Trevize,
First thing to consider do you like where you live? Are you and the family happy with the area?
Five years time you have your loan payed. Your will then be starting the most expensive stage regarding the children?
Can you extend your current property attic room etc?
On your income sure you could jump again. That said I am sure you and your wife have worked hard to chip away and almost wipe out your borrowings.
Stay where you are if the area suits. Enjoy the kids they will be gone before you know it.
One issue which I do think needs addressing is your pension. You should be making AVCs. That 5% just isn't enough, and €100k is behind where someone of your means should be.
Fair comment , I'm planning to start taking my bonus as an AVC rather than as cash which should help.
Can I ask if your children were to go to college/university is it possible that they would stay with you and commute, or likely they would have to live away from home?
The reason I am asking is - pushing it, the 3 year old would be roughly 9 by the time the eldest went to college, so could conceivable have the box room until then. If they eldest was to leave home then, they could be given the box room and the youngest upgraded ! It is something worth considering.
If it is likely that they will stay living with you during the 3rd level years, then I think you will need more space. I don't think it will be feasible as they are all in their teens/early 20's otherwise. A rotation system on rooms is unlikely to work (giving the bigger rooms to the exam class students).
If the roof is not suitable for an extension is it possible to change the type of roof you have (square it off etc), as this would be cheaper than upgrading the house.
The other issue of concern is bathrooms - teenages spend lots of time in their and you all will want to get out at the same time in the morning !
I think you need to consider all of these and then determine if you need to upgrade the house or not. You should also discuss the possibility of an attic renovation with an architect who may be able to determine what is possible or not.
I also suggest you consider if/how you are planning to fund the children's third level education. It is only 6 years away, especially if you plan to upgrade the house. If you don't upgrade it, you will be mortgage free so should be possible. If you do upgrade, will that put a financial strain on you ? Think of the registration fees alone !
Finally, I agree with Gordon - the pension appears to be low. Using the Pension Authority calculator, it puts you in line for a total pension pot of 400,000 euro, worth around 15,800 a year (in today's money). I am guessing your wife's pension would be worth more than that using the 'years service/80 rule'.
I was once told that to achieve roughly 50% of your salary as a pension, you would need to pay roughly 25% of your salary into it from the outset (as a reasonable guide) - although others are open to correct me on this.
I wouldn't be surprised if they were still around in their mid 20's ! This is really what sparked our thinking of the move, that we'd end up with an adult living in the box room
True, but you still will have some childcare costs for a few years and you are entering an expensive phase of a child's life - the teenage years. If you are carrying a reasonable sized mortgage into this you do need to do it with your eyes open.I'd imagine it won't be any worse than child care which runs us around 12-13K a year but definitely something we need to include in our thinking.
Your wife is now 42. Your youngest will start secondary in say 9 years time. She has been doing part time for roughly 10 years. How realistic is it for her to go back to full time after 20 odd years part time? I would have my doubts. I know a lot of people who talk about going back once the kids are older, but never do !I'm hoping my wives pension will shore us up a bit and the use of my bonus and/or additional monthly payments. My wife is likely to return full time once the kids are in secondary school which will help as well.
Other borrowings – car loans/personal loans etc: 320
Savings and investments: 20K cash
One issue which I do think needs addressing is your pension. You should be making AVCs. That 5% just isn't enough, and €100k is behind where someone of your means should be.
This is a clear case where you should not be making AVCs at the moment. Yes, your pension fund is too low. But you have almost cleared your mortgage, so you have plenty of assets. You may well be trading up in the next year or two. You will also need money for your children's education. You need to build us accessible assets to fund these. Do not put money away in your pension.
When the kids are sorted and your mortgage is back under control, you will then have plenty of spare cash to max your pension contributions.
Brendan
It's the power of compounding over time that builds a meaningful pension fund.
Mad. I wouldn't dream of moving just because the box room might be a bit of a squash and a squeeze for the youngest. In a year or two, when it makes sense, you can just separate the older two and stick the youngest in the box room. By the time the youngest is a teenager the eldest may well have moved out or be away at college in which case the youngest will get an upgrade.The question is, are we mad to consider taking on 300K+ of debt
But the 3.1% return does nothing to fund the individual's retirement.
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