Am in early 60's & about to retire; was made redundant 7 years ago; am in a lower paying job since mid-2017; have a modest occupational pension (DC) that I hope not to trigger for several more years; of course, I will also have the state contributory pension, at 66, P.G! I have large cash savings (over €900k) that will be a key component of my retirement finances; so, how do I protect this against inflation while at same time have it generate some income for me? I do not have any debt/mortgage. My current net income is about €38k which is adequate but I will have large one-off expenses from time to time such as a new car, house repairs, travel and financial help to family.
Retiree seeks advice on Investing lump-sum savings
- Thread starter knockshe
- Start date
When do you expect to retire?
What's it worth?
Have you been contributing to it in recent years?
If you won't have maximised your tax relief on contributions (full tax relief on up to 40% of your gross income for age 60+) for this year and last year then perhaps you could use some of your cash lump sum (below) to do that?
Tax relief for pension contributions
This page outlines the tax relief for pension contributions
www.revenue.ie
Are you on track to meet the PRSI contribution requirements for a full contributory pension?
State Pension (Contributory)
The State Pension (Contributory), previously called the Old Age (Contributory) Pension, is payable to people aged 66 and over who have worked and paid enough social insurance contributions.
MyWelfare Homepage
MyWelfare is the online home of welfare services. It allows you easy online access to a range of services
services.mywelfare.ie
Voluntary social insurance contributions
Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.
There are many existing threads about where to put money so you should search and read some of those.
Unfortunately keeping it safe while also protecting it against inflation and generating returns in a low (even negative) interest rate/increasing inflation environment is very difficult and some trade-off of safety/risk and inflation erosion/returns has to be countenanced. Obviously you don't have to put the full €900k in one place and one risk/reward profile.
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moneymakeover
Registered User
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To protect yourself against inflation you need to buy assets
Real estate
Stocks and shares
right now there is a correction in the major indices which means the s&p500 and
Dow Jones are both down almost 10%
Better to buy this week than a week ago.
But you didn't arrive at 900,000 in the bank overnight so you must know these things
Real estate
Stocks and shares
right now there is a correction in the major indices which means the s&p500 and
Dow Jones are both down almost 10%
Better to buy this week than a week ago.
But you didn't arrive at 900,000 in the bank overnight so you must know these things
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This is very poor advice based on attempting to time the market.
Nobody can say that now is a good time to buy just because of a recent fall in the index.
By all means invest in something like this but not because of recent fluctuations in prices but rather because it's the appropriate investment option for a particular situation and investor (e.g. appropriate risk/reward profile, appropriate investment timeframe, appropriate part of an overall diversified portfolio etc.).
Thanks all; yes, I have maximised pension contributions in recent years; my pension value today is €700k and is in conservative mixed funds. Also, have enough PRSI contributions for contributory pension. Will likely retire within 2022. Yes, will read more of the threads here.
My risk aversion / excess caution over past 10 years has meant I missed out on equity markets' growth. Might just select some funds via Zurich /Irish Life/New Ireland/Other but need to figure best performers / mangmnt charges, etc.; also might manage a bit myself & buy some dividend stocks plus long-term holds such as Google, Amazon, Tesla; maybe some FOOTSIE stocks as it has been depressed for long time. Am toying with notion of a good financial advisor so need to check out options.
My risk aversion / excess caution over past 10 years has meant I missed out on equity markets' growth. Might just select some funds via Zurich /Irish Life/New Ireland/Other but need to figure best performers / mangmnt charges, etc.; also might manage a bit myself & buy some dividend stocks plus long-term holds such as Google, Amazon, Tesla; maybe some FOOTSIE stocks as it has been depressed for long time. Am toying with notion of a good financial advisor so need to check out options.
There's one or two of them on here, give great advice at times. You might get lucky and they'll reach out to you
On the face of it, your after-tax savings, together with the State contributory pension, should be more than adequate to fund the first 20 years or so of your retirement.
So, one approach that you could take is to keep your after-tax savings on deposit/in State saving products and switch the bulk (or even all) of your pension fund to a global equity index fund with the lowest AMC you can find.
When you come closer to the time when you expect to retire your pension, you can then start to gradually move to a more conservative allocation.
Given your level of assets, there is no need to take on any more risk than you are comfortable with - frankly, you have plenty to fund a comfortable retirement whatever you do.
Also, it’s important to look at your various accounts as a whole and not to focus on any individual account in isolation.
There are some good investment and tax planning reasons for holding a mix of cash (or at least state savings) and equities personally and holding a defensive mix of assets with bonds in a pension.
The goal should be to allow a combination of short term liquidity, ability to rebalance and making use of exemptions and allowances
Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie
The goal should be to allow a combination of short term liquidity, ability to rebalance and making use of exemptions and allowances
Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie