Moneymakeover Just need some reassurance

[Brandy1]

Personal details

Your age: 44
Spouse: 44
Number and age of children: 2- 18 and 15

Income and expenditure
Self -Self Employed Income Circa €55k
Spouse- Self Employed, Income Circa €75k
Third Business- Income Circa €70k
Part time employment me -€30k



In general are you:
spending or saving; saving

Summary of Assets and Liabilities

Family home value: 550k- Mortgage €43k with 6 years left
Investments: €20k
Savings €355k - in random accounts Interest rates from, 0.25-3%
Business Assets Cicra €1.5m

Company shares : none

Buy to Let Property value: none

Other borrowings – Business borrowings Circa €250k- repaying this out of Third business income to get reduced asap.

Do you pay off your full credit card balance each month? I don’t have one

Pension information

Pension 1 me - Value approx €28k- Contributing €250 a month
Pension 2 value approx €60k- Contributing €850 a month
Pension 3 me- Value approx €3k Contributing €150 plus €150 from employer a month
Pension 4 Spouse Value circa €85k contributing €1100 a month

Only really started investing in these pensions since we hit 40.


What specific question do you have or what issues are of concern to you?

As you can see we have a lot going on with 3 businesses and also me a part time Job.

Anyway, i am trying to plan a mini retirement when we are 55, plan would be to scale down business 1 and 2, and give business 3 to our children, while hopefully taking a small income from it. Live of our savings above until we can draw down pension at 61.

My question, I am going to increase our pension contributions, what level would i need to comfortably scale down at 61, assuming all our savings is gone? We would ideally like to take the 25% out of each pension and gift to children for house deposit.

Also i plan on investing some of the above money for 5 years, maybe €100k, where would be advised?


And lastly, help me see the wood from the tress in all this, are we doing ok? Is all our hard work eventually going to pay off and will we reap the rewards long term?

 

[Setforlife]

You seem to be doing really well, the main thing that I think you could really be taking advantage of that you don’t seem to have up to now is the amount you could be putting into pensions for you and your family via the businesses and the tax efficient ways you could employ them also. You should also be looking into how you might wind down those businesses in the future if that is the plan and make yourselves redundant from them and what is allowable in tax free redundancy payments if the money is in the business.

 

[Brandy1]

Yes thats is exactly, but to what level should we be increasing it each year to? I was thinking of increasing them both to €1750 a month while we can, this gives an estimate value of over 500k at 55 for eacf of us. Would this be enough to comfortably retire at 61 while taking a lump sum for house deposits etc

 

[Bronte]

And lastly, help me see the wood from the tress in all this, are we doing ok? Is all our hard work eventually going to pay off and will we reap the rewards long term?

All work and no play …

Nothing wrong with working hard, but time is precious, you mention no credit card, do you and your family have family time, experiences, Doesn’t have to be expensive …

 

[Brandy1]

All work and no play …

Nothing wrong with working hard, but time is precious, you mention no credit card, do you and your family have family time, experiences, Doesn’t have to be expensive …

Oh don't worry, we prioritise holidays and family time( well as much as any teen will allow), 1 taken and 3 booked for the year ahead, holidays are badly needed.

 

[Setforlife]

Yes thats is exactly, but to what level should we be increasing it each year to? I was thinking of increasing them both to €1750 a month while we can, this gives an estimate value of over 500k at 55 for eacf of us. Would this be enough to comfortably retire at 61 while taking a lump sum for house deposits etc

It’s hard to judge as only you know your required cash flow in retirement, but with your savings it seems a reasonable amount. You may be able to put much more into pensions as business owners once mortgage is cleared for example. Certainly if you carefully manage the business wind down and make yourselves redundant with good tax free redundancy payments it seems like you would be in very good shape.

Have a read of this for example:

Severance Payments and Taxes in Ireland: Are They Taxed? Blog234

www.informeddecisions.ie