Moneymakeover Money makeover and heading towards retirement

A

Amazing

New Member
Messages
6
I'm hoping to gradually reduce my working days and looking for advise please

Personal details
Your age: 61
Your spouse's age: n/a
Partner's age if not married: n/a

Number and age of children: N/A


Income and expenditure
Annual gross income from employment or profession:

€53,000 currently I have take i years’s carers leave since March 2024 and am in receipt of Carers Benefit €260pw
I was on reduced houses and carers leave in 2024 for 6 week

Annual gross income of spouse/partner: n/a

Monthly take-home pay: ytd 2025 €11,518 ie €411pw €21,372 pa My take home pay is low as I pay high taxes during the years because I do not want to have a big tax liability at end of year on my rental income.

Type of employment
Employer type: Public Servant since 1996,
In general are you:
(a) spending more than you earn, or
(b) saving?
B Saver

Summary of Assets and Liabilities
Family home value:
Living in the family home with elderly parent, who has right of residency house & lands have been left to a family member who is US citizen for years.


Mortgage on family home: n/a
Net equity: N/A

Cash:
BOI €74,500 18 month saver a/c 2.5% Rate
AIB Current a/c €25,434 and €53,000 in Personal demand
Credit Union €11,000
Post Office €80,735
US Bank Accounts €55,000 ($65,000)

Pension
Public Service pension unsure if its Defined benefit
Pension Currently indicates 28 years 109 days service records show if retirement 2026 aged 62 lump sum €58,537 and pension €8,536
and dsp pension €15,095

USA 401k pension from USA employment 1988-1996,
PRSA 2008 Canada Life/ Irish Life

Company shares : vodafone €57

Total net assets:
Buy to Let Property

2 bedroom house purchased with cash for €65,000 in 2019 rented since 2019 rental Income €820pm No mortgage
House purchased in US in 1992 for €73,000 ($85,000 ) lived in it until 1996 rented since then currently to family member for €856 pm ($1,000)
no mortgage

7 year old Car valued at €15,000

Family home mortgage information
Carer and living in family home with elderly parent

Other borrowings – None
Do you pay off your full credit card balance each month? n/a

Pension information
Public Services Currently indicates 28 years 109 days
records show if I retire April 2026 @aged 62 lump sum €58,537 and pension €8,536 and dsp pension €15,095
401k from USA employment €132,831 ($155,000)
PRSA Irish Life


DSP Contribution Statement
Date of entry 12/9/1983
1660 contributions from 1985-2024



Value of pension fund:

Public service pension
records show if I retire April 2026 @aged 62 lump sum €58,537 and pension €8,536 and dsp pension €15,095
PRSA Irish Life €101,755
401K USA €132,831

Buy to let properties
Value: €130,00 Irish Property

Value €385,700 US Property
Rental income per year: Irish €9,840 US property €10,000
Rough annual expenses other than mortgage interest : expenses Irish Property €2000 US Property €2000
Lender n/a no mortgages


Other savings and investments: n/a


Other information which might be relevant:
There will be inheritance tax liability of approx €80,000 on the family home/lands which I possibly will contribute €25,000, I currently live in it with elderly parent rent free

Life insurance: n/a


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

I hoping to gradually reduce my working days and would like to help out family members financially.

On my PRSA with Irish life every year I avail of the revenue tax refunds with age and % restriction Should I be put more into it this PRSA even though I will not be able to avail of full tax refunds as it would be over the the age and % restrictions


Could USA 401k be rolled into the PRSA and how will this affect my tax free lump sum

Do I have enough PRSI contributions for full DSP pension


Tenancy agreement & PRTB Registration on the property in Ireland tenancy in place with current tenants since Sept 2023 when rent was €720. I increased the rent to €820 Sept 2024. Can I increase the rent in Sept 2025 to €920 as I know its under the current rent and by the time I pay TAX, PRSI & USC its not worth it.

I would consider selling it, but there will be CGT and what do I do with the proceeds of the sale.
 
Amazing said:
Family home value:
Living in the family home with elderly parent, who has right of residency house & lands have been left to a family member who is US citizen for years.
Click to expand...
Amazing said:
There will be inheritance tax liability of approx €80,000 on the family home/lands which I possibly will contribute €25,000, I currently live in it with elderly parent rent free
Click to expand...

Your financial affairs are complex.

But your description makes them even more confusing.

1) By family home, do you mean the house that you are currently living in while minding your parent?
2) How much is that family home worth?
3) Who is it left to?
4) What is the relationship of the owner of the home (your parent?) to the beneficiaries (presumably the children?)
5) Where are you getting the Inheritance Tax liability of €80k and how are you paying a proportion of it? In Ireland, the liability for Capital Acquisitions Tax falls on the individual receiving the inheritance. It is not a "total figure" split between a number of people
 
On the contributory pension you need 2080 for a full pension, you currently have 1660 from 1985. There are two ways of calculating.

Total contribution 1660 plus 5x52 (working until 66) gives you 1920, which as a % of 2080 is 92.3 % so you would get this percentage of the contributory pension at that time. But it is more complex than that and citizens advice may help here. I think you will be 66 in 2031 so it could be calculated on 30% of your yearly average plus 70% of your total contribution. Currently your yearly average is around 42 weeks per year which would give you 98% of the state pension. And the 70:30 ratio would yield you 96.3% of the state pension. You would need to be careful that contributions due to carers allowance are not over the limit allowed to be reckonable. You would have to check all figures yourself.

So you are living rent free with you elderly parent (mother?) in her family home which she has a right of residence until she dies. I hope she inherited her legal right share when your father died?

And then your sibling (brother?) in the US has ownership of the house already and has paid any CAT already?
Amazing said:
There will be inheritance tax liability of approx €80,000 on the family home/lands which I possibly will contribute €25,000, I currently live in it with elderly parent rent free
Click to expand...
so I don’t understand this at all. Why would you give your brother a gift of money to pay CAT. Has probate and everything been completed since your father died, and land/house transferred and all inheritances distributed?
 
Amazing said:
I'm hoping to gradually reduce my working days and looking for advise please
Click to expand...
Personal details
Your age: 61
Single, no children

Income and expenditure

Was on €53,000 income.
Currently: €21,372 pa
Public Servant since 1996,

Summary of Assets and Liabilities

Cash:
BOI €74,500 18 month saver a/c 2.5% Rate
AIB Current a/c €25,434
Aib €53,000 demand a/c
Credit Union €11,000
Post Office €80,735
US Bank Accounts €55,000 ($65,000)

Pension
Public Service pension 28 years (if retirement 2026 aged 62 lump sum €58,537 and pension €8,536)
dsp pension €15,095
USA 401k pension from USA employment 1988-1996, €132,831 ($155,000)
PRSA Irish Life
Company shares : vodafone €57

Buy to Let €130,000 2 bedroom house: rental Income €820pm expenses 2K
House US €385,700 rented to family member €856 pm expenses 2K

Car €15,000

Family home mortgage information
Carer and living in family home with elderly parent

Other borrowings – None
 
Advice:

Bank accounts

No need for all those accounts. You should put most of the cash into a high paying account.

Income
How much can you life on.

Pensions
It seems next year your pension will be 8K.
When does the DSP pension of 15K kick in
When does the US pension kick in ? Can you get a lump sum or how much will it pay out annually and at what age.

USA
What is the benefit of a complex situation of a rental house in the USA which seems to be of quite some value? On very low rent.

Housing

It seems you will be homeless on the death of your parent. What is your plan for that? Can you move into your 2 bed? Would you want to?
 
It seems you are living with your mother in the family home taking care of her, you've no right of residence, and your sibling in the US has instead inherited the house and land.

Why on earth would you try and pay your siblings inheritance tax bill? Which would be a gift to them and encounter more tax.

Which family members do you wish to help financially and why?

You mention 'rent free'. It's not rent free if you're looking after someone and reducing your own income in order to do so.

Did you mother receive her legal right share from your father's estate?
 
Thank you all for your valued advise.

Yes I am living & caring for our mother in the family home.

My sibling in the US has inherited the house and land so these transactions really has nothing to do with me.

There is no onus on me to make any payment to my sibling in the US but as they are on on low- minimum wage I had thought about making a financial payment as gesture of goodwill and did not consider the gift tax implications and will now rethink all of this

@Bronte
re bank accounts - I'm not a big spender usual day to day expenses Health insurance & car expenses Would you have any suggestions
on a high paying account.

Pensions
I'm 61 this year and going by public service estimator at 62 year pension will be 8K.

When does the DSP pension at pension age 66 but need to establish if I have entitlement to full DSP cont.pension

My US 401K commences at age 67 As far as i'm aware i dont believe there is a lump sum the payment would be €9,840 pa
From my employment in USA at age 67 to get social security retirement benefit you need 40 credits, I only have 36.

Rental properties:
US Property is rented by family niece & husband, I plan to increase the rent by €500 Feb 2026 or sell it if they move out.

Irish rental property I'm hoping I will have the option of moving into it on the death of elderly parent

@Clamball
You would need to be careful that contributions due to carers allowance are not over the limit allowed to be reckonable.
Would you be able to clarify this for me please

Thank you
 
Amazing said:
@Clamball
You would need to be careful that contributions due to carers allowance are not over the limit allowed to be reckonable.
Would you be able to clarify this for me please
Click to expand...
Citizens advice information is here. You can’t have more than 20 years of carers contributions.



Amazing said:
There will be inheritance tax liability of approx €80,000 on the family home/lands which I possibly will contribute €25,000
Click to expand...

I think people have made these points several times but.

Your brother in the states should have already paid any CAT on his inheritance of the house and land. Has your father’s estate gone through probate and inheritance paid out or transferred to the beneficiaries? Did your mother get her legal right share?

If he still needs to pay €80K then he has inherited property and land worth at least €570K so all he needs to do is sell the house and land, pay the €80K to revenue and and take the €490K. Why you feel you need to gift him €25K is something I don’t understand. There is no gift tax to be paid by your brother if you gift him €25K unless he has already received gifts in Class B that would bring his total over €40K.
 
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