What to do with cash to assist in retirement?

D

DCSF

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Two public servants, 56 & 55, will retire in few years..but due to changing jobs etc neither will have full pension (maybe 27 years each)
No AVcs but intend doing them now to boost pensions
Only small balance left on mortgage on house (maybe 40k left- 5 years left) House value about 700k and near all amenities we'll need as we get older.
One son has own house, other returning from abroad soon and seeking to buy a house.
250k odd cash in state savings + pension lumps sums to come when we retire..
So, pensions being small enough, what's best options to use the cash to assist in retirement?
 
Brendan Burgess said:
1) Max your pension contributions
2) Pay off your mortgage
3) Put the balance in a diversified portfolio of shares

Brendan
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Thanks brendan,


1. we intend to
2. I've had lots of health issues.. if I kicked the bucket mortgage would be paid off...its cheap money???
3 Where do I go / talk to about this??

Thanks again
 
Just pay off the mortgage, it is not logical to have a loan with €250K in the bank.

I am sorry to hear about your health issues, would you consider retiring now and living off the €250K before your pension kicks in at 66? It might help you health wise not to have the stress of work? If you pay off mortgage then you have €21K a year to spend for the next 10 years. That with your spouses income may be sufficient for you both?

There are lots of good financial advisors who post on these forums, go to one of them for professional financial advice about investing.
 
DCSF said:
2. I've had lots of health issues.. if I kicked the bucket mortgage would be paid off...its cheap money???
Click to expand...

You don't always have to stop the mortgage protection insurance once the mortgage is paid off, if it's a standalone policy then no reason why you can't keep paying it and it would still pay out if needed.
 
Monbretia said:
You don't always have to stop the mortgage protection insurance once the mortgage is paid off, if it's a standalone policy then no reason why you can't keep paying it and it would still pay out if needed.
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This is a key point.

Given that you have health issues, you probably should keep the policy.

It would be very unlikely that is linked to the mortgage.

As Monbretia says, it will pay out whether you still have a mortgage or not.

Just check to see if it's a reducing balance policy. In other words, the balance reduces over the life of the policy. But even so the cover should still be about €40k now so if the premium is small, it's good value. In the last year or so if the amount has dropped down to €4k or so, it might be worth cancelling.

Brendan
 
DCSF said:
other returning from abroad soon and seeking to buy a house.
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I had missed this last night.

It's hard to get on the property ladder. If your son needs money, you could lend it to him. But make sure that there is a letter or agreement accompanying it showing it to be a loan which is to be repaid.

Brendan
 
Monbretia said:
You don't always have to stop the mortgage protection insurance once the mortgage is paid off, if it's a standalone policy then no reason why you can't keep paying it and it would still pay out if needed.
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Interesting, I never thought of this...I'll investigate...

Also I don't intend 'kicking the bucket' for a very long time..im grand now, but recent Heart n 'C' illnesses have me very aware of my mortality...

I can retire at 60 but very happy in job..love it really..

So thanks all for suggestions..

Mortgage insurance one sure is interesting and I'll also investigate how I could loan son say 200k and be sure I'd get repayments lol

Ye are all fab
 
Monbretia said:
You don't always have to stop the mortgage protection insurance once the mortgage is paid off, if it's a standalone policy then no reason why you can't keep paying it and it would still pay out if needed.
Click to expand...
Am I missing something, as the mortgage balance reduces the payout also reduces, not much will be paid out unless it’s a life assurance policy for a certain value?
 
Nordkapp said:
Am I missing something, as the mortgage balance reduces the payout also reduces, not much will be paid out unless it’s a life assurance policy for a certain value?
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Well it does yes but depends on how much it's costing v benefit at any given time. A tipping point will be reached as the balance decreases below a certain point where it is no longer value for money. But as the op is reluctant to clear mortgage as mp would pay out if needs be then it's the best of both worlds to pay off mtg from savings thus saving interest and then keep policy which means payout would still happen in worst case scenario.

It's an option and shouldn't be discounted depending on cost v benefit of policy. I retained two policies when I greatly reduced my mortgage balance, one was level which I still have and one was decreasing which I kept for years until the amount wasn't worth the cost and cancelled it a few years ago. Both were costing me in or around €120 pa
 
DCSF said:
Two public servants, 56 & 55, will retire in few years..but due to changing jobs etc neither will have full pension (maybe 27 years each)
No AVcs but intend doing them now to boost pensions
Only small balance left on mortgage on house (maybe 40k left- 5 years left) House value about 700k and near all amenities we'll need as we get older.
One son has own house, other returning from abroad soon and seeking to buy a house.
250k odd cash in state savings + pension lumps sums to come when we retire..
So, pensions being small enough, what's best options to use the cash to assist in retirement?
Click to expand...
If you have the house to suit, in the right place, I think the rent a room scheme that allows a person to earn €14,000.00 a year tax free is a brilliant idea. There's also a sense of security in it if you're not always there. You'd have to work hard and for a long time to get the reward this offers.
 
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