world201812
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- 68
Age: 42
Spouse’s/Partner's age: 38
Annual gross income from employment or profession: €50K
Annual gross income of spouse: €50K
Type of employment: – PAYE/Public Sector x 2
PPR: €550K (was value pre-Covid but god only knows now), €270K is mortgage outstanding, on KBC 3 year fixed rate of 2.55%
Second property: €450 (was value pre-Covid but god only knows now), €100K is mortgage outstanding, PTSB tracker of next to nothing.
Other borrowings – None
Do you pay off your full credit card balance each month? – Don’t Have credit cards
Savings and investments: €50k in current account
Do you have a pension scheme? Both in Public Service scheme, one in pre 2013 and one post 2013 scheme
Ages of children: 4 and 3
Life insurance: Zurich Life Guaranteed Protection Plan with accelerated serious illness cover etc, not cheap at €110 per month, on the PPR only.
There is a second Life insurance policy on the second mortgage, in the one of our names who the property belongs to, €15 per month.
One of us is late entrant to public sector at 35, and has effectively no pre-public sector pension benefits (post 2013 public sector pension scheme), the second person in the (pre 2013 public sector pension scheme) won’t be far off a full pension.
Last year we both did max AVC payments into separate PRSA’s we have set up, the reason we have set these up is both work in areas of the public sector where you don’t want to be working far beyond 60, if at all possible.
The savings we have of €50k are earning no interest for us, and in terms of priorities we have mortgage payments of almost €2,000 per month, before we rent out the second property with a possible rent of €2,000 per month on it.
In recent years we prioritised paying off as much debt as possible, our PPR mortgage is approx €1,300 per month and second mortgage is approx 650 a month, and we’ve yet to rent second property out.
Our priorities are to be in a position to boost our pension pots so that we can look at the possibility of retiring as early as possible, and also reduce our mortgage debt.
On the pension background information, one of us will have 10 year’s worth of UK pension benefits come retirement.
Among my questions, some of which are probably best suited to the pensions forum, as below. Any general observations and thoughts appreciated.
Should we do max of pension buy-back of years and/or AVC?
If we are to pension buy-back of years would we be better off doing that on the pre-2013 employee scheme as opposed to post 2013 scheme?
Or should we prioritise early pay off of mortgage?
What sort of rainy day fund should a couple with two kids and public sector jobs have?
(I would think not a huge amount required as if, heaven forbid, anything happens health wise to either of us, we have a very good life assurance scheme in place).
Our main outgoings would be childcare, one of us only got our career on track in last couple of years, and will be significantly behind on pension contributions as very late entrant to public sector.
Long term we’d like to have second property for children when adults to have as theirs, as their home, or to sell it and split proceeds.
In terms of the second property, if we were to rent it out, what % of the gross income will we get net after taxes etc?
Among considerations, if possibility is one of us to take unpaid leave to mind children etc, if our joint incomes coupled with potential tax liability on rental income mean we might pay a lot of tax, one of us might be better off staying at home more and incurring less childcare cost?
Also, on the rental property, in light of falling rents I’ve read about, and fact so many people working from home would we be better off leaving second property vacant until the autumn when the rental market may pick up?
Or if we want to keep rental property for children many years from now, and if face prospect of 50% tax on its income, coupled with risk of rogue tenants, should we just incur mortgage costs with no rental income, and leave property vacant?
What’s the most prudent thing to do?
Spouse’s/Partner's age: 38
Annual gross income from employment or profession: €50K
Annual gross income of spouse: €50K
Type of employment: – PAYE/Public Sector x 2
PPR: €550K (was value pre-Covid but god only knows now), €270K is mortgage outstanding, on KBC 3 year fixed rate of 2.55%
Second property: €450 (was value pre-Covid but god only knows now), €100K is mortgage outstanding, PTSB tracker of next to nothing.
Other borrowings – None
Do you pay off your full credit card balance each month? – Don’t Have credit cards
Savings and investments: €50k in current account
Do you have a pension scheme? Both in Public Service scheme, one in pre 2013 and one post 2013 scheme
Ages of children: 4 and 3
Life insurance: Zurich Life Guaranteed Protection Plan with accelerated serious illness cover etc, not cheap at €110 per month, on the PPR only.
There is a second Life insurance policy on the second mortgage, in the one of our names who the property belongs to, €15 per month.
One of us is late entrant to public sector at 35, and has effectively no pre-public sector pension benefits (post 2013 public sector pension scheme), the second person in the (pre 2013 public sector pension scheme) won’t be far off a full pension.
Last year we both did max AVC payments into separate PRSA’s we have set up, the reason we have set these up is both work in areas of the public sector where you don’t want to be working far beyond 60, if at all possible.
The savings we have of €50k are earning no interest for us, and in terms of priorities we have mortgage payments of almost €2,000 per month, before we rent out the second property with a possible rent of €2,000 per month on it.
In recent years we prioritised paying off as much debt as possible, our PPR mortgage is approx €1,300 per month and second mortgage is approx 650 a month, and we’ve yet to rent second property out.
Our priorities are to be in a position to boost our pension pots so that we can look at the possibility of retiring as early as possible, and also reduce our mortgage debt.
On the pension background information, one of us will have 10 year’s worth of UK pension benefits come retirement.
Among my questions, some of which are probably best suited to the pensions forum, as below. Any general observations and thoughts appreciated.
Should we do max of pension buy-back of years and/or AVC?
If we are to pension buy-back of years would we be better off doing that on the pre-2013 employee scheme as opposed to post 2013 scheme?
Or should we prioritise early pay off of mortgage?
What sort of rainy day fund should a couple with two kids and public sector jobs have?
(I would think not a huge amount required as if, heaven forbid, anything happens health wise to either of us, we have a very good life assurance scheme in place).
Our main outgoings would be childcare, one of us only got our career on track in last couple of years, and will be significantly behind on pension contributions as very late entrant to public sector.
Long term we’d like to have second property for children when adults to have as theirs, as their home, or to sell it and split proceeds.
In terms of the second property, if we were to rent it out, what % of the gross income will we get net after taxes etc?
Among considerations, if possibility is one of us to take unpaid leave to mind children etc, if our joint incomes coupled with potential tax liability on rental income mean we might pay a lot of tax, one of us might be better off staying at home more and incurring less childcare cost?
Also, on the rental property, in light of falling rents I’ve read about, and fact so many people working from home would we be better off leaving second property vacant until the autumn when the rental market may pick up?
Or if we want to keep rental property for children many years from now, and if face prospect of 50% tax on its income, coupled with risk of rogue tenants, should we just incur mortgage costs with no rental income, and leave property vacant?
What’s the most prudent thing to do?