Personal details
Your age:45
Your spouse's age: 46
Number and age of children: 3 children – 3,10,12
Income and expenditure
Annual gross income from employment or profession: €130k
Annual gross income of spouse/partner: €85k
Me: Fee-based, part-time
Spouse: Public, full-time
Monthly take-home pay: €10,433
Other:
Child benefit: €5k pa
Gifts from parents (to me and spouse to avail of CAT exemption): €12k pa
In general we are spending more than we earn with significant mortgage and childcare for youngest. I have gone part-time and taken a pay cut to do so. We’re struggling to manage down expenses, though youngest starting school should help, but generally I would say we’re trying to walk back years of lifestyle creep. I have scope to take on further hours and am actively looking to do so.
Summary of Assets and Liabilities
Family home value: €1.9m
Mortgage on family home: €715,000
Net equity: €1.185m
Family home mortgage information
Lender: PTSB
Interest rate: 3.35
Fixed at 3.35% ending March 2031
Remaining term: 17y
Monthly repayment: € 4,790
Other borrowings – None
Do you pay off your full credit card balance each month - Yes
Pension information
Value of pension fund:
Me
efined Contribution pension fund: €1.05m fund value– Invested in All Equity Index, not currently making contributions
Spouse: DB pension – eligible to retire in 9 years at 50% final salary, conservatively estimate €45k pa pension plus lump sum of €135k. N.B spouse may defer retirement for approx 5 years if financially sensible. Their preference would be to retire in 15 years max
Other savings and investments:
Cash: €200k – subject of the question – obviously don’t intend to leave in cash
ETF: €150k in VWCE – had sort of ear-marked this for school fees
Deposit – Raisin - €75k ear-marked for home upgrades
Other information which might be relevant
Probably relevant to say, that given age and assets of parents it is like that we receive a six figure inheritance in 10-20 years and while obviously wouldn’t want to rely on this and clearly hope my parents live as long as possible, I mention it for completeness. Ultimately would like to use any money received to help our own kids so not factoring this in.
What specific question do you have or what issues are of concern to you?
I have just sold a second property and received €275k from the sale. I will use €75k to make some upgrades to our primary residence, but am unsure of the wisest course of action with the balance.
A lot of advice focuses on pensions given the tax advantages, but I am not sure if that’s the best course of action in our case given we’re in the relatively unusual position of having well-funded pensions. At present our mortgage feels high relative to our income and paying it down may be more sensible, but while I hope to increase my income in the next year or two, I worry that paying down the mortgage leaves us with very little flexibility as we head into a period that has the potential to be expensive, potentially school fees, teenagers, activities etc.
I wonder would investing – diversified index be a better choice that would give more flexibility. I have relatively high risk tolerance. If so, would I be better using an investment fund? I currently use ETFs on IBKR, but I know they are not the most tax-efficient.
Am I right in thinking that given our situation that putting more into my pension is probably not the right call given where it is at? Or should I put more in and aim to draw it down sooner? It’s an employer scheme. I have left that employment and am now self-employed. Could I “retire” for the purposes of that scheme early and continue to work for fees on a self-employed basis? The idea of retiring early is appealing to me!
Your age:45
Your spouse's age: 46
Number and age of children: 3 children – 3,10,12
Income and expenditure
Annual gross income from employment or profession: €130k
Annual gross income of spouse/partner: €85k
Me: Fee-based, part-time
Spouse: Public, full-time
Monthly take-home pay: €10,433
Other:
Child benefit: €5k pa
Gifts from parents (to me and spouse to avail of CAT exemption): €12k pa
In general we are spending more than we earn with significant mortgage and childcare for youngest. I have gone part-time and taken a pay cut to do so. We’re struggling to manage down expenses, though youngest starting school should help, but generally I would say we’re trying to walk back years of lifestyle creep. I have scope to take on further hours and am actively looking to do so.
Summary of Assets and Liabilities
Family home value: €1.9m
Mortgage on family home: €715,000
Net equity: €1.185m
Family home mortgage information
Lender: PTSB
Interest rate: 3.35
Fixed at 3.35% ending March 2031
Remaining term: 17y
Monthly repayment: € 4,790
Other borrowings – None
Do you pay off your full credit card balance each month - Yes
Pension information
Value of pension fund:
Me
efined Contribution pension fund: €1.05m fund value– Invested in All Equity Index, not currently making contributionsSpouse: DB pension – eligible to retire in 9 years at 50% final salary, conservatively estimate €45k pa pension plus lump sum of €135k. N.B spouse may defer retirement for approx 5 years if financially sensible. Their preference would be to retire in 15 years max
Other savings and investments:
Cash: €200k – subject of the question – obviously don’t intend to leave in cash
ETF: €150k in VWCE – had sort of ear-marked this for school fees
Deposit – Raisin - €75k ear-marked for home upgrades
Other information which might be relevant
Probably relevant to say, that given age and assets of parents it is like that we receive a six figure inheritance in 10-20 years and while obviously wouldn’t want to rely on this and clearly hope my parents live as long as possible, I mention it for completeness. Ultimately would like to use any money received to help our own kids so not factoring this in.
What specific question do you have or what issues are of concern to you?
I have just sold a second property and received €275k from the sale. I will use €75k to make some upgrades to our primary residence, but am unsure of the wisest course of action with the balance.
A lot of advice focuses on pensions given the tax advantages, but I am not sure if that’s the best course of action in our case given we’re in the relatively unusual position of having well-funded pensions. At present our mortgage feels high relative to our income and paying it down may be more sensible, but while I hope to increase my income in the next year or two, I worry that paying down the mortgage leaves us with very little flexibility as we head into a period that has the potential to be expensive, potentially school fees, teenagers, activities etc.
I wonder would investing – diversified index be a better choice that would give more flexibility. I have relatively high risk tolerance. If so, would I be better using an investment fund? I currently use ETFs on IBKR, but I know they are not the most tax-efficient.
Am I right in thinking that given our situation that putting more into my pension is probably not the right call given where it is at? Or should I put more in and aim to draw it down sooner? It’s an employer scheme. I have left that employment and am now self-employed. Could I “retire” for the purposes of that scheme early and continue to work for fees on a self-employed basis? The idea of retiring early is appealing to me!
