Moneymakeover Couple mid 40s - a couple of questions on paying off mortgage early, putting more into pensions, etc.

Premos said:
According to my understanding, if you have over 5k income and no other income, the contributions are classified as class s.
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you are correct afaik and its a benefit of holding that property.

Hanging onto farm land worth millions that earns very little and isnt your occupation is a foreign concept to me, but im not a farmer!
 
Do you have an exit plan for the farm down the line? You mention your spouse has an attachment to their rental property, but you are holding a very valuable farm as well....I do get the attachment to land, especially if it was family owned for a long time. And if it is increasing in value or has future potential use (eg sites for houses for your children) then I get holding onto it. But try to apply the same rigour in thinking to the farm as you are to the investment property.

Do you really need to farm it to generate that income, or could you get it from lease income? Is is required that you maintain status as a farmer for other reasons? When you say part time, are you missing out on a lot of leisure or family time by keeping up your farm work and a full time job? Is this sustainable as you get older?
 
The land is in the family with generations and I would prefer not the be the one to sell the family silverware after my predecessors worked hard to build it up. It is correct to say that my spouse is attached to the rental property and I am attached to the farm!

The land would probably bring in similar money if it was leased but I actually enjoy the farming, it's a change from the day job. Also it gives the next generation the option to continue the farming if they wish to when the time comes.

Agricultural land is also a very tax efficient way of transferring wealth to the next generation provided they are classified as active farmers. Also there may be a couple of sites there for them if they require them.

Luckily we don't need to sell the farm so it is not something that we plan to do.
 
For me, the best option is to increase pension contributions to €2500 a month. This results in about €1500 less take home pay.

Between drip feeding €1000 savings a month to make up the bulk of lost net salary and having less "surplus", you could do this for about 8 years and build up a decent pension.

A very easy way of getting a very substantial and risk free return on the savings by utilising tax free contributions to pension and replacing the lower net salary with money from the savings.
 
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