Max pension or overpay mortgage

sceach

Registered User
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I appreciate there is a similar thread just started today but I didn't want to hi-jack that and I also wanted to give our specific details.

***
Age me: 40

Age spouse: 38

Income me: €115000 + ~50000 bonus

Income spouse: €80000

Both private sector


Mortgage 1: Balance €300000 value €365000, 18 years remaining. Gross rental income €1800 income per month. Rate 3.81%

Mortgage 2: Balance €145000 value €420000, 23 years remaining. Rate 3.3%


Savings: Saving approx. €4000 per month and have ~€70,000 cash in a lousy savings account L

Current pension fund me: €130,000

Current pension fund spouse: €50,000


We also both have approx. 6 years each deferred in a DB scheme from an old employer.


Two children both <10 years old


I currently contribute 5% to pension. Employer contributes 10%

Spouse not currently contributing to her pension. No employer contribution even when she does start


Should we:

1. Both max out our pension contributions up to the max tax relief, I think this would be a net cost of approx. €2700 per month

2. Overpay our mortgages by the same €2700 per month

3. Pay 15% into spouses pension, overpay the remainder (~€1700 out of 2700) off mortgages

4. Another combination of the above


I would like to have the option to retire (from current career at 55, not stop working)

Any advice welcome.

Thanks
 
Given the yield and financing rate, I strongly suspect you would be better off cashing out the equity in the rental and using it to pay down the PPR mortgage.

Also, why do you have €70k sitting in a savings account earning next to nothing? Suggest you take €50k of it and pay down the PPR mortgage.

You should also switch to a lower mortgage rate.

After that, I would suggest maxing out your pension contributions in priority to paying down your mortgage ahead of schedule.
 
If you change career aged 55 will you be able to access your pension?

Maybe you can withdraw avc? Or maybe you plan to take your pension at that time and continue working?

If not then maybe continue savings.


15 years to go, so enough time to invest in stocks
 
Thanks very much for the replies. The €70k is a combination of bonus and stocks that have recently come to me, it's just in the account until I decide best thing to do with it. I had also considered putting €40 or €50 of it into equities.

The PPR is a self build and we are going through final engineering and planning certifications and I think that until they are complete we can not switch mortgage provider.

I believe my pension scheme rules allow me to access my fund at 55 but I need to confirm that. I had sort of planned that we might sell the investment property at 55 to fund any shortfall in living expenses coming from a change in career until normal retirement age.
 
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