Moneymakeover Planning for pension

[May#19]

Personal details

Your age: 45

Number and age of children: 3
Two are adults and one in secondary

Income and expenditure
Annual gross income from employment or profession: 40,000

Monthly take-home pay: 2,650

Type of employment - e.g. Employee or self-employed.
Employer type: e.g. public servant, private company. Civil service

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


Summary of Assets and Liabilities
Family home value: 500,000
Mortgage on family home: none
Net equity: 500,000

Cash: 26,000
Defined Contribution pension fund: I will have 23 years worked for a civil service pension by retirement.


Total net assets:

Other borrowings – car loans/personal loans etc None

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?

Pension information

Value of pension fund: no idea of this, I only started working in civil service 2.5 years ago and no pension before that.

Other savings and investments:

Life Insurance:

Life insurance: I pay €30 monthly

Other information which might be relevant

College for my youngest will be covered by my ex so no planned costs for that in the future.

My question is regarding my pension, I intend to either buy AVCs or buy back years and have a full 40 years civil service pension. I’m not sure what the best option is on this.

I currently only pay 20% tax so holding off until I hit the 40% tax bracket. I will then use all money I receive above that to add to my pension.

I will also have the contributions to receive a full state pension.

I’m quite the novice with this kind of thing so grateful for any advice on my pension plan.

 

[ClubMan]

Number and age of children: 3
Two are adults and one in secondary

Income and expenditure
Annual gross income from employment or profession: 40,000

Are the adult children working and contributing anything to the household?

Defined Contribution pension fund: I will have 23 years worked for a civil service pension by retirement.

Pension information

Value of pension fund: no idea of this, I only started working in civil service 2.5 years ago and no pension before that.

Do you mean two different pension here or what?
First step would be to clarify what your existing pension cover is.

Life insurance: I pay €30 monthly

Do you need this?
If you died then there is no mortgage or other debts to clear and presumably the youngest child would be cared for by the adult children and/or ex.?

College for my youngest will be covered by my ex so no planned costs for that in the future.

Based on your income of €40K (but not clear about other assessable income in the houshold?) wouldn't some or all of tuition fees, student contribution and maintenance be covered by the Free Fees Initiaitive and SUSI grant?

Irish Times - "[SUSI] Grants extended to students with household incomes of up to €115K"

https://www.irishtimes.com/ireland/education/2025/04/03/grants-extended-to-students-with-household-incomes-of-up-to-115000/ (Not paywalled for me at the moment...) https://www.susi.ie/news/susi-is-now-open-for-new-applications-for-academic-year-202526/

www.askaboutmoney.com

I will also have the contributions to receive a full state pension

You can get your PRSI contribution/credits statement from MyWelfare to check what you have right now and if you are on track for the full Old Age Contributory Pension.

My question is regarding my pension, I intend to either buy AVCs or buy back years and have a full 40 years civil service pension. I’m not sure what the best option is on this.

There are many existing threads/posts about public service workers using AVCs to boost their PS pension cover that might be worth checking out.

I currently only pay 20% tax so holding off until I hit the 40% tax bracket. I will then use all money I receive above that to add to my pension.

Won't that mean only marginal contributions unless you're in line for a significant salary increase imminently?

As ever in the context of a Money Makeover my opinion is that it's critical to get a clear understanding of one's houshold income and expenditure to understand one's base line essential expenditure and to make plans for the future and retirement.

Also make sure that you're claiming all available tax credits - e.g. are you eligible for and claiming the Single Parent Child Carer tax credit for the youngest child? And Child Benefit?

 

[Protocol]

Pension information

Value of pension fund: no idea of this, I only started working in civil service 2.5 years ago and no pension before that.

All State and PS pensions in Ireland are unfunded, so you can ignore the references to pension funds.