I presume you are living outside of Dublin? We have considered staying in Tipperary but my wife's job is in Dublin and I will be working in Dublin also. She has the option of working 1 to 2 days from home and I will have the option of working 1 day from home; so it is possible to live in Tipperary and work in Dublin.
No, actually I live in South County Dublin. I was away for a number of years, but came back as the Celtic Tiger was losing its roar and bought in 2011. We could consider upgrading the house to one that breaks the 1m mark, but we are happy with where we are. We would love a slightly larger house with rear access etc. If we were down the country, the house and plot would be double the size and would cost about 30% of what the house is now worth and we could laugh all the way to the bank.
Realistically, you are in the same boat as many people who would prefer not to be in Dublin but have to be for work. Yes you could commute into Dublin on a daily basis, but that brings its own stresses. The M7/M9 road in the morning and evening is not for the faint hearted. Of course you could consider the train up if you worked close to Hueston, but that brings about other challenges also. So ultimately it will be a trade off, and one that is not always an easy choice to make. We are happy with our decision to live in Dublin, but also know others who are equally happy with theirs to live in satellite towns such as Naas or further down the country. Its just a different life and different challenges.
I would also ask how long you have been back in Ireland and how well you have settled into life back here? It takes a while to readjust and sometimes its easier to readjust where you know people - and sometimes its harder
(a) Our jobs are secure but my wife's jobs is more secure as she works in the Insurance Industry. I, on the other hand, work in the construction industry which is very cyclical as we know!
So realistically, if either/both of you were let go in the morning, how long would it take to secure another similar paying job? you need to keep this in mind when considering the amount of cold hard cash you are keeping on deposit. And this is not only about getting a job, but a similar job at a simple level and pay grade
(b) Mortgage is for 20 years, which brings us up to 61 and 63 respectively.
understand, but given your projected saving potential you should give serious consideration to clearing this down quicker. I still believe with your savings 60 is a very good target, or even 55 if you want to be properly aggressive. We have ours effectively cleared at 42 and is a massive weight off our shoulders
(c) We will probably send our children to public school up to Junior Cert and maybe decide private education thereafter. However, we will keep both options open for now. If we were to stay in Tipperary we would consider Rockwell College.
The location of the house, primary schools etc are all factors in the secondary school decisions you make. It is not always easy to get into private secondary in senior cycles only and is dependent on economic cycles. It is something that you will need to consider at some point and have back-up options for. Schooling in Dublin is very different from the country and something I found out to my surprise. Your 10 year old will be looking at secondary school places probably next September - I think its the start of 5th class they are allocated in most places
Cars are in good condition but replacement of one car is coming up in 1 year or so.
Need to think of this in terms of your cash deposits also
(d) Our pensions are cumulatively worth about €250k but we have not contributed to them since 2012 when we left Ireland. Now that we are back in Ireland I need to get my PRSA back up and running. My wife is part of a pension scheme in her new job where she is contributing 15%.
15% is a decent contribution for your wife, but you should give consideration to upping this to the maximum 25%. There is an earnings gap between you both, and women have a longer life expectancy, so that is worth considering.
250k is roughly a pension of 12k a year [ball-park]
(e) good point regarding our equities and releverging ourselves. We will have to look at this further.
If you decide to keep the equities I think you have to consider why you are doing so? Do you expect to see considerable more upside on them? The tax on any profits is 40%. Do you expect the dividends to be high on them? The difference paying 100k off your mortgage would make would be massive:
- 400k @ 2.99% over 20 years = 2216 per month
- 300k @2.99% over 20 years = 1662 a month => that is 550 euro a month difference
- if you maintained the same mortgage repayment after your lump sum of 100k, it would save 65k in interest alone and allow you pay off your mortgage over 6 years earlier.
(f) Post Mortgage we will still be able to save €2k-3k per month excluding any work bonuses we might receive.
This does surprise me. Based on the salaries above, you should be receiving around 7350 a month net (before any pension payments taken into account). Add 420 childrens allowance onto that.
Mortgage is 2200 roughly, so leaves 5550. Take off 2500 for projected savings is 3000, is around 36,000 a year to run the house and spending money
Annual expenses of 2 cars (Tax, Insurance, Servicing, Tyres etc), Health Insurance, Property Tax, House Insurance, Back to School for 3 kids etc has to be a couple of grand. I also expect you will spend a grand or so on Christmas. That's down to say 30k for the year - so roughly 2.5k a month. This excludes holidays but includes all costs to run the household and all personal expenditure. It seems a bit low for me for a family with 3 kids.
I am not sure how you are handling full time childcare but that would put a serious hole in a 30k budget. The kids are too young to be minding themselves I am sure and you both work full time. I assume both of your families are in Tipperary. I am not 100% sure, you will save as much as you think you will and suggest maybe you do a household budget and track it to see how you are getting on. I know we would not run our household for that amount - especially when childcare is factored in.
And this is before any additional pension contributions are taken into consideration. I think you need to step back and look at all the household numbers again. This is where paying that 100k off the mortgage could make a massive difference to you all and just take pressure off financially for a few years.
