Not Maximising My Fortunate Situation

S

Scooter

Registered User
Messages
4
Hello everyone,

I'm a new member but I've been a reader for years. I'd be interested in your advice on my financial situation

Age: 44
Spouse’s/Partner's age: N/A

Annual gross income from employment or profession: 95,000
Annual gross income of spouse: N/A

Monthly take-home pay: 3,600

Type of employment: e.g. Civil Servant, self-employed. Private Sector, permanent contract

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

Rough estimate of value of home 240,000
Amount outstanding on your mortgage: 0

Other borrowings – car loans/personal loans etc None

Do you pay off your full credit card balance each month? Yes

Savings and investments: €115k in CU, €80k in Ulster Bank Loyalty Saver, €17.5 in Ulster Bank Home Saver, 1k in Prize Bonds

Do you have a pension scheme? Yes, using AVC's to make maximum 25% contributions

Do you own any investment or other property? No

Ages of children: none

Life insurance: Death in Service benefit I think..

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

I think it's pointless having €115k in the credit union, annual return wouldn't even cover inflation but I don't know how to improve the situation.
I really want to move it somewhere that it has the opportunity to make a better return. I'm comfortable with locking it away for 5 years. The mortgage is paid off, I'm happy where I'm living and don't have the urge or need to move anytime soon. I would consider myself to have a medium to high risk attitude, 4 out 5 which I know isn't reflected in my current situation.

Do you have any advice for my situation please? Or maybe to make it more interesting if I handed control of my finances to you, what changes would you make, savings wise not spending
 
Congratulations on being in such an envious financial position.

In your shoes, I think I would do something along the following lines:
  1. Ensure your pension is invested 100% in a global equity fund;
  2. Invest around €75k in a global equity investment trust like F&C Investment Trust plc;
  3. Keep around €25k on deposit; and
  4. Invest the balance of your after-tax savings in 5-Year State Savings Certs.
Separately, I would take out an income protection policy if this is not a benefit offered by your employer.
 
Thanks Sarenco. Pension is 70% invested in global equities, 30% lower risk equities.

I not familiar with F&C Investment Trust, I'll take a look at them
 
what are your goals? do you want to retire early? if not id spend some of the money, you cant take it with you!
 
Blackrock1 said:
what are your goals? do you want to retire early? if not id spend some of the money, you cant take it with you!
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Haven't really given it much thought to be honest. My aim was always to pay off the mortgage early, now that's done I don't really have a goal. It would be nice to retire at 60 though...
 
Scooter said:
Pension is 70% invested in global equities, 30% lower risk equities.
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It's important to look at your allocation to risky/safe assets across all your accounts and not to look at your pension in isolation.
Scooter said:
It would be nice to retire at 60 though...
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That looks like a very reasonable target given your financial trajectory to date.
 
How much is in your pension at the moment?
If you are looking to retire in 16 years you will need a decent pot by then.
 
If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.
 
 
David_Dublin said:
If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.
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Well we just dont know based on the info provided. We dont know his current pension pot size or if his employer contributes.

On a worst case scenario lets say he has just started contributing 25% and the employer doesnt contribute then his pension pot might get to 400k in 16 years but that doesnt account for reducing risk and moving out of equities nearer to retirement so the returns may reduce and therefore might not be 400k.

If he has a current pension pot of 200k then he is tracking towards 650k pot again assuming staying in equities (https://www.newireland.ie/pension-calculator/)
 
Thanks everyone for your replies

Gordon Gekko said:
€3,600 a month doesn’t sound right on a €95,000 salary.
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You're right, I rounded the figures and didn't explain that there are some deductions at source e.g. health insurance

Thank you, this is the sort of advice i was looking. Id be comfortable with €25k on deposit and I take your point about understanding what 5 years really means

Ok so pension is approx €290k today and employer contributes also but my 25% contributions are only for the last 3 years, after the mortgage cleared. I was of the opinion that I can't do anything here since I'm already maxing out my contributions?

David_Dublin said:
If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.
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Can a pension be too big??? Why would someone want to keep it below a certain value?
 

Who said Scooter is a he?
 
Gordon Gekko said:
I think you’re both a disgrace to be honest.

The poster could also be transgender.

Wake up.

We should all be really careful about using highly inflammatory terms such as “he”, “she”, or “they”.
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You're right. And there are way more gender insensitivities than that in the posts. The shame, head hanging here....
 
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