You have gotten some great advice here which should help you grow your pension pot significantly but I worry about you and your wife and your lifestyle. How aligned are you going forward on spending/saving/financial planning? What does your wife see as her role in all of this? You are going out to work every day, more than likely putting in a significant effort to earn 200K, and you probably leave all the lifestyle spending choices to your spouse. You probably take 1-2 city or hotel breaks per month, a weeks skiing in winter, 2 week long-haul in summer, etc, etc. probably 4-5 star each time and spend a lot on dining out. It sounds like you have modest/average homes and cars so material possessions are not a driving force.
And that is all wonderful and great for the three of you but it is probably not sustainable with you goal of stepping down to a 4 day week and retiring with a good pension.
- what is the agreement/reaction to 25% reduction in your take home pay that you made last month?
- what changes to your lifestyle have you both agreed on to plan for retirement. If you propose reducing you holiday spend by 50% how will that go down?
- What changes did you notice to your spending during lockdown and what did you enjoy not doing or doing differently. This may give you some clues to changes you can make for the future.
- Usually if one spouse is busy working the stay at home spouse looks after budgeting and making the take home pay work best for the family lifestyle. Will you wife be on board with the planned changes or not.
- Where does she think the cash will come from if you stop work now?
I would say as a start take all you payslips and bank statements for 2022 and make a little spreadsheet. Work out what was spent each month for the year. Try to gather bills, and pop them in each month, heat, electricity, car insurance, house insurance, phone, broadband, subscriptions, donations. Maybe try to list holidays/flights if you can. Don’t stress if you cannot account for everything, it is just to show €8500 income each month, €7000 outgoings each month, or whatever it is. And then with your spouse and maybe child agree on what you would like it to look like in 12 months time.
€8500 income each month, €2K to AVC, €3K to household spend, €1.5K to holidays. €2K for more pension planning. If your wife limited her spending to €700 per week, (that includes your spending also), can she do it?
Best of luck!
And that is all wonderful and great for the three of you but it is probably not sustainable with you goal of stepping down to a 4 day week and retiring with a good pension.
- what is the agreement/reaction to 25% reduction in your take home pay that you made last month?
- what changes to your lifestyle have you both agreed on to plan for retirement. If you propose reducing you holiday spend by 50% how will that go down?
- What changes did you notice to your spending during lockdown and what did you enjoy not doing or doing differently. This may give you some clues to changes you can make for the future.
- Usually if one spouse is busy working the stay at home spouse looks after budgeting and making the take home pay work best for the family lifestyle. Will you wife be on board with the planned changes or not.
- Where does she think the cash will come from if you stop work now?
I would say as a start take all you payslips and bank statements for 2022 and make a little spreadsheet. Work out what was spent each month for the year. Try to gather bills, and pop them in each month, heat, electricity, car insurance, house insurance, phone, broadband, subscriptions, donations. Maybe try to list holidays/flights if you can. Don’t stress if you cannot account for everything, it is just to show €8500 income each month, €7000 outgoings each month, or whatever it is. And then with your spouse and maybe child agree on what you would like it to look like in 12 months time.
€8500 income each month, €2K to AVC, €3K to household spend, €1.5K to holidays. €2K for more pension planning. If your wife limited her spending to €700 per week, (that includes your spending also), can she do it?
Best of luck!