Age: 49
Spouse Age: 50
Three children, ages 12, 14, 16
Income and Expenditure
Annual gross income Me - €107k (I am starting a new job with a new employer in September - €13k lower package / no bonus but better work / life balance in a sector I’m genuinely interested in.)
Annual gross income spouse - €65k plus 10% bonus (recently started a new job on a €20k higher salary with employer pension contributions as outlined below).
Monthly take home pay : €7.9k assuming I make minimum required pension contributions and spouse makes 30%. If I make 20% contributions that reduces to €7.3k. One of my questions below relates to this.
Type of employment:
Both employees in private sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving now but previously spenders.
Summary of Assets / Liabilities
Family Home Value : €475k / 500k
Mortgage on Family Home : €180k - fixed @ 2.99% until 2032 (BOI), repays €1,000 pm, remaining term 15 years.
Other borrowings : None, credit card paid in full monthly.
Savings and Investments
Raisin €10k emergency fund
Raisin €82k House fund saving €1,000 pm for a potential trade up.
AIB deposit €15k car or AVC fund
Irish Life Investment Fund €37k, 100% Global equities, AMC 1.25%, earmarked as a medium / long term plan towards for example college fees.
Pensions
Me
Previous defined contribution pension, €530k, 100% global equities, 0.09% AMC, retirement age 65
Previous defined benefit pension, €5k pa from age 65.
Current Occupational pension €45k, 100% global equities, 0.31% AMC - considering a €15k AVC here before I leave this employer
New Pension will be a PRSA with a 0.75% AMC. 8% contribution me, 9% contribution (ER)
Spouse
Personal PRSA, €45k, 0.92% AMC, 100% global equities, contributing 25% for the last few years.
Zurich PRSA, AMC 1% with new employer - ee contributions of 5%, employer 8%
Other investments / property
Spouse owns 1/5 of a modest property with an elderly relative having residency rights so not factoring this into our planning.
Total Net Assets : c€1m
Life Insurance / Other information
€500k each and death in service 4 x (me)
Mortgage Protection (so reducing balance)
Income protection via work pension scheme (me)
Critical illness (spouse)
We also have wills made.
What specific questions do you have / issues that are of concern to you?
We had always intended to trade up, for various reasons we were never quite in a position to do it. While our ages will now restrict us in the term of a new mortgage, I think based on my pensions, we could potentially get a 20 year term which we would still intend to clear within 15 years. I would love to get views on the following
We have both changed / are about to change jobs (mine being the reason we have not moved in the last 24 months, I knew I couldn’t sustain the hours with family life so didn’t want to commit to a larger mortgage). Assuming all goes well with the new job we would like to start looking in the next 6-12 months at houses worth around €750k. This would require a mortgage of c€350k along with equity of c€300k and cash €100k. We live within commuting distance of Dublin so several colleges / universities and I would see at least two kids at any one time potentially living at home into their twenties. I would like to be able to do that and all be comfortable and have our own space etc.
I currently drive a 2014 car which has served me very well and which I was not expecting to change yet except I have negotiated working part days in office / part home so a car is essential. Spouse has a company car which is sufficiently big enough to be used as the family car and therefore a new car for me can be smaller. I will travel 75kms 3 times a week. I'm struggling to decide how to finance this as I can't believe how expensive cars now are (c€35k for a 3 year old hybrid) and don't want to eat into our 'House' savings. I do have €15k set aside which I was planning to use to make an AVC before I leave my current employer as the AMC on that pension is only 0.31% - I am reluctant not to do this but maybe I am overly focused on pensions at the expense of the here and now.
Again, I have been very focused on pension contributions and currently contribute the max (although as above I do have some capacity to make a lump sum AVC for last year and in respect of this years bonus). In terms of future pension contributions, we plan for my spouse to max his pension contributions given his fund is so low, however I'm unsure what to do about mine. Given a potential house purchase / college looming maybe I should just contribute the minimum of 8% and save an additional €600pm in cash. I am struggling with this decision as it goes against what I have been doing to date although in hindsight I wish we’d prioritised our family home over pensions 10 years ago!
In summary looking for views on funding a trade up / car purchase or AVCs and future pension contributions in the context of our overall positions.
Thank you for reading – I appreciate it’s a long one.
Spouse Age: 50
Three children, ages 12, 14, 16
Income and Expenditure
Annual gross income Me - €107k (I am starting a new job with a new employer in September - €13k lower package / no bonus but better work / life balance in a sector I’m genuinely interested in.)
Annual gross income spouse - €65k plus 10% bonus (recently started a new job on a €20k higher salary with employer pension contributions as outlined below).
Monthly take home pay : €7.9k assuming I make minimum required pension contributions and spouse makes 30%. If I make 20% contributions that reduces to €7.3k. One of my questions below relates to this.
Type of employment:
Both employees in private sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving now but previously spenders.
Summary of Assets / Liabilities
Family Home Value : €475k / 500k
Mortgage on Family Home : €180k - fixed @ 2.99% until 2032 (BOI), repays €1,000 pm, remaining term 15 years.
Other borrowings : None, credit card paid in full monthly.
Savings and Investments
Raisin €10k emergency fund
Raisin €82k House fund saving €1,000 pm for a potential trade up.
AIB deposit €15k car or AVC fund
Irish Life Investment Fund €37k, 100% Global equities, AMC 1.25%, earmarked as a medium / long term plan towards for example college fees.
Pensions
Me
Previous defined contribution pension, €530k, 100% global equities, 0.09% AMC, retirement age 65
Previous defined benefit pension, €5k pa from age 65.
Current Occupational pension €45k, 100% global equities, 0.31% AMC - considering a €15k AVC here before I leave this employer
New Pension will be a PRSA with a 0.75% AMC. 8% contribution me, 9% contribution (ER)
Spouse
Personal PRSA, €45k, 0.92% AMC, 100% global equities, contributing 25% for the last few years.
Zurich PRSA, AMC 1% with new employer - ee contributions of 5%, employer 8%
Other investments / property
Spouse owns 1/5 of a modest property with an elderly relative having residency rights so not factoring this into our planning.
Total Net Assets : c€1m
Life Insurance / Other information
€500k each and death in service 4 x (me)
Mortgage Protection (so reducing balance)
Income protection via work pension scheme (me)
Critical illness (spouse)
We also have wills made.
What specific questions do you have / issues that are of concern to you?
We had always intended to trade up, for various reasons we were never quite in a position to do it. While our ages will now restrict us in the term of a new mortgage, I think based on my pensions, we could potentially get a 20 year term which we would still intend to clear within 15 years. I would love to get views on the following
We have both changed / are about to change jobs (mine being the reason we have not moved in the last 24 months, I knew I couldn’t sustain the hours with family life so didn’t want to commit to a larger mortgage). Assuming all goes well with the new job we would like to start looking in the next 6-12 months at houses worth around €750k. This would require a mortgage of c€350k along with equity of c€300k and cash €100k. We live within commuting distance of Dublin so several colleges / universities and I would see at least two kids at any one time potentially living at home into their twenties. I would like to be able to do that and all be comfortable and have our own space etc.
I currently drive a 2014 car which has served me very well and which I was not expecting to change yet except I have negotiated working part days in office / part home so a car is essential. Spouse has a company car which is sufficiently big enough to be used as the family car and therefore a new car for me can be smaller. I will travel 75kms 3 times a week. I'm struggling to decide how to finance this as I can't believe how expensive cars now are (c€35k for a 3 year old hybrid) and don't want to eat into our 'House' savings. I do have €15k set aside which I was planning to use to make an AVC before I leave my current employer as the AMC on that pension is only 0.31% - I am reluctant not to do this but maybe I am overly focused on pensions at the expense of the here and now.
Again, I have been very focused on pension contributions and currently contribute the max (although as above I do have some capacity to make a lump sum AVC for last year and in respect of this years bonus). In terms of future pension contributions, we plan for my spouse to max his pension contributions given his fund is so low, however I'm unsure what to do about mine. Given a potential house purchase / college looming maybe I should just contribute the minimum of 8% and save an additional €600pm in cash. I am struggling with this decision as it goes against what I have been doing to date although in hindsight I wish we’d prioritised our family home over pensions 10 years ago!
In summary looking for views on funding a trade up / car purchase or AVCs and future pension contributions in the context of our overall positions.
Thank you for reading – I appreciate it’s a long one.
