What next - are we missing anything with our finances?

R

rania

Registered User
Messages
84
Personal details

Age:41
Spouse’s/Partner's age:43

Number and age of children:4
6,9,12,16


Income and expenditure
Annual gross income from employment or profession:0
Annual gross income of spouse:200k

Monthly take-home pay 8300

Type of employment: e.g. Civil Servant, self-employed
Public servant

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



Summary of Assets and Liabilities
Family home worth €650 with no mortgage
Cash of 80k
Defined Contribution pension fund:
Public service pension for spouse none for me



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?





Do you own any investment or other property? Yes but no income on it no access to it right now


Other information which might be relevant

Life insurance:for spouse



What specific question do you have or what issues are of concern to you?
What should we do next, just paid off mortgage, have savings, more money due this year about another 100k, should we get avc for spouse I think he is 2 years short of full service by retirement. Where to put savings?
Are we missing anything. Thanks
 
With potential savings of €180K I would definitely consider investing them in shares to grow your wealth in the next 25 years before your husband retires.

He will have a defined benefit pension, so do take advice on the AVC’s to bring his final pension pot to the most tax effective maximum he can achieve.

I am not looking for details but what is the story with your other property. You are the legal owners of a property but you do not seem to be able to sell it to add to your wealth or rent it to increase your income? As I said I don’t need the backstory but you are not wealthy enough to allow this to continue. You need to be able to grow your wealth to provide for yourself, your spouse, and your children into the future. Say the house is worth €350K and you sell it and you now have €180+€350K. Now you have €530K pot, you can decide to keep €20K in cash, €110K in a saving vehicle for the kids education, and invest €400K in shares for long term wealth growth. Or a myriad other options depending on your future plans. So I am recommending removing emotion from the other property issue. Go to you solicitor and start taking steps to regularise the situation.

Best of luck.
 
4 kid's.... College. Starting in 2 years. 16 years before all are potential finished. If living away from home factor in at a min 15k per annum. A expensive time ahead.
 
Bluefin said:
4 kid's.... College. Starting in 2 years. 16 years before all are potential finished. If living away from home factor in at a min 15k per annum. A expensive time ahead.
Click to expand...
If they work part time while study, they could learn some beneficial skills too. Or simply work full time for a few years if they aren't sure what they want to study. This way a lot of money could be saved.
 
You could start with a bit of life cover. You mentioned that your husband has some but did not say how much. If it is the one from work, it is €200,000 plus 50% of the annuity he would have got if he lived to retirement. But nothing for you. On a salary of €200k, I presume he has to work hard for it. If he has 4 kids to look after, his ability to work will be curtailed.

With the mortgage just paid off, you need to redirect those repayments into growing wealth. Your children's education costs will be the biggest costs if they all go to 3rd level and needs to be paid for. No need to do all the heavy lifting yourself, you need to get some help from capital markets too.

If you husband is two years short on the max pension, he should look at buying back years instead of AVC's. They tend to be very good value.

He should do a funding check first on the value of his pension. Work out what the pension he is due to get and multiply it by 26 to get the value at 65. Add the lump sum payment on top of that. With a pensionable salary of €173,600 and 38 years, his pension would be valued at €2,143,960 plus the lump sum which is over the €2m threshold. The taxation on going over is penal, so AVC's or buying back years isn't a good use of money due to the tax he will have to pay on it.


Steven
www.bluewaterfp.ie
 
rania said:
What should we do next, just paid off mortgage, have savings, more money due this year about another 100k, should we get avc for spouse I think he is 2 years short of full service by retirement.
Click to expand...
What is his "normal retirement age"? If he joined before 1st April 2004 it is probable 60, but 65 if he joined after that date.
 
  • Now that the mortgage is paid, do a full review of life assurance and the house insurance and make sure all are properly covered
  • Update/Do a will- I know it's morbid but it makes sense and also who would be your kids guardians if the worst came to the worst?
  • Full tax review- have you claimed for everything you can and are you both set up in the best manner possible
  • Have you ever worked or ever contributed to a pension anywhere and have either of you ever worked in the UK. ? If either of you have, you may be in a position to top up your National Insurance contributions and get a UK state pension. See other posts on here on that but you need to move quickly on it as a deadline is approaching
  • 4 kids to put through college is going to cost minimum €250k if all lived away from home, probably €75k to €100k if living at home, And yes, I know they can work part time etc but that is the minimum sum of money you and the kids are going to have to fund
  • Check your health insurance, do you have adequate cover and see my above comment re tax, you may still be able claim for costs not covered by your insurer
  • Take a good holiday, you have the cash and the kids collectively are the right age, in a couple of more years, the eldest is likely to want to do their own thing
 
You must log in or register to reply here.
Back
Top