Moneymakeover Near-Term Goals. Am I approaching it right? - Money Makeover

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alexandra123

Registered User
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285
salary 95k
finishing college 2025 with hopefully a PhD in maths
mortgage cleared dec 2025
pension pot 125k , putting in 5% my contribution and 6% employer contribution
savings : 0
children : none
age:51
married: engaged



outgoings monthly from 2026 onwards:
save : 3200
myself :1100
Tv licence :13
house insu :20
mgmt company :50
garden loan :410 finish july 2026
parents life policy :210
openai chat :23




I have been working hard to clear the mortgage over the last 5 years. Mortgage is being cleared 10 years early.
I want to buy in Gran Canaria Mogan within the next 4 years and after that I want to start working on the pension pot. I would like a small mortgage of around 50k or thereabouts to get me a <=250k holiday home.

goals:
year 1 save = @3200*12=38,400
year 2-4 save = @45000*3= 135,00
total 173,400


I would like my savings to start working for me. I was thinking of investing my monthly savings and hoping for >=10% return on 3-5 year investment. I was looking to start in the stock market - all very new to me, but I was thinking of splitting the money between
MSCI World ETF (EUNL)
iShares EXH1 (Defense)
Rheinmetall AG
VanEck DFNS (Global Defense)


Basically, I am looking for some advice on how best to achieve my goals of buying a retirement home and getting their quicker by using the stock market and then working on the pension pot.

I dont drink that much, I hardly go out and that is due to parent caring responsibilities, college and a full time job. So I really want to start unwinding and enjoying my life when college is over and when family responsibilities come to an end as I am going through this the last 20 years now. I would also like to retire early but I dont have a year in mind and my current pension pot, says that I will get back 800 a month when i retire.
 
You're heavily weighting to defense. For the Mogan idea I'd be thinking of leaving the cash invested in blue chip stocks a d renting off the dividends. A place in Mogan could be some 300-400k and possibly not a good idea unless you were going to be there for a lot of the year
 
alexandra123 said:
children : none
age:51
married: engaged
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Are you likely to have children, adopt, or become a step parent etc.? If so then that may have a big influence on any financial plans.
alexandra123 said:
pension pot 125k , putting in 5% my contribution and 6% employer
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It might be an idea to put more into your pension. And to check that it's invested appropriately (most likely a high/all equity fund/index tracker) and the charges are competitive.
 
alexandra123 said:
I was thinking of investing my monthly savings and hoping for >=10% return on 3-5 year investment.
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Even 12-18 months ago with stock markets growing in the 20%pa range, I'd have said this was an unrealistic expectation.

Today, even more so. Your timescale of 3-5 years is too short to get an average return of 10% - you could just as easily be hit with 3x minus-10's as 3x plus-10's over the next 3 years.

Well done on clearing your mortgage btw. Your next best step to financial success is to forget about purchasing a holiday home (rent if desired, as advised by others above) and max out your pension contributions. Is your 125k pension pot with your current employer or a previous one?
 
alexandra123 said:
pension pot 125k
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alexandra123 said:
age:51
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alexandra123 said:
how best to achieve my goals of buying a retirement home
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Your pension pot is way too light for your age.
Sell your home and buy a retirement home when you retire.

As of now, you cannot afford to buy a retirement home in advance.

alexandra123 said:
married: engaged
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You will need to plan your finances with your spouse. Your circumstances might well change after you marry. Another reason for not buying a holiday home. Does your spouse own their own home?
 
After finishing the phd is there any prospect of a new career direction/salary? If so maybe factor this in financially.
 
You're pushing the limit trying to contribute to your pension and at the same time save 173k

I guess you hope to get a promotion with your maths qualifications?
I fully support your goal to buy an apartment in the Canaries if that's what you want but I think the pension contribution would have to suffer.

If you continue to put just 5% into the pension you might save 173k

How about if when you stay in your holiday apartment you rent out your Irish property? Maybe for 6 months per year for a few years. That would be a nice dig out.
 
moneymakeover said:
How about if when you stay in your holiday apartment you rent out your Irish property? Maybe for 6 months per year for a few years.
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That could go badly wrong if tenant refuses to leave after the six months, then you're down the rtb rabbit hole for a few years....but where do you live in the interim and what will the property condition be like when they leave?
 
Fair point @Persia
Another option would be to get a lodger, keep own room
Then they have their room
And she has her room to return to whenever.

Just thinking of options to make things work financially
 
I worked with a person who bought a place in the Canary Islands to holiday in. At first she loved it then got tired of justifying the purchase by going to the same place over and over. These days non residents buying up holiday homes in Spain, Greece has become very unpopular with the locals I noticed.
 
Just some further updates.
I am hoping to get to the 120k salary range within the next 2 years and change my role.

There will be no kids in our lives.
My partner has no assets and is not eager to contribute to buying a home abroad. He lost his house and overseas holiday home during his last divorce and does not want to bear the burden again. He has no pension and will not start one.

I know my pension is light. I was never brought up to think of a pension, let alone go to college.

If I do move abroad, I hope to let out one room in my own home, just to keep money coming in and to keep the place in use and not vacant. I dont plan on renting the whole home out as I am afraid people wont leave.
 
alexandra123 said:
I know my pension is light. I was never brought up to think of a pension, let alone go to college
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Be that as it may, as suggested by several posters earlier, you should probably prioritise boosting your pension now by contributing up to your age related tax relief limit - 30% of gross at your age. You should also check that the asset allocation is appropriate (high/all equity content in my opinion) and the charges are competitive.
 
If you get married, what are the financial plans? If he has no house, will he live with you, will he go abroad with you? When he retires, will he be able to survive on the state pension? Will that affect your ability to do what you want to do and your finances?
I think your plan is unrealistic. You have very little savings after working for probably 25 to 30 despite a very healthy wage. (Even if I do understand that you have paid your mortgage early). How do you plan to live on 1k plus some detailed expenses? How have you come to that figure? Why some limited expenses are added?
As mentioned before, your pension is light. At your age you could contribute 30 per cent of your wage. This would be the most effective saving particularly as you mentioned retiring early. Your current pot would give you about €400. The €800 is probably if you continue your contributions until 66, taking into account the find performance.
Any reason you chose the Canary islands? Have you lived there previously? Have you a connection with the place? Living abroad and going on holidays is different. I do visit the idea of buying abroad regularly as I have close connection with another European country. Despite the fact that I can speak the language, that the area I visit is attractive, that we have family connection there and could buy a property at a reduced price without finance, it still doesn't make sense to me financially and renting is still my preferred option because it's the cheapest and the most flexible option.
 
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alexandra123 said:
My partner has no assets and is not eager to contribute to buying a home abroad. He lost his house and overseas holiday home during his last divorce and does not want to bear the burden again. He has no pension and will not start one.
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Had to read this twice. So essentially your life partner intends to live with you rent free in both proposed properties and live off your pension when he retires?

I would respectfully suggest it's not a money makeover you need but a partner makeover.
 
I think you need to forget about buying a holiday home. As things stand in your relationship, your already light pension pot is likely going to have to support both you and your intended, when it is already falling short of your own individual needs.

Max out your AVC's, rent a holiday home in due course if you must, share your home with your partner... but I do think you should be insisting that they at least start making some of their own provisions for their own retirement rather than rely on your funds to carry them. Whatever about maybe not having the means to do so, but to outright refuse just because...... well that's just not fair on you.
 
alexandra123 said:
I know my pension is light. I was never brought up to think of a pension, let alone go to college.
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With respect, you are 50, a high earner and are about to complete a PhD in maths. Using your upbringing is a fairly weak excuse to use for not funding your pension.

alexandra123 said:
My partner has no assets and is not eager to contribute to buying a home abroad. He lost his house and overseas holiday home during his last divorce and does not want to bear the burden again. He has no pension and will not start one.
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This has alarm bells ringing. Assets are split reasonably equally in divorce so he couldn't have lost it all. More likely was that he never really had any of it in the first place and it was all highly leveraged so had to be sold in the divorce.

What is his current income? You both should be contributing to pensions in a much more significant way than at present. Getting married is like winning the lotto for your partner as you are bringing all the wealth and assets into the marriage.

You can't plan your finances individually if you intend to get married, to protect yourself you really need to consider this. What happens if you after year 4 when you have saved €170k and you decide to get divorced? Normally you shouldn't be planning the 'what if' scenarios going into a marriage but in your case, you need to be prepared for that eventuality.

Back to the property, that is some very ambitious savings and no hiccups along the way. It doesn't leave room for any property maintenance or upgrades, needs for updating car (even an older one) or any other unforseen expenses that could arise

Why a mortgage of €50k? I don't know what it like abroad but here, most banks for a lower limit for what they will lend. That would mean purchasing sooner or delaying until you are a cash buyer.

But either way, it doesn't make financial sense for you. It could take you 6-7 years to reach your target of €250k. By then you are 57/58 with very little in your pension relative to your income. Do you expect or intend to work all the way to 65/66 as a high earner? It doesn't leave much time to make use of the foreign property and makes funding your retirement very precarious if anything happens to you in the meantime

You should really increase your pension to the maximum 30%, continue saving excess net income and enjoy longer holidays in that area for the next few years by renting as needed.

If you have a healthy pension fund at retirement, you will have the option of using some or all of you savings plus the tax free lump sum to purchase a property abroad or sell up completely and move permanently

Either way, you need to be on the same page as your partner about finances, it is a very fundamental part of marriage. Not much point in you saving incredibly hard for this property if they have no intention of contributing
 
Thanks for all the responses. I will clear the current mortgage and then update the pension contribution and see how I get on with my savings.

In relation to the minimal savings and only 5% contribution, in fairness, when I first got the property, I was on a low wage, and I struggled for years to keep myself afloat. Often, I wished I did not invest in the pension as I could not afford it.
I have also invested 70k into my home to get it where it needs to be.
23k into a brand new car which will do me for the next 10 -15 years.
I have spent nearly 50k on college fees over the last few years.
Only for the education I would not be on the money I am on. I only got to 90k last year and 5 years previous I was on about 65k.

Also - I hope to be made redundant from my current job within the next 5 - 10 years. If that happens, I should get roughly 2 years my salary after tax, but that may not happen; it depends on the job.
 
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