Personal details
Your age: 43
Your spouse’s age: 38
Number and age of children: 2 children (4 and 6)
Income and expenditure
Annual gross income from employment or profession: approx. €130,000
Annual gross income of spouse/partner: approx. €70,000
Monthly household take-home pay: €9,800 + 280 per month childcare
Type of employment: Employees
Employer type: Both public sector
Expenditure
All bills (approximately 3500 per month ), AVCs, savings, etc. come from my wages, including approx. 400 per month set aside in a separate account towards holidays, kids birthdays etc.
All food, clothing, petrol, general day to day expenditure comes from my wife’s wages.
Saving
€280 per month into state savings from children’s allowance to fund third level education.
€800/month into my and €300/month into spouse’s PRSA AVC in index funds which I just started this year. Plan to increase wife’s soon to €400 and have AVCs set to increase 5 per cent per year.
€1,000/month savings for short-medium term purposes in demand deposit account
Summary of Assets and Liabilities
Family home value: approx. €550,000
Mortgage on family home: €295,000 (2.2% green mortgage fixed for a further 18 months and a 19 year term)
Cash: approx. €15,000 cash in demand deposit account (We have used cash for car purchase and home improvements in recent years so balance builds up and depletes).
€18,000 all state savings from saving children’s allowance (all 5 year 1.75% p.a.). While this is intended to fund college, I would also view this as an emergency fund.
AVCs currently only worth about 10k between us
Wife has 20 years contributions to public sector pension and I have 11 years.
No other borrowing and clear credit card each month.
Other information
I have income protection for 75% of salary and life assurance that brings up death in service benefit to 4x income. My wife does not have income protection/life assurances other than general public sector arrangements.
We have two cars – a larger family car (8 years old) and a small runaround (6 years old). No loan/finance on either.
We have a lot of house improvements we want to do – we already spend 5k this year, maybe a further 10-15k in next 2-3 years.
We would also love to do a single floor extension (possibly 15msq) to our kitchen/dining area in the next 5-10 years. I am guessing €80-100k and we will save as much as possible but will also need to top up mortgage.
Both my wife and I want to be in a position to retire in about 20 years. My wife would have 40 years pension contributions but I would have 31 at that point.
Questions
I would value people’s views on my allocation of savings to fund future plans.
I know I am not maximising pension contribution but I think that with 5% annual increases in AVC contributions, and possibly increasing it further once childcare is no longer required or with wage increases, my retirement plans should be manageable. Maybe I am underestimating though, interested in views.
I would like to be able to help my children out as much as possible with house deposits, etc. I would foresee this coming from pension lump sums/ drawdown from ARF/ cash savings. I have considered the availing of the small gift exemption but I do not want them getting access to large sums of money until they have started their careers. Are there other tax efficient options I am missing that would allow me to retain control of gift past age 18?
Currently I am saving in minimal interest deposit accounts for short/medium term plans– this is mostly going to be earmarked for car, home improvements and eventually an extension. Is there a better way to save for this depending on the horizon without introducing the risks that the funds wont be there when we need them – car and home improvements 2-5 years, extension 5-10 years?
There is a chance of some additional net income (300-600 per month). If this were to materialise I was going to increase cash savings for the aforementioned medium term expenditure plans. Does this make sense in order to avoid car loans/reduce mortgage top ups for the extension? If I put it into AVCs I will have to borrow more.
Your age: 43
Your spouse’s age: 38
Number and age of children: 2 children (4 and 6)
Annual gross income from employment or profession: approx. €130,000
Annual gross income of spouse/partner: approx. €70,000
Monthly household take-home pay: €9,800 + 280 per month childcare
Type of employment: Employees
Employer type: Both public sector
Expenditure
All bills (approximately 3500 per month ), AVCs, savings, etc. come from my wages, including approx. 400 per month set aside in a separate account towards holidays, kids birthdays etc.
All food, clothing, petrol, general day to day expenditure comes from my wife’s wages.
Saving
€280 per month into state savings from children’s allowance to fund third level education.
€800/month into my and €300/month into spouse’s PRSA AVC in index funds which I just started this year. Plan to increase wife’s soon to €400 and have AVCs set to increase 5 per cent per year.
€1,000/month savings for short-medium term purposes in demand deposit account
Family home value: approx. €550,000
Mortgage on family home: €295,000 (2.2% green mortgage fixed for a further 18 months and a 19 year term)
Cash: approx. €15,000 cash in demand deposit account (We have used cash for car purchase and home improvements in recent years so balance builds up and depletes).
€18,000 all state savings from saving children’s allowance (all 5 year 1.75% p.a.). While this is intended to fund college, I would also view this as an emergency fund.
AVCs currently only worth about 10k between us
Wife has 20 years contributions to public sector pension and I have 11 years.
No other borrowing and clear credit card each month.
Other information
I have income protection for 75% of salary and life assurance that brings up death in service benefit to 4x income. My wife does not have income protection/life assurances other than general public sector arrangements.
We have two cars – a larger family car (8 years old) and a small runaround (6 years old). No loan/finance on either.
We have a lot of house improvements we want to do – we already spend 5k this year, maybe a further 10-15k in next 2-3 years.
We would also love to do a single floor extension (possibly 15msq) to our kitchen/dining area in the next 5-10 years. I am guessing €80-100k and we will save as much as possible but will also need to top up mortgage.
Both my wife and I want to be in a position to retire in about 20 years. My wife would have 40 years pension contributions but I would have 31 at that point.
Questions
I would value people’s views on my allocation of savings to fund future plans.
I know I am not maximising pension contribution but I think that with 5% annual increases in AVC contributions, and possibly increasing it further once childcare is no longer required or with wage increases, my retirement plans should be manageable. Maybe I am underestimating though, interested in views.
I would like to be able to help my children out as much as possible with house deposits, etc. I would foresee this coming from pension lump sums/ drawdown from ARF/ cash savings. I have considered the availing of the small gift exemption but I do not want them getting access to large sums of money until they have started their careers. Are there other tax efficient options I am missing that would allow me to retain control of gift past age 18?
Currently I am saving in minimal interest deposit accounts for short/medium term plans– this is mostly going to be earmarked for car, home improvements and eventually an extension. Is there a better way to save for this depending on the horizon without introducing the risks that the funds wont be there when we need them – car and home improvements 2-5 years, extension 5-10 years?
There is a chance of some additional net income (300-600 per month). If this were to materialise I was going to increase cash savings for the aforementioned medium term expenditure plans. Does this make sense in order to avoid car loans/reduce mortgage top ups for the extension? If I put it into AVCs I will have to borrow more.
