Working couple looking to retire at 60 or younger

[retireme]

Personal details


Age: 47

Spouse’s/Partner's age:46


Number and age of children: 2 kids, age 11 and 8



Income and expenditure

Annual gross income from employment or profession: €85,000 Civil Servant, recently started in the Public sector.

Annual gross income of spouse: Private sector €126,000


Monthly take-home pay Approx 9k


Type of employment: e.g. Civil Servant, self-employed: Me, Civil Servant, Spouse, Private Sector


In general are you:

(a) spending more than you earn, or

(b) saving?


Saving approx €3,500 a month, likely to increase this year as we just finished off paying our mortgage before Christmas.


Summary of Assets and Liabilities

Family home worth €450k, mortgage paid off.

Cash of €250,000 (recently sold a buy to let property we had, money in account soon)

Defined Contribution pension fund: Me, private pension of €250k, will also have pension from Public Sector job ( only started this job one year ago, was private sector before that)

Spouse has pension pot of €410k, Employer contribution of 15%, AVCs of 10%

Company shares : €20k

Approx 50k in bonds in kids names.


No other loans, have 2 reasonably new cars, won't be upgrading for a couple of years.

Both of our pensions are 100% in World Equities.



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


We want to retire early, 60 max.

The 250k we have from the house sale, should hit our bank account in the next 2 weeks. That is Net of CGT.


Will probably put that in Trade Republic for now (a separate account each) as we are thinking of possibly moving house if the right property comes up, so don't want it tied up long term.


Wondering how best to retire early. Should we just max out our pensions, or is that all of our eggs in one basket? Are there any other investments we could make with spare cash?

 

[DublinHead54]

If you are going to buy a new house and take out a mortgage this would alter your plans.

You need to first assess how much income you need in retirement e.g. 60k per annum. Then calculate what would generate 60k per annum, a simple assumption is a pot of 1.5m drawing down 4% a year would generate 60k per annum. I'd also factor in lump sums and gifts to kids etc, new cars, house upkeep etc.

Your current pension pots are 660k + 250k cash leaving a shortfall of 590k. The most efficient way to fund that is AVC, with the excess cash you could look at other investments e.g. property etc. It looks like your cash savings alone over the next 10 years will get you there.

I don't think you need to chase any high risk investment strategies. Best to go to a good financial advisor for retirement planning.

Note your pensions can be invested in multiple strategies, you don't need to put all 100% in world equities, but in your position you should 100% max AVCs before considering any investments outside of a pension wrapper.

 

[Whatami]

If you are going to buy a new house and take out a mortgage this would alter your plans.

You need to first assess how much income you need in retirement e.g. 60k per annum. Then calculate what would generate 60k per annum, a simple assumption is a pot of 1.5m drawing down 4% a year would generate 60k per annum. I'd also factor in lump sums and gifts to kids etc, new cars, house upkeep etc.

Your current pension pots are 660k + 250k cash leaving a shortfall of 590k. The most efficient way to fund that is AVC, with the excess cash you could look at other investments e.g. property etc. It looks like your cash savings alone over the next 10 years will get you there.

I don't think you need to chase any high risk investment strategies. Best to go to a good financial advisor for retirement planning.

Note your pensions can be invested in multiple strategies, you don't need to put all 100% in world equities, but in your position you should 100% max AVCs before considering any investments outside of a pension wrapper.

Good response.
You also need to consider how to invest your monthly savings, no point in having those sitting in a bank losing money due to inflation.
Best to go to a financial advisor when dealing with such large sums.