Moneymakeover When can we retire?

[gaahead]

Age: 52
Spouse’s/Partner's age: 49

Ages of children: 17, 14 – Both in private school, live in Dublin so hopefully college will be from home.

Annual gross income from employment or profession: €154,000
Annual gross income of spouse: €60000 ( 75000 annually but currently works shorter days)

Monthly take-home pay €9,000

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

Me Private,

Spouse Public post 1995


In general are you:
(a) spending more than you earn, or
(b) saving? Starting fresh now as have depleted more or less everything with house. Need to review spending again now to see where we are as it was 2 years of just money going out..

Rough estimate of value of home €1,250,000
Amount outstanding on your mortgage: €490k ( 16 years left )
What interest rate are you paying? BOI fixed 2.8% for next 5 years

Other borrowings – car loans/personal loans etc CAR loan 500pm

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card? My wife it can vary but her limit is 2800

Savings and investments: Cash €13,000 on deposit no interest rate

Do you have a pension scheme?

Me:

1). Old pension from years ago valued at €15,000

2). Old work pension that currently with irish life ARF world equities I think valued at €205,000

3). Old Work db pension currently valued at €6,000 per annum from 65

4). Current work DC pension current value €170,000 match employers and currently adding 26% of salary each month to pot.

I will have enough stamps for a full state pension from 56 ( the joys of working every weekend from school and college)



Wife:

HSE pre 95 contract. Currently 25 years’ service and looking to leave at 60 which will be circa 35 years’ service. I believe her pension is based on 50% of final salary and a lump sum of 1.5 salary all based from 40 years’ service of course which she will not have..

UK state pension: My wife will qualify for a full UK state pension from 67 thanks to all on AAM

State pension: Currently my wife need about another 17 years of credits to qualify for a full state pension.



Do you own any investment or other property? No


Life insurance: Yes, income protection and death in service with work. Not sure about my wife.


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

We recently bought and renovated our forever home which cost a lot more than expected and has depleted all available funds we had put aside over the years. The good news is we have a new A rated house now so don’t Forsee any work needed for a while.

I know we are just playing catch-up after house renovation and we are in an expensive time with the kids for the next few years but a few questions now are

My wife would like to retire at 60 and I would like to go at similar time when I’m 63 and enjoy pour time travelling etc but a few things to consider

1). My wife will not have 40 years of service for state pension and her HSE pension anything we can do about that?

2). Should my wife go back full time. The shorter days was to accommodate the kids but now I think she enjoys the shorter days

3). Living as we will still have a few years left on mortgage and with no state pensions till we are 67 the main aim will be clear all debts with lump sums and then use the remainder an potentially my ARF tio cover the years till state peniosn etc kick in?

4). Still a few things i would like to add to the house like solar so do I do that now with current savings or wait?

 

[ClubMan]

As ever, the first step in the context of such a question as posed in the thread title is to figure out what your actual household expenditure in all relevant categories is at the moment, and then try to project forward to the likely/best/worst case scenarios for when you're retired.

Moneymakeover - Household Budgeting Comparisons?

Not sure if the correct place... Life has been in (financial) flux for the last 4 years (house purchased, wedding, new baby, mat leave) but 2025 has brought some stability so I have had a look at our income and expenses. I track both pretty well. We both have decent incomes, don't live...

www.askaboutmoney.com

Until you have some idea of what you need to live on, now and in retirement, it's difficult to make plans to provide for this and to figure out when you can realistically retire.

 

[Sarenco]

To be fair, it’s very difficult to project forward your likely spending 10 years from now when your expenditure pattern is likely to be very different, with the kids hopefully off the payroll.

Similarly, it’s very difficult to predict what returns you might make on your pension funds.

For now, I would prioritise:-

1. Paying off the car loan ASAP;
2. Maximising tax relieved pension contributions/AVCs; and
3. If there’s anything left over, start paying down your mortgage ahead of schedule.

It’s certainly possible that you will be in a position to retire in 10 years but it requires real commitment. Frankly, you have a way to go yet.

 

[Raskolnikov]

You'll easily be able to retire at 63 if you keep going the way you are.

By the time you hit 68, you will have a full Irish state pension plus the €5k DB pension. Your wife will have a full UK pension and a substantial Irish pension in addition to her workplace pension which is 50% of her current salary. What sort of gross annual income is that, €80k maybe? No idea what your expenses are, but for many people that is a generous retirement figure and it excludes your wife's lump sum and your private pensions.

What you need to do is concentrate on are the expenses that are required to sustain you between 63 and 68. You currently have nearly €400k in your pension. You will have another 10 years contributing to it, so unless you have very high expenses, you should have a pension pot of €1m+ by 63.

It looks like you are already contributing the maximum to your pension to claim income tax relief. I am not familiar with the public sector, but is it possible for your wife to contribute to a pension so she too can gain income tax relief? Given you are only a few years away from being able to access your pension, it makes most sense for both of you to maximise AVC's to gain the 40% income tax rate relief.

The next thing is you should reduce your debts, start with the higher interest rate loan (presumably car) then concentrate on the mortgage (may not be possible if a fixed rate). Build up your cash buffer and maybe consider investing any excess savings.

 

[ClubMan]

To be fair, it’s very difficult to project forward your likely spending 10 years from now when your expenditure pattern is likely to be very different, with the kids hopefully off the payroll.

Fair comment, but my main point is that people are often asking "when can we retire" when, very often, neither they nor other forum users are really clear on what sort of funds they need to live their preferred lifestyle now, never mind in the future.

 

[gaahead]

Thanks Folks,

As pointed out expenses now versus 10 years times will be very different as hopefully kids will have flown the coop.

Saying that big expenditure currently are mortgage, private schools, and car loan. take them out household expenditure is just over 4-5k a month.

The main priority is to ensure we retire with no debts. May need to use some of our lump sums to clear mortgage but hopefully we will have a good bit left over to fund the few years till state pensions and db pensions kick in.

Then hopefully 4K a month will mean a comfortable lifestyle in retirement.

 

[conor_mc]

To be fair, it’s very difficult to project forward your likely spending 10 years from now when your expenditure pattern is likely to be very different, with the kids hopefully off the payroll.

Is it that difficult? I’ve taken our current annual budget and just started cutting out what I think will disappear once kids are off the payroll, and adding in what I think we’ll want to spend on ourselves (e.g. travel, holiday home, helping out the kids, etc, etc). Once you get into discretionary spending territory (which OP will no doubt be in, so well done to them) then you have a better picture of your needs, and the levers to adjust your saving profile now or your spending profile then, if necessary.

Similarly, it’s very difficult to predict what returns you might make on your pension funds.

Agree and disagree - if the pension pots had to cover a 30-year retirement, I would say it’s likely swings and roundabouts once you’re above a certain level of wealth. Poor returns in the next few accumulation years will probably be offset by better returns after that. Sequence of Returns Risk once you start spending the pension pot is the main problem but in a 30-year retirement with a very comfortable spending profile this can be managed. The challenge comes from the relatively short and relatively imminent spending period, 10/11 more years of saving plus 4-5 years of spending while OP bridges to defined benefit and state pensions. I still think it’s worth modelling out, but I would use some very conservative expectations of returns over the coming years. I’d even agree with you that holding a certain amount of cash/deposits/state savings bonds might even be appropriate, something we rarely agree on!