Moneymakeover Mid-40s & need to be ready for early (unplanned?) career exit

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sm7940333

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This is my first MM posting. Appreciate the guidance I learned from reading these posts over many years. Thus, I focused on paying off mortgage while building career. Now I need to pivot & start focusing financially on investing & preparing a glide path towards (early) retirement (which could be by choice or not by choice).

Personal details
  • Your age: 46
  • Your spouse's age: 43
  • Number & age of children: 3 kids: 14, 11 & 6


Income and expenditure
  • Annual gross income from employment: €178k base + €18k car allowance + 25% performance bonus / year
    • just about to start new role; so unsure what performance bonus will look like
  • Annual gross income of spouse: €11.7k / year

Monthly take-home pay:
  • Me: €9.1k (awaiting first pay-slip so estimated)
  • Wife: €1k
  • Welfare: €1.1k (DCA & Child Benefit)
  • Total Net Income: €11.2k per month

  • My employment: Employee, private company (MNC)
  • My partner’s employment: Employee, private company, retail


In general are you:
  • Monthly outgoings is approx.: €10k(based on the last 3 months & excluding some unique one-off payments)
    • We do need to do a deep-dive on spending & look for opportunities to reduce. Life is busy & I haven’t put much thought into it.
  • Historically, we’ve been savers. For example, mortgage paid off a long time ago due to aggressive over-payments.
  • In saying that, this year we’re spending as much as we are earning (after maximising pension / AVC contributions) this year. Did a lot of holidays this year as I knew I was impacted by re-structuring / redundancy…


Cash & Shares:
  • Cash: €560k – recently made redundant as well as execution of Long-Term Incentive sales
  • Company shares: €152k (previous employer)
    • based on current exchange rate; after tax approx. €137k
    • need to hold €43k for up to 3 years as part of approved share purchased scheme
  • Total net assets: €712k
Family home:
  • House value: €800k
    • Own property outright with no mortgage
    • We've debated moving on, but there are very few properties that meet our needs in our locality - so unlikely to move on now...


Other borrowings:
None; pay Credit Card in full every month



Pension:
  • My DB pension (previous employer): €52k per year – link to related post
  • My AVCs: €64k
  • FYI Starting new DC pension with new employer. Plan is to now maximise payments every year especially as SFT increased.
  • Partner’s Pension / AVCs: €143k - We always maximised partner's contribution in previous years & will continue to do so.

Total Assets:
Total: €1,719k + DB pension of €52k/year
  • House: €800k
  • Cash & Shares: €712k
  • AVCs / Pension: €207k & DB pension of €52k/year


Other information which might be relevant
Life insurance: yes – just don’t have access to file right now

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

Two areas of focus:

1) In the short-term, I have a lot of cash-on-hand & need to start making it work for me. What’s the best strategy? All in at once? Am I missing anything else?
FYI - I’ve been a landlord previously & not interested in going back into that game – previous posting on the topic

2) Given my role in the organisation, I’m always one re-structuring away from my role coming to an end. Given my age, I know there is a closing window of opportunity that makes me less employable (at my current level). So, I need to be ready for a career exit (by choice or not by choice). Essentially, I need to be FIRE ready. If I could retire earlier, I probably would – high stress role… or at least take on part-time role. Any guidance (from a finance perspective)?
 
You have a paid off house worth €800k, an accrued DB pension of €52k pa payable at 65, AVCs of €207k and cash/shares of €712k.

To amass that level of wealth by your mid-40’s is seriously impressive.

But…

You are spending €10k a month!

I appreciate that funding a family of five these days is seriously expensive but €10k a month seems excessive to me.

I think the first thing you need to do is dig out your bank statements for the last three years and figure out where your money is going.

You won’t be able to sustain that level of spending for very long without your current (high) income.
 
What is happening with the MNC you work for , you clearly have a senior role , why are they reducing workforce it seems ?
 
Blackrock1 said:
You're 46 not 56 I wouldnt worry about getting a role if something happens
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I dont understand this point being made here. So you re saying because op is 46 he shoukd not be concerned about getting another role should his current role end? Is that what youre saying?
 
He's saying that if you lose your job at 46 that's not the end of your career; just the end of your job. If the OP does lose his job, he doesn't need to be ready to transition to extremely early retirement; he needs to think about what job he wants to do next.
 
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Sarenco said:
To amass that level of wealth by your mid-40’s is seriously impressive.

But…

You are spending €10k a month!
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Agree 100% with both of these.

At the very least you need to get a good picture of what you're spending money on every month. There's plenty of free spending tracker apps out there, e.g. https://www.ccpc.ie/consumers/money-tools/budget-planner/ Take a bit of time on this. Hard to make financial plans until you know what your necessary spending is and what could be trimmed back at a push.
 
sm7940333 said:
Monthly outgoings is approx.: €10k(based on the last 3 months & excluding some unique one-off payments)
  • We do need to do a deep-dive on spending & look for opportunities to reduce. Life is busy & I haven’t put much thought into it.
Click to expand...
I think this level of spending is acceptable given your current income and particularly wealth level which is incredibly high for a couple in their mid-40s. Joint income well into six figures, PPR mortgage paid off, a DB pension that has a capital value of €440k, and cash/shares/pension assets of another €900k. AAM has a frugality bias, and over the years I've seen a lot more posters living too far within their means than posters living beyond their means. Cutting expenditure by 20% to 30% in response to a negative income shock would not be all that difficult, indeed I've done it myself.

OP is right be worried about about being vulnerable at his age - on average income peaks in late 40s and after another redundancy it may be difficult to restart at the same income level.

I would think harder about income protection and life cover for the main earner. This will be expensive given your age and income level but it is to be recommended - you are very vulnerable to a health shock that leaves you out of work for a prolonged period. I would also ensure that main earner's life is insured for something well into six figures. Declining balance life cover to age 65 would make sense here as pension and other assets will be going up over the next 20 years offsetting the financial hit of the loss of a main earner as time goes on.

Otherwise well done - you've made some good decisions and there is no shame in enjoying your income and wealth.
 
One point not picked up is around DCA, do you have a child who may not be able to live independently in future? If yes, might be worth talking to a legal advisor around trust provisions etc, and make sure the will is sorted etc
 
Fortune said:
6 years expenditure?
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I would say that’s about right.

I’ve done my own calculations on this as I’m the bigger earner in the household. I can’t avoid being morbid but a deceased person doesn’t cost anything.

Spouse has own earning potential and would have very large inherited pension wealth she could tap as early as 50.
 
Thanks for the comments so far… very helpful. I've replied below to some of the comments.

Career Risks
Just started a new exciting role (which is also a promotion) – so all is good today. However, I’ve been around long enough to see many an impressive leader (at the wrong age) fall foul to either external factors or internal changes… and I’m not saying I’m impressive leader! Just saying that there is inherent career risk at certain levels of an organisation & that is included in my compensation.

For example, some of the projects I am leading could lead to my own teams / career demise in the coming years by consolidation capabilities that enable the work to be done elsewhere… at the same time I will position the work to be done in Dublin, but I am unlikely to be the decision maker - this is just one known risk I see.

So, I just need to be ready for it an unplanned early career exit... and the odds of finding a role at a similar level (compensation) is challenging… I would likely have to take a significant step down to find another role.

Based on the above feedback, I’ll be re-evaluating our life insurance, income protection & broader financial cover.
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High-Level Spending…
Not going to argue that €10k/month is high. In saying that, if you knew me, you won’t be able to tell… no fancy car nor fancy clothes.

1) One-off year in holidays
Going into 2025, I had an orchestrated an exit opportunity (= redundancy). After 25 years of hard slog each, we decided to take advantage of a one-off opportunity with significant time off (annual leave, annual leave carry-over & garden leave). So as a family of 5, we’ve done +35 days of holidays in 4 different countries including NA & EU (& we did not do it on a shoestring budget). We’ve also clocked up another 2-3 weeks of family holidays in Ireland. Also had about a week of holidays as a couple outside the country (2 weekends away)… I am not going to even try to calculate what we spent on all the above… but it’s unlikely I’ll ever have the opportunity again (amount of time-off at this age with family). Even when it comes to retirement, my boys will have unlikely outgrown family holidays… or maybe not if I offer to pay for them!

2) Monthly cost is still too high
While holidays are a (smallish) part of the €10k/month, we’re still burning through more cash every month than we should be… We’re looking into this & will start tracking our spend in more detail. We lived a frugal lifestyle before which enabled us to pay off a mortgage well ahead of schedule.
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Planning for children with ASD
That also needs to be worked out: Long-term financial & estate planning for child on Autistic Spectrum Disorder (ASD) – where to start? | Page 2 | Askaboutmoney.com - the Irish consumer forum
 
Just on the topic of career risks - just read that "Amazon plans to cut 30,000 corporate jobs in response to pandemic overhiring". Obviously this impacts all levels across the globe, but I suspect senior levels (more expensive resources) will be trimmed more aggressively.

www.theguardian.com

Amazon plans to cut 30,000 corporate jobs in response to pandemic overhiring

Figure represents nearly 10% of the company’s roughly 350,000 corporate employees
www.theguardian.com www.theguardian.com
 
sm7940333 said:
Not going to argue that €10k/month is high. In saying that, if you knew me, you won’t be able to tell… no fancy car nor fancy clothes.
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be good to get an idea on where that is going, with no mortgage thats a pretty hefty spend if you arent funding a fancy car etc.
 
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