Hi Steven
Can't plan cancer.
But most of us would not be subject to stress and would not go sick as a result.
The two OPs in this case are Civil Servants, so I would think it very unlikely.
Brendan
I can understand this perspective, but we'd rather understand all of our options clearly before settling on a decision. That's just us. It would be no fun to take a short cut.I am a big advocate of taking a fully integrated approach to your overall assets including your PPR. But you seem to be overdoing it.
A perfectly valid perspective and similar comments in this thread are helping clarify our decisions over the next 2-3 years.You are well off and will be able to afford a nicer home in a few years. So that should be your objective. If an Excel spreadsheet tells you that by staying in your present home and maxing your AVCs, on retirement you will have 10% more assets in total, so what?
There are a lot of valid grievances you can have with the civil service, but this is not one.But most of us would not be subject to stress and would not go sick as a result.
The two OPs in this case are Civil Servants, so I would think it very unlikely.
You're still young enough to change your minds on this. I know lots of people who have.Number and age of children: 0 (and agreed plan is to have none)
This is excellent advice for most cases, but we both share a very firm position against having children and I doubt that will change. And it won't happen by accident if you catch my drift. Relationship breakdown or death is more likely in our case IMO. I suppose there could be a series of family tragedies after which we are called on to adopt nephews, but that is also a very long shot. So remote that I would ignore it for the purposes of planning the next five years.You're still young enough to change your minds on this. I know lots of people who have.
Kids are great, but also very expensive in the early years. Also in later years I would add!
In your shoes I would make my financial plans consistent with a change of mind on having kids in the next five years. Your housing needs would change (not just size but location) and moving to a "forever home" is best done only when you are happy with things like schools and other amenities for kids.
That probably means keeping more in cash or other liquid assets and not overpaying mortgage or making AVCs too much.
I think you have your priorities in the wrong order.We are looking for feedback on the following plan, which is set out in order of our current preference and sense of time priority. We're particularly interested in if you think we are missing anything or if you disagree with our rank ordering.
6. Consider moving to a more expensive home if it would improve our lifestyle
3. Overpay our mortgage fairly aggressively, though with an eye also on financing some home renovation in the next 2-5 years (possibly going as far as a grant-aided deep retrofit). If house prices fall 20%, we would like to still have a respectable (70-80%) LTV as we we will likely have to switch away from PTSB at some point.
Don't go mad but yes you should do this. You have 2 good and very secure incomes.5. Spend more money on nice things
An untimely death would obviously be emotionally devastating but it is not a financial risk to you especially as you will not have kids. In the event that one of you kicks the bucket, the other is left with a mortgage free home, a substantial lump sum from death in service payments and they will still be able to continue to work. They will have a good income and no more mortgage payments, it would be very comfortable financially1. Take out income protection for myself, re-evaluate the terms of my spouse's income protection, and re-evaluate our life contracts. Our main asset is our ability to generate strong income for the next 30+ years, so illness or the death of one partner is a major downside risk.
Run a mile, there is no tax saving when you lose the rest of your money. This is really gambling and something you definitely should not be doing while you have mortgage debt8. Consider getting Income Tax relief on through the Employment Incentive and Investment Scheme
This should be low priority considering your housing needs. Your pensions will be good regardless of AVC's. Revisit it in 5-7 years after you have moved or renovated. Don't focus so much on the tax savings that you think you are missing out on2. Set up self-directed AVC PRSAs for each of us and make full use of Income Tax relief
I think your way of viewing your PPR is incorrect here. It really does not matter how much your PPR is worth unless you are planning to sell. You don’t pay CGT on your PPR if it has been your PPR for the entirety of your ownership.Our current home suits our needs now, but could be a little nicer. We also have no pressure to move relating to work or family, so we could stay here forever and probably be very happy. We will have to decide before committing to renovation. Either way, it will make sense to build up home equity and perhaps cash closer to the time. The idea of investing in our PPR, either through renovation or moving to a more expensive home, is still appealing from a CGT point of view and we like the comfort of knowing we could release equity late in life if needed by downsizing.
I don't agree. Our PPR has value whether we are selling it or not. There are costs to releasing equity or liquidating it (estate agent fees, uprooting from social network, general grief), but that doesn't mean our house should be treated as a special class of asset that is ignored for the purposes of financial planning. I think for some people the romance of a "forever home" and a bequest motive clouds their thinking on this issue. Perhaps there is something else I am missing in your argument? Imagine a situation in which I or my spouse is diagnosed with some rare illness that won't be covered by medical insurance or state provision. I certainly like the idea of having a very valuable, liquid CGT-exempt asset to sell or re-mortgage in order to finance treatment. I'll take the hit on a life loan if I get to stay alive!I think your way of viewing your PPR is incorrect here. It really does not matter how much your PPR is worth unless you are planning to sell. You don’t pay CGT on your PPR if it has been your PPR for the entirety of your ownership.
A house is a comparatively illiquid asset in any short-term horizon. Particularly if you're needing money in a hurry because of illness or other calamity.I certainly like the idea of having a very valuable, liquid CGT-exempt asset to sell or re-mortgage in order to finance treatment. I'll take the hit on a life loan if I get to stay alive!
This and other comments in the thread are helping us put things into perspective.Use your money to have a better, nicer lifestyle in your 30/40/50/60s before you retire. You normally build wealth to support yourself and your family for unexpected life events, children, income in retirement. You are well covered for all three, so use the money on buying that nicer house.
Fair point. At the risk of going down a rabbit hole, we would dump all other liquid assets in this scenario and price the house keenly. Consider re-mortgaging through life loan or similar if that would be quicker. I wonder also would a medical clinic take a charge on a house if it was on the market. Maybe not.A house is a comparatively illiquid asset in any short-term horizon. Particularly if you're needing money in a hurry because of illness or other calamity.
I suspect you are overthinking this.Fair point. At the risk of going down a rabbit hole, we would dump all other liquid assets in this scenario and price the house keenly. Consider re-mortgaging through life loan or similar if that would be quicker. I wonder also would a medical clinic take a charge on a house if it was on the market. Maybe not.
I am certainly overthinking it. But it is a lifeboat, whether or not the waves are only in your head.I suspect you are overthinking this.
I'd have thought that with your resources it should be possible to have sufficient quality health insurance that would cover pretty much any illness?
And houses are for living in and enjoying and shouldn't be a financial lifeboat. After all, if one of you dies, the survivor will have to live somewhere too.
It really shouldn't be, though.But it is a lifeboat, whether or not the waves are only in your head.
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