Moneymakeover Want to retire in <4 years, not sure about current position

99thFloor

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Personal details

Your age: 63 in September
Your spouse's age: 62
Number and age of children: all adults living elsewhere

Income and expenditure
Annual gross income from employment or profession: approx. EUR105K
Annual gross income of spouse: approx. EUR60K

Monthly take-home pay:
6200
3200

Type of employment
Private PAYE
State-funded charity PAYE

In general are you:
(a) spending more than you earn, or
(b) saving?
Been saving, mostly in PRSA, for 5 years. Before that, didn’t save too much.

Summary of Assets and Liabilities
Family home value: 490K
Mortgage on family home: 100K
Cash: 15K, saving 400/mo plus occasional topups and withdrawals
Bitcoin: invested 9K, worth 91K today
Pension information
Me: PRSA – 256K balance, paying in 2.9K per month (forecast age 65: 355K)
Spouse: work pension – 115K balance (forecast age 65: 150K)
I’m eligible for partial US state pension €15Kpa if taken from age 67, could take now early at 62 for 11.5Kpa
We’ve both applied for UK state pension scheme – have 6 years on record, hope to pay for 18 past years and 4 future years which would result in 75-80% of full UK pension from age 67
We’re both eligible for Irish state pension, but probably somewhere around 80-90% of full amount

Family home mortgage information
Lender PTSB
Interest rate 5-year green mort fixed at 3.2% for 3 more years
Remaining term: 6 years
Monthly repayment: 1743 but paying extra 10K p.a. to pay it off quicker (3-4 years from now)
Other borrowings – car loans/personal loans etc
None
Do you pay off your full credit card balance each month? yes

Other information which might be relevant
Life insurance: 116/pm joint term life policy worth 150K but expires 2034, also 120/pm mort protection policy decreasing according to mort balance

What specific question do you have or what issues are of concern to you?

Are we doing anything wrong with regard to making extra payments on mortgage, large portion of income going to PRSA, holding off on selling bitcoin, life insurance/mortgage protection, not having much cash? Should I take my US state pension early, or would that make no sense because of current income tax situation?

Housing prices are very high in our area. We would like to stay in the area but move to a smaller place in a more desirable (close to village) location but it seems like a decent-sized 2-bedroom house or apartment in our desired location costs even more than our current place, a 4-bedroom duplex on the outskirts. With 100K left on mortgage, it’s hard to get our heads around how we could accomplish buying something even for the same cost that ours would sell for – we feel like we'll have to wait till it’s paid off. All our focus is on paying off mortgage and PRSA saving – but are we missing something?
 
If it were me I'd sell the bitcoin and pay off most of the mortgage.

Going into retirement you shouldn't have any debt and you're killing yourselves overpaying this debt when you can take a shortcut and off load bitcoin at a good profit.

You'll also free up 120 pm on mortgage protection

I'm sure others will disagree but that's what I'd do.
 
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Life insurance: 116/pm joint term life policy worth 150K but expires 2034,
Do you really need this?
The mortgage would be cleared via the mortgage protection life insurance should one of you die.
Would the surviving spouse actually need a payout should the other die?
Do your jobs provide death in service benefits?
What do you mean it's worth €150K?
That's what it would pay out of one of you dies?
Or is there some savings element to it that will pay out at the end of the term even if both of you are still living?
 
I'm sure others will disagree but that's what I'd do.
It's certainly crossed our minds. The overpaying isn't quite killing us (our day to day expenses aren't high), and given the capital gains tax selling that asset won't clear the mortgage, which is why we've hesitated. But I appreciate the advice.
 
Do you really need this?
Good question.
Would the surviving spouse actually need a payout should the other die?
Do your jobs provide death in service benefits?
What do you mean it's worth €150K?
That's what it would pay out of one of you dies?
Or is there some savings element to it that will pay out at the end of the term even if both of you are still living?
We took out both policies 8 years ago when our retirement savings was almost non-existent and our mortgage was 2.8x bigger, and we were worried about what would happen if one or both of us passed away young. It's a term life policy so it's only "worth" 150K if either of us dies between now and 2034 (and we're still making payments). It feels like our situation now is less precarious than it was when we took it out, and I'm not sure we do need it anymore.
 
You don’t actually say, but are you both maxing out your AVC limits? And did you do so for 2024 also?
 
You don’t actually say, but are you both maxing out your AVC limits? And did you do so for 2024 also?
Mine is maxed out based on my regular salary; a portion of my annual employment income (10-15%) is variable compensation and not guaranteed, so I hesitate to go higher.

I'm not sure about my spouse, I think it may be close but not maxed out.
 
You can make AVC’s for the prior year until Oct 31st of the current year, so you should be able to calculate your 40% limit and top up accordingly.

Personally, I’d do this (and purchase the UK years) ahead of overpaying the mortgage.

Even if you put it into cash equivalents, you’ll be getting 25% of each fund back tax-free in a few short years, which can be used to clear your mortgage if necessary.
 
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