Couple (38 and 42) looking for pointers

B

bess

Registered User
Messages
31
Personal details

Age: 38

Spouse’s/Partner's age: 42

Number and age of children:

7
3
1

Income and expenditure
Annual gross income: 94k Public Sector + approx 5 net average private practice


Annual gross income of spouse: 64k Public sector

Total monthly income: 7700 net

Summary of Assets and Liabilities

Family home worth approx: 600k

Mortgage: nil

Cash: €130,000 - deposit accounts

PS Pension fund: HSE and Dept of Education pension scheme.
Zurich pension (husband) 25k


Other borrowings – car loans/personal loans etc

None

Credit card is always cleared monthly

Buy to let properties

None

Other savings and investments:
2x investments we pay 1400 monthly into - currently value of about 60k

Other information which might be relevant
No health insurance - have looked into it a few times but have chosen to pay as we go with savings thus far. No health issues thankfully right now.
Childcare approx 500 pm - might rise to around 700 in 2023
Good death in service benefits with our jobs

What specific question do you have or what issues are of concern to you?
Previously I was advised to take out income protection/AVCs
I'm currently in the process of setting up AVCs & income protection where i will pay 700 per month from my salary.
Husband will likely set up something similar soon too.

We have accumulated a substantial amount on deposit and I'm looking for advice for this. We had thought about investing in a property which might also serve as our retirement home but the prices have risen sharply

All responses much appreciated. Thanks.
 
bess,
My advice for what it's worth; Get health insurance. Very few people know if they have underlying health issues or not. I'm delighted to hear that you have none. Look back on your family's health history and also your partners family history. You might get a surprise or two. That's all I'm giving you advice on.
 
bess said:
Other information which might be relevant
No health insurance - have looked into it a few times but have chosen to pay as we go with savings thus far. No health issues thankfully right now.
Click to expand...
I don't think you're quite wealthy enough to self-insure. I've always seen voluntary health insurance to cover catastrophic stuff. That still happens to people of your age and health level . I had perfect health and then one day I didn't.

With the penalties for signing up as you get older you should start on at least a basic plan immediately.

Otherwise there is probably scope to make AVCs despite having PS pensions. That's generally a better vehicle for your wealth then keeping it outside a pension wrapper.
 
At a minimum given your current financial health I would get health insurance for yourself and spouse. A small thing could mean a lot of discomfort on a waiting list, not just severe illness. There are also waiting times to be served for certain cover. I've been through the public system for whatever I've needed recently as that particular service is great publicly but I'm sure not all are. I'm not sure of the value of it for young kids if you need to make savings, though it has allowed us to attend privately to put minds at ease for a couple of matters.
 
Great, we will get health insurance
We are setting up AVCs too currently
Any thoughts regarding the 130k on deposit?
 
bess said:
Great, we will get health insurance
We are setting up AVCs too currently
Any thoughts regarding the 130k on deposit?
Click to expand...
Do you have an appetite to get involved in property investment. Its not just or even primarily a dry numbers based decision. If you do I suggest that there is no better investment. That is just a personal opinion.
 
bess said:
Cash: €130,000 - deposit accounts
Click to expand...

bess said:
2x investments we pay 1400 monthly into - currently value of about 60k
Click to expand...
bess said:
Any thoughts regarding the 130k on deposit?
Click to expand...

This is confusing.

Do you have €130k or €190k ?

I am assuming €190k and you are performing some form of accounting, keeping some funds separate from others. This makes no sense. Treat your whole €190k as the one amount to be invested.

Brendan
 
You own a family home worth €600k. So you are fully exposed to the Irish residential property market. You should not increase your exposure by buying a residential investment property. Furthermore, with the two of you working full-time and three young children you have enough work and headaches to deal with.

Borrowing to invest might maximise your wealth, but it could also maximise your losses. You are well off. Your objective should be to preserve your wealth and not to maximise it.

So invest in some equity based fund or a diverse portfolio of equities. This will minimise the hassle and political risk. It will maximise the expected return over the long-term.

And if will be completely flexible:
  • If you decide to trade up, you will be able to sell the shares immediately and buy your new property.
  • If you decide to move, you will be able to move without selling your existing home.
  • If you decide to take a career break, you will be able to cash part of your savings.
By comparison, if you decide to borrow €200k to invest in a property costing €390k:
  • If you decide to trade up, you will have to sell your investment and it might take a long time to sell.
  • If you decide to move, you will have to sell your existing home first as you will already have borrowings of €200k.
  • If you decide to take a career break, you won't be able to part-sell your investment. It will be either none or all of it.
So in your situation, it's clear that you should invest in equities rather than borrowing to invest in property.

Brendan
 
But if you are considering investing in property, read these first:

Tenant Over Holding - Can't afford to keep renting/Can't Sell!!

Hi First time poster long time stalker. We have a rental apartment property in Dublin, which we have propped up for 15 years. Through this whole time it has been tenanted to one long term tenant. We are now at the point where we can sell it and just break even and ultimately walk away with...
www.askaboutmoney.com

Key Post - Why I am selling my 5 investment properties.

I have been a small time landlord for more than 18 years. Ran it as a business, as one should. Like many others on this forum, all the BTLs are located in a rent pressure zone and therefore rent-capped. Again, like many others, I prided myself offering high quality accommodation and service for...
www.askaboutmoney.com

Thinking of selling a rental property? You should probably get a move on...

The Tanaiste confirmed today that the Government will not be opposing a Labour Bill that seeks to provide greater security of tenure for tenants. The Bill will remove the ground which allows a landlord to end a tenancy on the basis that they intend to sell the property within three months...
www.askaboutmoney.com
 
bess said:
Number and age of children:

7
3
1


Good death in service benefits with our jobs
Click to expand...
The standard death in service benefit in the public sector is a minimum of one time salary up to the tax free lump sum that would be paid based on years service. Plus 50% of the pension that would have been paid if you lived to retirement. I know there are public bodies that pay more than this.

But with three very young children, if something happened to either of you, your world will be turned upside down and that will have a massive impact on your ability to work and earn. Life cover is relatively cheap and in most cases, it is never used. It is that just in case though.


Steven
www.bluewaterfp.ie
 
I agree with Steven re death in service, and suggestions to get health insurance. I would get additional standalone 20+ year life cover (convertible, dual, non-indexed term policy); one of you may leave/change work and getting a replacement life policy could depend on health at the time.
 
there will be one income, not two. And even at that, their ability to earn will be reduced by having 3 young children who now have one parent.

What are they going to do with their house? Move to a smaller one to release cash? Wouldn't insuring the risk be a better use of money rather than having to move house?
 
You must log in or register to reply here.
Back
Top