Recently turned 50 and wondering can I hang my boots up and retire?

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Dub333

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Recently turned 50 and wondering can I hang my boots up and retire? Any words of wisdom would be appreciated!

Single man, living in Dublin, will not be here long term as plan to head west.
Finances
Cash 140k
Pension 1 - approx 850k in previous employer plan, low cost fees and mix of investments
Pension 2 - approx 150k in private pension plan - equity investments
Cash - 140k
DeGiro - approx 130k in mix of stocks and investment trusts
Loan to Private Co of 50K that I receive 6% on...matures Feb 2024
Investment in same Private Company as above of approx 80K (my shareholding approx 1%)
Loan to brother of 100k - unlikely to receive this anytime soon unfortunately as they have 2 kids near college time

Unfortunately whilst I would count myself as financially savvy I never bought a property in Dublin...pay rent of 1900 monthly....big mistake in hindsight and not going to pull the trigger now. Intention will be to move to the west of Ireland where I'm originally from in a couple of years time. I'll take over the parnets home (both alive thankfully) and will share inheritance with my brother. I've no dependents and only need to look after myself. No loans or credit card debt.

I worked in a bank for over 20 years in a well paid but stressful job. Got offered redundancy and jumped at it. Then joined a small private US Company doing something completely different (Contractor). They're going through tough times now and my contract is now without a salary but I get a % for new business brought in. However sales cycle is long - can take years to get a prospect to finally sign up. Income from this could be anything from 0 to 150k.....and payments (if any) would be irregular.

Essentially had a great job but glad I left. New Company means I'm only person in Europe and I can work from anywhere, spent a month in Spain earlier this year with the folks. I spend a lot of time in the West and don't need to travel etc for work. I only do a couple of hours now a week with client calls. Allows me great flexibility to spend time with my folks (82 and 79) and they hugely appreciate it - as lots of time spent in hospitals etc in the last couple of years. In a RPZ with my apartment in Dublin in great location close to City Centre. Want to keep apartment for another couple of years as come up to Dublin to meet friends etc.

Am I entitled to anything from large tax contributions over the years? As not paying regular PRSI now will this affect my government pension in my 60s? Do I need to find a proper 9-5 job or can I hang my boots up?

Thank You
 
Dub333 said:
Am I entitled to anything from large tax contributions over the years?
Click to expand...
I presume you mean PRSI here as tax goes to fund the state on an ongoing basis? You may be entitled to an old age contributory pension at 66 depending on your PRSI contribution history and what further contributions you make or credits you qualify for.

State Pension (Contributory)

The State Pension (Contributory), previously called the Old Age (Contributory) Pension, is payable to people aged 66 and over who have worked and paid enough social insurance contributions.
www.citizensinformation.ie www.citizensinformation.ie

Voluntary social insurance contributions

Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.
www.citizensinformation.ie www.citizensinformation.ie
 
50andOut said:
What are your annual expenses now and anticipated post moving to the west?

This is key
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Thank you 50andOut….current approx 60k pa and envisage approx 36k pa in a couple of years…

I appreciate your time, expertise and guidance.
 
Get a copy of your PRSI contributions statement - available on myAccount. That will give you some indication of what you’ll get from State at 66+, and you still have a chance to add to that between now and then if required.

Do you know when you can access either of your pension funds? Especially the larger one? If you could access that now via an ARF before you hit age 60/61, you could earn extra S class stamps, and reduce the level of imputed distributions when you reach 61 onwards.
 
ClubMan said:
I presume you mean PRSI here as tax goes to fund the state on an ongoing basis? You may be entitled to an old age contributory pension at 66 depending on your PRSI contribution history and what further contributions you make or credits you qualify for.

State Pension (Contributory)

The State Pension (Contributory), previously called the Old Age (Contributory) Pension, is payable to people aged 66 and over who have worked and paid enough social insurance contributions.
www.citizensinformation.ie www.citizensinformation.ie

Voluntary social insurance contributions

Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.
www.citizensinformation.ie www.citizensinformation.ie
Click to expand...
Thank you ClubMan - I’ve some reading to do. Appreciate you posting these,
Cheers
 
With no property interest and moving back home, you may qualify for dwelling relief. You'd need to square that with your brother though. Given he owes you €100k, you can discount that off his share. How much is the family home worth?

You can also mature the smaller pension and put 75% into an ARF and make withdrawals to ensure your PRSI contributions continue to be paid if there is a shortfall.

Without doing a full cashflow analysis, you look in a good position. The big question is where you live in retirement, potential inheritance/ paying your brother for his share.

Steven
www.bluewaterfp.ie
 
ginslia said:
Get a copy of your PRSI contributions statement - available on myAccount. That will give you some indication of what you’ll get from State at 66+, and you still have a chance to add to that between now and then if required.

Do you know when you can access either of your pension funds? Especially the larger one? If you could access that now via an ARF before you hit age 60/61, you could earn extra S class stamps, and reduce the level of imputed distributions when you reach 61 onwards.
Click to expand...
I’ve asked the question and await their response…thanks for your time ginslia, I’ll also checkout myaccount…cheers
 
So €1m in private pensions Plus a further €500k savings (across cash investments and a couple of loans). Based on the low expected future annual expenditure you can easily be considered financially independent.

As mentioned above, you need to clarify your state contributory pension entitlement and probably is best to start drawing down on your pension now to get the ongoing Prsi credits whilst the part time job you have whilst may not generate a base salary gives something to keep engaged with and could add additional funds later.

Another question will the inheritance work, is it just the house and If you intend to stay in the house you would need to buy out the brother?

The private investment and loan in the company seems messy and the loan to the brother should have some timeline set up.

I suggest an independent financial advisor would be able to help structure your pension and investments to cover your ongoing needs relatively easily.

50&O
 
Steven Barrett said:
You can also mature the smaller pension and put 75% into an ARF and make withdrawals to ensure your PRSI contributions continue to be paid if there is a shortfall.
Click to expand...
Isn’t the smaller pension an RAC that can’t be accessed ‘til 60?
 
50andOut said:
Another question will the inheritance work, is it just the house and If you intend to stay in the house you would need to buy out the brother?

The private investment and loan in the company seems messy and the loan to the brother should have some timeline set up.
Click to expand...
I think loans to family & friends cannot be counted on until they day they are repaid. In my experience a lot of them are not paid back in full and most of us are unlikely to take legal action to enforce payment. I'm not saying write the money off but rather be prepared that it may not work out.

If OP is to split inheritance with the same brother, could he count the €100k loan against the value of the house?
 
Sarenco said:
Isn’t the smaller pension an RAC that can’t be accessed ‘til 60?
Click to expand...
Good point, it probably is.

He could then transfer his pensions to multiple PRSAs (he'd have to get a certificate of comparison carried out first) and mature one of them instead of maturing them all at the same time.

Or he could just mature it in one go. As he is under 61, there is no obligation to take out anything, so he can take out the minimum required to meet the PRSI obligations.


Steven
http://www.bluwaterfp.ie (www.bluwaterfp.ie)
 
arbitron said:
If OP is to split inheritance with the same brother, could he count the €100k loan against the value of the house?
Click to expand...
This sounds reasonable but should be discussed years in advance and agreed in writing after both parties having taken legal advice.
 
Dub333 said:
Recently turned 50 and wondering can I hang my boots up and retire? Any words of wisdom would be appreciated!

Single man, living in Dublin, will not be here long term as plan to head west.
Finances
Cash 140k
Pension 1 - approx 850k in previous employer plan, low cost fees and mix of investments
Pension 2 - approx 150k in private pension plan - equity investments
Cash - 140k
DeGiro - approx 130k in mix of stocks and investment trusts
Loan to Private Co of 50K that I receive 6% on...matures Feb 2024
Investment in same Private Company as above of approx 80K (my shareholding approx 1%)
Loan to brother of 100k - unlikely to receive this anytime soon unfortunately as they have 2 kids near college time

Unfortunately whilst I would count myself as financially savvy I never bought a property in Dublin...pay rent of 1900 monthly....big mistake in hindsight and not going to pull the trigger now. Intention will be to move to the west of Ireland where I'm originally from in a couple of years time. I'll take over the parnets home (both alive thankfully) and will share inheritance with my brother. I've no dependents and only need to look after myself. No loans or credit card debt.

I worked in a bank for over 20 years in a well paid but stressful job. Got offered redundancy and jumped at it. Then joined a small private US Company doing something completely different (Contractor). They're going through tough times now and my contract is now without a salary but I get a % for new business brought in. However sales cycle is long - can take years to get a prospect to finally sign up. Income from this could be anything from 0 to 150k.....and payments (if any) would be irregular.

Essentially had a great job but glad I left. New Company means I'm only person in Europe and I can work from anywhere, spent a month in Spain earlier this year with the folks. I spend a lot of time in the West and don't need to travel etc for work. I only do a couple of hours now a week with client calls. Allows me great flexibility to spend time with my folks (82 and 79) and they hugely appreciate it - as lots of time spent in hospitals etc in the last couple of years. In a RPZ with my apartment in Dublin in great location close to City Centre. Want to keep apartment for another couple of years as come up to Dublin to meet friends etc.

Am I entitled to anything from large tax contributions over the years? As not paying regular PRSI now will this affect my government pension in my 60s? Do I need to find a proper 9-5 job or can I hang my boots up?

Thank You
Click to expand...
I thought you were ryan tubridy there for a minute
 
In terms of the loan, I think it might be prudent to exclude ever getting anything back on this, including a larger share of future inheritance. Chances are there will be competing needs for the relative v paying back the loan eg helping their kids with masters, phd, future deposits, whatever life may throw at them. The relative might be compartmentalising the inheritance and loan and won't make the connection. It is a life changing amount of money but if you can also comparmentalise it then it might avoid issues in the relationship. Maybe consider it a very generous gift to your relatives children that might one day be repaid in another way than money returned. Not very fair but I think this is a realistic outcome.
 
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