Maximise the future or maximise the present?

Redzer

Registered User
Messages
70
Age: 53
Spouse’s/Partner's age: 51

Annual gross income from employment or profession: €90k + €10k performance related
Annual gross income of spouse: €36k

Monthly take-home pay €4.5k + €2.4k (spouse)

Type of employment: e.g. Civil Servant, self-employed - Currently Semi State (but previously private) + private (spouse)

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

Rough estimate of value of home €450k
Amount outstanding on your mortgage: €140k
What interest rate are you paying? Tracker (0.5%?)

Other borrowings – car loans/personal loans etc. €20k Home improvement loan at 0% from Family Member - €500p.m. Current balance <€15k>

Do you pay off your full credit card balance each month? Yes (typically €4k p.m. as nearly everything goes on CC but paid in full via Direct Debit from Current A/C)
If not, what is the balance on your credit card?

Savings and investments: Credit Union €9k + €10k(spouse) plus saving €300p.m. into Education Savings Account to cover Kids college registration costs

Do you have a pension scheme? Yes (me) - Total Funds €485k. Contribute 8% plus Employer contributes 12% = max. I have been contributing AVC's but see specific question below.
My Pension Fund value is broken down into a number of pots due to changes in employment over last 20 years.

1. Current Employer's Defined Contribution Scheme (8%+12%) = €220k (AON Growth Fund)
2. Previous Employer No 1 Retirement Bond €89k (Irish Life Empower Growth Fund)
3. Previous Employer No 2 Retirement Bond €103k (Irish Life Empower Growth Fund)
4. Previous Employer No 2 AVC PRSA €51k (Zurich Funds - 60% Eurozone Equity, 40% Dynamic)
5. Previous Employer No 3 own PRSA €21k (Irish Life Empower Growth Fund)

Spouse has no pension scheme currently but has 4 years pensionable service in Mater Hospital (1992-1995) plus a small (€4k) Retirement Bond from a previous employer. See specific question below.

Do you own any investment or other property? No (15 year old Mobile home costing €3kp.a. rent/bills. Probably will pull the plug on this as kids not interested anymore and only use 10-15 nights per year. Family use it the odd time also but I like the idea of an escape option if the sun were shining and I was able to go = rare)

Ages of children: 15 (Transition Year), 19 (Year 1 University), 22 (Year 4 University). Family Motto = "24? Out the door!" :)

Life insurance: Death in Work Benefit 3 x Salary


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

1. I saw the separate pension thread about an €800k threshold and noted the idea that I should not be making AVCs while my spouse has only a minimal pension fund. Based on my estimates I'll probably just pass that €800k threshold if continue with my standard 8% pension contributions (to avail of the Employer's 12% contributions) and I retire at 65. So I just want to confirm that we'd be better off if I didn't make anymore AVCs but my spouse started a PRSA and contributed say €10k p.a. (as that's taxed at 40%)?

2. If I were to do the above and just have a €800k pot I estimate that would give me an ARF income of approx. €44k (incl. €12k Contrib Pension) into my 90's. Am I estimating that correctly and shouldn't that be 'enough' to live on comfortably? (I know its a piece of string question but I think we're sensible enough and not massive spenders although we do enjoy a foreign holiday most years plus going out 1-2 monthly)
(I know my spouse would also have a pension fund in this scenario but I'm thinking that would be a bonus)

3. Should I be considering retiring earlier? If I were to retire at 62 and just have a €700k pot I estimate that would give me an ARF income of approx. €44k (incl. €12k Contrib Pension) into my 80's. Same comments above re am I estimating that correctly and shouldn't that be 'enough' to live on comfortably?
My spouse would probably also prefer to retire at the same time (Me 62, Spouse 60)
(Again I know my spouse would also have a pension fund in this scenario but I'm thinking that would be a bonus)

4. Finally am I being too conservative ignoring my spouse's pension fund plus the lump sums?

We'll probably have other life expenses thrown at us as the kids transition to adults plus elderly family but I'm still thinking I should maximise our future by pumping into the pension funds as much as possible while I can?
 
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time to plan

Registered User
Messages
360
Question for the audience rather than a reply as it's on interest to myself.

Re point3: Is an ARF income of 32k p.a (44k - 12k) feasible from a €700k pot, if retiring at 62? 4.6% p.a.
 

Redzer

Registered User
Messages
70
Question for the audience rather than a reply as it's on interest to myself.

Re point3: Is an ARF income of 32k p.a (44k - 12k) feasible from a €700k pot, if retiring at 62? 4.6% p.a.
My estimate is from an online Pension Planner that I don't really trust hence my queries here but it is estimating that level
(sorry don't know why same image in twice)
1636723948569.png
 
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Brendan Burgess

Founder
Messages
45,788
There are just too many uncertainties in all this.
  1. The return you will get on the investments over the next 40 years
  2. Your expenditure
  3. Your date of death
  4. Your wife's date of death
I see very little point in putting these into a calculator as they are just too uncertain.

Which is probably why you got no answer when you posted the question originally. It's just too uncertain.

Brendan
 
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