Is there anymore we can do to make our finances work better

R

Roro999

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Age: 61 (semi retired private sector PAYE earner)
Spouse’s/Partner's age:58 (retired due to ill health)

Annual gross income from employment or profession: 36k
Annual gross income of spouse: 10k public service pension 11k invalidity pension

Monthly take-home pay €4,050

Type of employment: e.g. Civil Servant, self-employed Me PAYE earner. Spouse retired.

In general are you:
(a) spending more than you earn, or
(b) saving? Saving approx 500 per month

Rough estimate of value of home €350k
Amount outstanding on your mortgage: €20k
What interest rate are you paying? Lowest rate tracker. Interest of €185 p.a at moment 5.5 years remaining

Other borrowings – car loans/personal loans etc Car loan 8k remaining 0% finance and likely to continue rolling on to another car every 3 years or so but at 0% finance. Monthly car payment currently €330

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

Savings and investments: Savings in cash €100k

Do you have a pension scheme? Me €220k in cash, I contribute just 1,500 p.a and employer 6k.. Value if leaving in cash after fees at age 65 approx €235k. Will take 25% at age 65 and balance to ARF. Spouse has a private sector pension pot of €150k in Zurich Prisma 2.

Do you own any investment or other property? Yes value €180k. No mortgage. Net rent approx covers third level costs of child. Will be retaining the net income when child finishes third level in 3 years time.

Ages of children: 5 children but youngest age 20 and currently in third level. Other children older and not dependent.

Life insurance: 250k joint dual life policy convertible at age 63 for me and 61 for spouse.
Spouse also has convertible policy of 125k at age 65.

SPECIFIC QUESTIONS/ ADVICE REQUIRED:

We are risk averse and generally looking for any advice on anything we should be definitely thinking about.
 
You should increase your pension contributions significantly you should be paying more like €14kpa

you have €100k in post tax savings this will keep that level of contribution going for up to 7 years by which time you will be retired and in receipt of the pension.

You should also increase investment risk a little especially I respect of your regular savings.

Prisma 2 is barely matching inflation so instead of being low risk it virtually guarantees you will lose money.

globalwealth.ie

Do You Need to Review Your ARF Strategy? - Everlake

More people invest in an Approved Retirement Fund (ARF), over the certainty of an annuity. But do you need to review your ARF strategy?
globalwealth.ie globalwealth.ie
 
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Thanks Marc. So you advocate increasing contributions even though we only get 20% tax relief and will be taxed at 20% on withdrawals . Retiring at 65 so I can only contribute for 4 years. We will consider switching the 150k pot to Prisma 3.
 
Absolutely. You can also go back and top up last year.

You are nowhere near the cap on tax free lump sums. So you will only pay tax on 75% of the pension fund and you only pay tax on the income drawn down. Each year 96% of your ARF isn’t taxed at all whereas if you hold that money personally you will pay some form of personal tax on it.
 
Roro999 said:
We are risk averse and generally looking for any advice on anything we should be definitely thinking about.
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First thoughts are well done you and Mrs. Roro. Can't off the top of my head think of any advice other than to enjoy it. It's no mean feat to have 5 children done and dusted and come out the other end financially ok.
 
Roro999 said:
Other borrowings – car loans/personal loans etc Car loan 8k remaining 0% finance and likely to continue rolling on to another car every 3 years or so but at 0% finance. Monthly car payment currently €330
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Can you clarify if you get a new car every 3 years? I am not very up to speed with motor loans. I know 0% can be ok but only if it isn't encouraging you to reach for a more expensive model in the first place. As an aside we got rid of our second car just before the pandemic. I was doing low miles but between tax, depreciation, insurance, and the odd service or repair, I could get an awful lot of ubers!!!
 
Thanks Bronte.

President ttttt: roughly buy every 3 years new at 0% finance. Same make car invariably costs 2k to 3k more when changing e.g 2018 cost back then say 28k is costing 31k so on change paying a bit more every month.
 
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