341k in pension pot. (I have ~€50k in Ireland and ~€70k in UK pensions as I worked there for a long time); spouse has ~€120k in Ireland and ~€101k in UK pensions)

Company shares : None
Buy to Let Property value: N/A
Buy to let Mortgage: N/A

Total net assets: €645,600


Family home mortgage information
Lender: ICS
Interest rate: 2.1%
Type of interest rate: Fixed for 5 years
If fixed, what is the term remaining of the fixed rate: 14 months
Remaining term: 12 years 2 months
Monthly repayment: €1735 (this is an overpayment of €150)

Other borrowings – car loans/personal loans etc
Car loan: €6k borrowed in Nov 2025 for ‘new’ car which cost €25k (balance was paid with cash). Balance on loan is €5387

Do you pay off your full credit card balance each month? N/A
If not, what is the balance on your credit card? N/A

Pension information
Value of pension fund: €341k between us


Other savings and investments:
Started in February this year contributing €100/month into an ETF (Vanguard FTSE All-World Acc UCITS) as an experiment to learn/understand more about investing (I understand the 8-year deemed disposal tax)


Other information which might be relevant

Life insurance: Both of us are covered for €258k for the term of the mortgage.

Have a spare room to rent, and this year started renting out to a student for €600/month for academic year

We have covered pensions gaps in the UK (which we left in 2020) and plan to continue to do so which should qualify me for the full UK state pension (spouse should get a good amount too but might not qualify for full). We won’t qualify for full state Irish pension due to time spent abroad, but if we continue to contribute we estimate that we will qualify for €11k each.




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

Are we actually behind—or misreading our position?
On paper we have ~€650k net assets and strong income, but it doesn’t feel like enough. Are we underestimating our position, or genuinely late?

Pension vs mortgage – what would you prioritise in our exact position?
Mortgage: 2.1% fixed (14 months left), 12 years remaining. We could overpay significantly; we don’t max our pension contributions with our standard monthly contributions, but last year contributed single premium AVCs to max and were planning on doing so again as long as we can afford this. Instinct says pensions (tax relief), but psychologically the mortgage looms large. Curious what others would do and why.

What pension pot actually supports €70k net in retirement?
We’ve seen very different rules of thumb
Are we: broadly on track, slightly behind, materially behind

If you were us, what would you change in the next 3–5 years?
This is probably the most useful input - where are we suboptimal?

Career downshift – when is it realistically “safe”?
One of us would like to step back from a high-stress role.
At what point (assets / pension level) does that become a rational decision rather than a risky one?

 

[Clamball]

Take home pay €8373 pm
Mortgage €1735 pm
Car loan ?
Investing €100 pm
Savings €1000 pm

So you are spending over €5K per month on what? I can see why you want to have €70 K net per year in retirement to maintain this lifestyle.

Income in retirement
€22K from Irish State Pension
€14.5 K from uk pension for you and say €10K for spouse
So €46.5K ish from state pensions.

I think you need to focus on building your pension pots especially if you want to retire early. I see you maxed out your AVC’s last year so I would carry that on for as long as possible as I don’t think €341K will be enough to bridge the gap. Plus if you retire early you will need to bridge the gap between the retirement date and when you draw down the state pensions. Ye will be 58 and 60 when mortgage is paid off so do you plan to work until then or retire while still paying a mortgage. I personally would leave the mortgage alone and max the AVC, then keep projecting the growth and returns until you reach your €70K net.

I also don’t understand why you needed a car loan with cash savings?

 

[Premos]

So you are spending over €5K per month on what

The spending is closer to 6k considering the rent a room.
I would also work on maximising your pensions. I would organise it on a monthly basis as it would be a priority.

At what point (assets / pension level) does that become a rational decision rather than a risky one?

That really depends on the lifestyle you are looking for. While income is an important factor in such a decision, the level of spending is key.

 

[ClubMan]

What pension pot actually supports €70k net in retirement?

One very very rough rule of thumb might be a 4% drawdown rate.
€70K net for a married couple would be c. €84K or €42K gross each.
That implies c. €1M pension pots each after taking the respective tax free lump sums.
But I'm ignoring the state pensions here so smaller pension pots might suffice.
And it depends on how long you live, if you buy an annuity rather than investing in an ARF, the performance of the ARF if you choose that option, etc.

I'm curious as to how you came up with the €70K net figure.

 

[Protocol]

On paper we have ~€650k net assets and strong income, but it doesn’t feel like enough. Are we underestimating our position, or genuinely late?

Your incomes are way ahead of average incomes, so you are grand.

 

[ClubMan]

What charges apply to your pensions and what are they invested in?

 

[Fortune]

I think your spending and general financial management should be looked at. It's hard to understand why you needed a car loan given your incomes, and even harder to understand why you will have it since you have €15k on deposit for 1.5%. As has been pointed out above, your spending seems to be excessive, particularly for someone who wants to retire early.

 

[Sarenco]

For a jointly assessed couple, €70k net of tax equates to around €85k gross.

So, if your various State pensions are projected to generate around €45k per annum, your pensions would need to generate another €40k per annum.

A combined pension pot of around €1m should do the trick.

As others have said, pay off the car loan, maximise your tax-relieved pension contributions and, if there’s anything left over, pay down your mortgage ahead of schedule.

You could keep your pensions 100% invested in global equity funds for the time being.

I would abandon the ETF experiment - it’s not going to move the dial and the tax calculations will be a PITA.

You’re in reasonable shape financially but you’ve a way to go yet.

Try to focus on the big ticket items - maximising your pension contributions and paying down debt.

With some discipline, you should be in a great position 10 years from now.

 

[_OkGo_]

Are we actually behind—or misreading our position?
On paper we have ~€650k net assets and strong income, but it doesn’t feel like enough. Are we underestimating our position, or genuinely late?

It depends... compared to the average for your age you are doing well.

However, if you were to compare to a more appropriate peer group (high earning, no kids couple) I think you are well behind where you should be.

Whether by design or just chance, your employment in the UK is a huge saving grace as it gives you a very comfortable baseline pension.

If you were us, what would you change in the next 3–5 years?
This is probably the most useful input - where are we suboptimal?

€70k net income requirement - you need to get a good handle on this. I would expect that the current figure is much higher if you factor in irregular spending such as cars. If you want to maintain lifestyle into retirement, your figure is probably €80k+

But equally, I imagine that your current net spend includes a lot of waste and unnecessary spending. Without impacting the quality of lifestyle you currently enjoy, you could probably knock several thousand off your spending habits with some simple budgeting and managing bills etc.

The obvious step is to start maxing your regular pension contributions. This is a very easy way to help you live within your means which are still very comfortable.

After pensions, use any additional funds to accelerate mortgage payments. Your mortgage is very comfortable right now so while I understand the psychological effect of paying it off early, it shouldn't be done at the expense of your pension. You have 12 years left, if you still clear it in 10 years or less that would be very comfortable

Career downshift – when is it realistically “safe”?
One of us would like to step back from a high-stress role.
At what point (assets / pension level) does that become a rational decision rather than a risky one?

This is a difficult one to answer. You haven't explicitly mentioned retiring early so if you both continue to work until mid 60's then I think you can reduce back to an income level that maintains your lifestyle in your late 50s once your pension funds are ~€1m mark.

However if you also plan to fully retire early, your pension fund needs to fill the gap between retiring and state pension so you need to think about this

If you were us, what would you change in the next 3–5 years?

Back to this point, all of the simple and obvious steps can be done in the next 1-3 months. You should not be waiting 3-5 years to make these changes.

Probably the most important thing for you to think about is what you see your retirement looking like. Do you value time freedom over monetary spending? Do you enjoy your work but just want to do a bit less of it?

 

[MrEarl]

Hello,

From what you've said, there's a lot of money unaccounted for, and presumably being spent on non essentials.

Have you ever conducted an exercise to see what you spend all of your income on, for a month, or two ? If not, you really should. It's easy to do, just maintain a list of all expenditure, then review it after the period and ask yourself did you really need to make that purchase.

As a starting point, here's what should be a very simple step forward for both of you, and you probably won't even notice it's impact...

increase each of your ongoing pension contributions or regular AVCs, by €200 (per person), per month. You should be able to do it through either your employers payroll, or your pension provider. It'll cost each of you about €100, per month, after tax, and be a positive step forward, in terms of early retirement. You can increase your pensions by more, later on, but try this, now and see how the next few months go...

 

[StepByStep]

Thanks all for the replies – really appreciate the time taken and the different perspectives. It has been helpful in challenging how we’re thinking about things.

A quick update first - this thread has already been useful
Going back through the numbers as a result of posting here, we realised we hadn't fully optimised how we're structuring our monthly pension contributions. My husband put his entire bonus this year into his pension, which means we can reduce his monthly contributions slightly and redirect that headroom to increase mine - effectively getting closer to both of us maxing out on a monthly basis rather than relying on a year-end top-up. To give some context on how we've been doing it: last year we made single premium AVC payments totalling €17k to max our 2024 contributions. We'll need to do something similar this year - around €12k - to cover 2025. But next year, with the bonus/restructured monthly contributions, we shouldn't need to do that. The bonus adds a complication since it varies year to year, so we'll need to sense-check the numbers annually rather than set and forget.

On the spending point:
A few people have flagged the headline spend figure, which is fair - it does look high without context. To be clear, we do have a detailed household budget and know exactly where everything goes. There are no real leaks or mystery outgoings. Our ~€7k/month spend covers: mortgage (€1,735 including overpayment), car loan repayment (€195), all utilities, fuel, insurance (life, home, car), grocery shopping (we prioritise quality here organic/local/Irish - not apologising for it, but it is a conscious choice, albeit an expensive one), gym/PT memberships, a small monthly medical buffer, sinking funds for car and property maintenance, inexpensive hobbies, family gifts (large extended family - lots of occasions), and a holiday provision. On holidays specifically - we budget for them, but in practice we go on roughly one 10-day European trip every couple of years and occasional long weekends away in Ireland. We do shop around on the things that are worth shopping around on - car insurance and energy providers annually, we have two entertainment subscriptions between us (Netflix and Spotify), and a budget SIM for me. Everything is accounted for, including smaller recurring costs like software subscriptions, estate management fees and so on. With all of that, I'd push back a little on the suggestions that there must be obvious waste to cut. I guess the question for us is more about whether our spending is appropriately prioritised given our longer-term goals, and that's exactly what we're now examining more deliberately.


On the car loan:
We pay back €195/month.

I also don’t understand why you needed a car loan with cash savings?

It's hard to understand why you needed a car loan given your incomes, and even harder to understand why you will have it since you have €15k on deposit for 1.5%.

I can see why it looks odd. It was a compromise - I would have preferred to pay cash, but my husband was keen to preserve a larger emergency fund given some significant health experiences in both our families that highlighted how unpredictable things can be.

On the €70k retirement figure and pension charges/investments:

€70k net income requirement - you need to get a good handle on this. I would expect that the current figure is much higher if you factor in irregular spending such as cars. If you want to maintain lifestyle into retirement, your figure is probably €80k+

You could keep your pensions 100% invested in global equity funds for the time being.

I'm curious as to how you came up with the €70K net figure.

What charges apply to your pensions and what are they invested in?

This was a rough estimate based on current spending – we took current take-home pay, removed mortgage, loan and savings, and added expected costs like health insurance (currently, both of our employers cover health insurance). With regard to charges, I'd need to dig a little to pull the full details together, but they are all standard DC occupational schemes. Last year, we went through them all and made sure they were invested in diversified global equity funds.

With regard to retirement timing, a few people noted, rightly, that the answer depends on what we actually mean by "stepping back" - and it's a fair question because we haven't fully resolved that ourselves. To clarify: this is really about me rather than both of us. My husband is happy in his career and likely to continue in it. I'm the one in the high-stress role, and continuing in it until 66 isn't something I want to do. Full early retirement would be the preference if the numbers supported it, but realistically the more likely scenario is stepping into something less demanding - possibly a completely different sector - rather than stopping work altogether. So part of this exercise is trying to figure out when the finances give enough of a cushion that a significant career change on my part stops feeling like a risk and starts feeling like a genuine option.

A few further questions for anyone who is following this:
Once we're fully maxing tax-relieved pension contributions, is there any point continuing to contribute further into those same pension pots - or is that where mortgage overpayment (or getting rid of that car loan!) becomes the logical next move?

Our fixed rate ends in ~14 months (currently 2.1%). How would people factor that into the mortgage vs. pension decision? If rates have moved significantly by then, does the thinking shift?

For people in Ireland who have a solid emergency fund, are maxing pension contributions, and whose mortgage is in reasonable shape — but who don't have the capital to get into property investment - what's the preferred route for any additional surplus?

Thanks so much everyone.

 

[ClubMan]

Once we're fully maxing tax-relieved pension contributions, is there any point continuing to contribute further into those same pension pots - or is that where mortgage overpayment (or getting rid of that car loan!) becomes the logical next move?

Key Post - Overpay mortgage or contribute to pension or do something else?

This comes up in a lot of different threads, so I will set out some principles here to kick off the discussion. I will edit it in the light of feedback. There are many options with your savings in excess of your emergency cash fund Pay down your mortgage Build up a fund to enable you to trade...

www.askaboutmoney.com

If you're maximising pension contributions and the mortgage isn't onerous then it probably makes sense to tackle high cost debts first - in this case the car loan (although I can't see that the cost/interest rate has been stated above?).

 

[Sarenco]

I would apply any available money in the following order of priority -

- Pay off the car loan asap (and resolve to never take out another consumer loan);

- Maximise all tax-relieved pension contributions;

- Anything left over, throw it at the mortgage.

Once the mortgage is gone, it is likely that retirement will be hovering into view. So, you could start building a meaningful cash cushion while maintaining a high allocation to equities in your pensions.

Whether you step back to a less stressful position or grit your teeth and plow on in your current role, with a view to getting to the finish line earlier, is obviously a personal decision.

You can have anything you want but you can’t have everything you want. You have to decide what’s more important to you.

 

[CharlieMac]

For people in Ireland who have.... — but who don't have the capital to get into property investment - what's the preferred route for any additional surplus?

I cringe at the assumption the Number 1 preferred way to invest your money is in property.

 

[StepByStep]

@ClubMan / @Sarenco – the prioritisation framework is very helpful: clear consumer debt first, then maximise tax-efficient pensions, then mortgage. Our car loan is €6,000 over 3 years, with 35 monthly payments of €195.16, totalling €6,830 (8.65% annual interest). It’s our highest-cost debt, so it makes sense to target it first.

@Sarenco – I really hear you on the “you can have anything you want, but not everything” point. That tension is something we’re very aware of and it’s hard in practice. We care about spending on things that matter to us – but we also want to make sure we’re building security for the future. It’s a balancing act, and one we’re still figuring out how to do!

@CharlieMac – thanks for your input. Just to clarify, I wasn’t assuming property is the primary route for investing – I mentioned it only to rule it out for us and be transparent about our thinking. We’re here to learn, so I genuinely welcome alternative perspectives on how people in our position might use any potential surplus once pensions are maxed and debts are under control. Even if surplus funds are hypothetical at this stage.....

 

[KOW]

Still reckon your blowing at least a grand per week on whatever.

 

[MrEarl]

@StepByStep

That pension move is a good move, though I still think you might also consider my suggestion, given bonuses are rarely guaranteed, into the future etc.

Thanks for breaking down the expenditure, in your post above, but in honesty, it still looks higher than it should be.

Please don't get me wrong here, I'm not trying to force you to do away with the few "treats", as you are more than earning enough to be entitled to them.

About how much are you spending on groceries, each month (noting that there's only two of you, and you favor organic etc. ) ?

Do you also dine out regularly, either at lunch times, or in the evenings ?

How much is the car insurance ? Is there an additional premium being paid here, perhaps ?

Are there also regular taxis being used, or trips to expensive concerts, theatres, health spas, club subs, clothes etc. ?

Also, let's not forget the €600 additional income, per month, from student rent, in addition to both of your net salaries.

No disrespect intended, but something feels like it's missing, when I look at the income versus expenditure.

 

[arbitron]

OP, you are in a very good position and great that you are approaching this with an open mind.

€15k in revolut savings 1.5%

I'm a fan of Revolut and have been with them for 10 years but I would not keep that much money (half of your savings) with them, especially when you say:

my husband was keen to preserve a larger emergency fund given some significant health experiences in both our families that highlighted how unpredictable things can be.

Your husband sounds like he is cautious and probably would not like to get bogged down in some of the delays people experience with Revolut. For example, I did an "instant" transfer from Revolut to another bank last month for about €2,000 which was blocked by their system as suspicious. In spite of daily chats with customer service and providing all the documents requested, it was held for 2 weeks. Luckily I was able to make the transfer from a different bank account in the meantime (which actually was instant) but if not I would have been stuck. Revolut is fine for relatively small amounts that you can risk being frozen out of but definitely not for instant savings.

I'd push back a little on the suggestions that there must be obvious waste to cut. I guess the question for us is more about whether our spending is appropriately prioritised given our longer-term goals, and that's exactly what we're now examining more deliberately.

No doubt you can trace where the money goes and it's spent exactly as you expect, but it's still worth examining it forensically. Lifestyle inflation is real and often subtle. I have seen several friends and colleagues stung by this.

When living in Dublin our spend was lower than yours, even though our lifestyle was similar if not more expensive than what you are describing, so I have the same difficulty as others above in making sense of the numbers. Maybe it's the family gifts, we just don't know.

This might sound like nitpicking but in the higher tax bracket if you can spend €500 less a month then you get the same benefit as a €12,000 gross annual pay rise..!

a small monthly medical buffer, sinking funds for car and property maintenance, inexpensive hobbies, family gifts (large extended family - lots of occasions), and a holiday provision.

Are these savings pots that you hold physically separate to the €33,400 cash you mentioned above?

If so then you should include them in the total savings picture - health/car/holiday are just labels and there is no need to treat them as separate for the purposes of this analysis.

If they are already included in the €33,400 cash balance and in the €1,000 you save each month then you can't include them in your outgoings.

This is why it would be useful to see a breakdown by category, so you can really scrutinise.

 

[Clamball]

It is great that you have a tight grip your spending and know where your €7K per month is being spent. And no apologies are needed for spending on organic Irish produce, And it is not nosiness that has us querying your monthly breakdown. For example if you are spending €500 a month on gas and electricity people might suggest a good use of your savings would be to invest in insulation or solar panels to reduce your energy bill when you are retired. Or perhaps you like the house at a balmy 24C due to arthritis or something and people can suggest grants or government schemes that may help.

If you break your spending goals down into short term and long term what changes can you make to your short term goals that will help you in your long term goals.

You want to step back/retire early/ take a lower paying role, that is your long term goal. This will impact your take home pay and can you then afford your current lifestyle on your new budget or should you divert funds now where you can to achieve your long term financial goals faster.

Suggestions are difficult to make without a better breakdown of your current spend. Say you spend €1K per month on family events - travel, clothes, gifts, food etc. perhaps that is all revolving around nieces and nephews and in 10 years time they have grown beyond expecting gifts from Auntie StepbyStep. Then you will need €1K less per month in income to spend and you can direct it towards paying your health insurance (if changing role or retiring) etc.

I think you are in a great position financially to have the ability to make those choices now that will Impact your future in retirement.

 

[Bronte]

Why did you do rent a room?