Hi, can you clarify. Are you putting 5% or 20% into pensions?Both maxim out our pensions (5% with company matching)
Clarified, 5% of our monthly salary with company matching that 5%Hi, can you clarify. Are you putting 5% or 20% into pensions?
It makes absolutely no sense to invest in bonds, while carrying a mortgage (effectively a negative bond). Any returns (if any!) are taxed. Just pay off your mortgage instead.5k to a bond etf
You can get tax relief on 20%, at your current ages, on salary up to 115k. It makes no sense in Ireland to invest outside a pension wrapper if not maximising pension contributions first. The tax treatment is giving you a free lunch.Clarified, 5% of our monthly salary with company matching that 5%
This is the bit you need to come up with a plan for first; which are you going to do, what timeline, and how much will it cost?Our future expenses in the next few years would be to move to a bigger house or to extend ours (~100k )
Just as a side comment: stop looking at investment strategies that make sense in the US. The tax treatments here are completely different, so you need a different strategy.following 3 fund portfolio strategy with 40/40/20 split
Yes, Dublin.It makes absolutely no sense to I vest in bonds, while carrying a mortgage (effectively a negative bond). Any returns (if any!) are taxed. Just pay off your mortgage instead.
You can get tax relief on 20%, at your current ages, on salary up to 115k. It makes no sense in Ireland to invest outside a pension wrapper if not maximising pension contributions first. The tax treatment is giving you a free lunch.
This is the bit you need to come up with a plan for first; which are you going to do, what timeline, and how much will it cost?
I've made an assumption that you're in Dublin. In the current environment, 100k will not get you much of an extension if you want an extra bedroom and larger living area for example. I was shocked at the costs when I looked at it, and they've only gone up since.
If you plan to move instead, realistically to stay in a similar area a house that's 'worthwhile' moving for will be more than 100k more than your current home is worth.
If you move, you'll need a 20% deposit as you're 2nd time buyers. With a young family, I'd suggest having this saved so that you might be able to draw down mortgage and move before selling your current home. It'll give you a lot of flexibility.
After that, I'd keep it really simple:
Max pension contributions, all in equities.
Pay down mortgage agressively.
Look at it again when your mortgage is less than 1 years salary.
Be ready to adapt to life changes.
I'd also recommend reviewing life insurance, especially income protection, as you've started a family.
Once you've left the employment that the pension relates to, you can access it early. As early as 50The only thing I don't like about pension is to have to wait until who knows when to draw it out. We were thinking on retiring early (maybe 55-60)
That's interesting, I'll look into that.Once you've left the employment that the pension relates to, you can access it early. As early as 50
Firstly, re selling first and then buying, it's possible to close both same day but the process here isn't as streamlined as in other countries. People don't like selling in a 'chain', so it takes a lot of work to close sale & purchase on same day. Lots of things can go wrong, so you need alternative accommodation if there's a gap between dates.In our heads we always thought we would sell the house and then buy a new one. Following your suggestion to first buy and then sell ours, does it make sense then to pay the mortgage aggresively? Wouldn't it be better to save that money for the 20% deposit?
With combined income of 240k per year, and 20% deposit, lots of things are feasible.how feasible is it that you wull be able to get a full mortgage for a new property before you have sold the existing one?
With combined income of 240k per year, and 20% deposit, lots of things are feasible.
Yes, I factored all of that in before suggesting it. It's entirely possible, but the first thing is to decide whether moving or not, and when, and then decide a strategy. The OP suggested ~100k additional for new home.maybe, but it depends on the value of the new home, existing mortgage repayments (which will be factored into your affordability) etc etc
Absolutely. The single biggest risk with the strategy is the short window of time between buying and selling, that the market changes quickly and you can't sell the house. Or there's an issue with your house that prevents anyone buying it (planning, structural, etc).two be wary of being left holding both properties!
Your pension scheme should be able to tell you what it's actually invested in, and there should be some options to choose from if it's a large employer.One thing I'd like to say is that I'm not 100% happy putting all my invesments into the pension and having 20% of my salary there, I know it's efficient from the taxes point of view but it's not the same as putting all the eggs in one basket? I don't know how all that money is going to be handle. If I put part of it on ETFs at least I'm the one controlling it
I'd suggest to look at what the total borrowings will be, rather than if it's a new mortgage or not.Another thing about expanding vs buying a new house is that if I understood correctly, I can top-up my mortgage to get the extension but for a new house I'd need a whole new mortgage with a 20% deposit, what makes it less attractive, is this correct?
I understand about the cost, thanks, I realise now that it'd be more expensive but still affordable for us.I'd suggest to look at what the total borrowings will be, rather than if it's a new mortgage or not.
Just, be realistic about the cost of extending in Dublin at the moment. A 200k budget for build and renovation wouldn't be in any way excessive.
Understood. Yes, it's actually what most people do, so apologies if I caused confusion. I was just suggesting that on your income level you have the option of not doing it (but as you point out it requires a 20% deposit).Is there an option where you can agree to buy a house if yours get sold first? Like a chain.
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