Moneymakeover Late 40s - Plan for surplus savings, investments and retirement

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NewBuild

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15
Personal details
Your age: 46
Your spouse's age: 49
Number and age of children: 11 and 14

Income and expenditure
Annual gross income from employment or profession: 145k
Annual gross income of spouse/partner: 115k
Monthly take-home pay: 9,780 net
Type of employment - Both have private sector, permanent roles

In general, we are saving, somewhere between 1 and 3k per month. Both of us are maxing our pension contributions.

Summary of Assets and Liabilities
Family home value: 750k
Mortgage on family home: 157k

Cash: 50k (moving 40k of this into Trading 212 to avail of 3.5%).
Defined Contribution pension fund: 744k total

Willis - LifeSight Higher Target Return Diversified Fund (44%), LifeSight Equity Fund (56%), AMC: 0.14/0.16% - 223,777
Willis - 66.1% Global Equity Passive Fund, 20.9% Active Global Equity Fund, and 13.0% Diversified Growth Fund, AMC: 0.42%- 309,965
Irish Life - 90% in the High Growth Fund, 10% in the Growth Fund, AMC: 0.90% - 94,223.11
Mercer Aspire Moderate Growth, AMC: 0.37% - 99,138

Family home mortgage information
Lender: PTSB
Interest rate: 3.35%
Type of interest rate: fixed.
If fixed, what is the term remaining of the fixed rate? 2 years left

Remaining term: (Original term is not relevant): 2031, if overpayment continues
Monthly repayment: 2,888 (includes 1k overpayment)

Other borrowings – car loans/personal loans etc
None

Pension information
Value of pension fund: 744k (all pensions combined)

What specific question do you have or what issues are of concern to you?
Hello, thanks for taking the time to review the above!
I'm interested in having a clearer financial plan from now until (hopefully early) retirement. I also would like to take a closer look at pensions, and whether we're optimising our position here.

I am toying with the idea of reducing mortgage overpayment by half potentially, and investing the 500 into some sort of ETF or other fund instead but on the fence. The idea of being mortgage free is very attractive to us.

While we have 50k in cash, I'd like to have a plan for all future savings (anything above the cash we have), and have just this week started putting in a small amount (150pm) into Trading 212 on WEBN.

1. What should I do with pensions?
2. Should I reduce overpayment and invest some or all of that 1k?
3. Where should I put savings from now on, given we have a pot of 50k cash (40k on 3.5%)
5. I don't have any specific investment plan for the kids - I don't like the idea of a trust that they get access to at 18, but do want to be smart about how to build up a fund for them in a tax efficient way.
4. I'm looking into the idea of an independent financial advisor, would you recommend it in my position and if so, is there anyone you'd recommend?

Thank you kindly for the advice.
 
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First of all, you are doing very well, and any suggestions for changes would simply be fine tuning.

You are also on top of things. You know where your money is invested.

It doesn't really make any sense to borrow to invest. And that is what you are doing when you have still have a mortgage while you have money on deposit.

You do not need any separate funds for your children. The best long-term saving for them is for you to be mortgage-free when they hit third level.

So set the €50k cash against the mortgage.
Keep the repayments the same.
Clear your mortgage quickly.

Then you will be genuinely accumulating savings while having no borrowings.
 
Some will argue that you should have 6 months expenses in an emergency fund.

You are paying €3,000 a month into your mortgage and saving at least €1,000 a month.

But you have both well paying jobs and if some emergency happens, you can take a break in your mortgage payments.

As you are with permanent tsb, they treat overpayments as credits. So you can stop paying your mortgage until your overpayments are used up.
 
You really are doing very well financially.

I would be inclined to allocate all pensions 100% to a global equity index fund. Keep maximising your tax-relieved pension contributions.

Keep paying down your mortgage ahead of schedule to the extent that you can afford to do so. When the mortgage is gone, you will be on the home straight so it makes sense to start building a meaningful cash reserve prior to retirement, while maintaining a high allocation to equities in your pensions.

Keep it simple.
 
You're doing well. Make sure that your pensions will pay you an amount that you are comfortable to live on. You mentioned retiring early. The kids 3rd level can come out of your savings. You might think of putting 3K away for them tax free, I've seen other posters do that.

There was no mention of life insurance.

Is the house your forever home. Even if it's not, you can always sell to downsize when the time comes.
 
Sarenco said:
I would be inclined to allocate all pensions 100% to a global equity index fund
Click to expand...
Thanks. Are you suggesting merging all pensions into a single fund or just move them individually into the right fund in Irish Life, Willis etc? I wouldn't even know how to start planning this!
 
NewBuild said:
just move them individually into the right fund in Irish Life, Willis etc? I wouldn't even know how to start planning this!
Click to expand...
You just identify what funds you want (e.g. diversified all equity passive index trackers) and then contact the pension provider or intermediary to effect any changes in asset allocation.
 
Here are the funds available to me to move my Mercer pension, any of these provide a better option?
1785234666653.webp
 
Personally, I’d go 100% passive global equity unhedged for your pension.

Use any after-tax savings to pay down your mortgage and, when that’s gone, start building a decent cash reserve.
 
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