First off, thank you so much to AAM and all the regular contributors here who share their expertise so generously. I am genuinely very grateful.
Personal details
Age: 53
Spouse’s/Partner's age: 54
Number and age of children: No children
Income and expenditure
Annual gross income from employment or profession: €94k
Annual gross income of spouse: €55k (working 3 days/week)
Monthly take-home pay: ~€3800 for me
Type of employment: Private sector PAYE
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving. At present, I estimate that I am saving about 15k-20k in cash each year. I am also contributing ~37k into my pension, my pension fund growth is ~ 22k and my ETFs are returning ~12k (after exit tax).
Summary of Assets and Liabilities
Family home is worth €350k-€400k with no mortgage.
I have €225k in the bank in demand accounts.
Fixed Term Deposits: 135k at fixed terms of 1-2 years
State Pension: I would need to make PRSI contributions up to age 69 to get a full state pension so I will probably end up a few years short on that.
UK Pension: I bought back National Insurance contributions for my UK pension, so I now have 26 years of contributions. I intend to back more years in time so I should have a full UK state pension payable from age 67.
Public Service Pension: I have a superannuation pension from the Public Services Pension Scheme of ~4.5k/year. I think this is payable from age 65.
Defined Contribution Pensions: I have an RAC worth €243k but I am not contributing to this anymore.
I also have a PRSA with my current employer. Value at last statement was €249k and I am contributing 30% from me and 10% from my employer per year = ~37k/year total.
ETFs: I invested in ETFs a while back which are currently worth €278k. I have already paid a deemed disposal on these in 2022. If I was to cash them in today, I would owe another ~€10k in exit tax; so the net value of these is ~€268k
No other savings, investments or property.
Family home mortgage information
No mortgage on our home
Other borrowings – car loans/personal loans etc
We don’t use credit cards and we do not have any other borrowings.
Buy to let properties
None
Other savings and investments:
As listed above
Other information which might be relevant
Life insurance: None
Our house takes a bit of maintenance and is quite rural. We may decide to downsize / move to a larger town as we get older.
What specific question do you have or what issues are of concern to you?
First off, I realise that we are in a good place and are very lucky not to have any financial worries. My job is well paid and while it can be a bit stressful, I have become very good at managing that. But I just do not enjoy my job anymore and I am thinking of making a change.
I think I could retire, but to be honest, the prospect is daunting. I am not sure I would enjoy going from fulltime work to nothing!
I could change to a job which is less well paid but more rewarding but I have been struggling to find something suitable.
Working part time in my current job would be good, but my role makes that difficult.
So here are my specific questions:
Personal details
Age: 53
Spouse’s/Partner's age: 54
Number and age of children: No children
Income and expenditure
Annual gross income from employment or profession: €94k
Annual gross income of spouse: €55k (working 3 days/week)
Monthly take-home pay: ~€3800 for me
Type of employment: Private sector PAYE
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving. At present, I estimate that I am saving about 15k-20k in cash each year. I am also contributing ~37k into my pension, my pension fund growth is ~ 22k and my ETFs are returning ~12k (after exit tax).
Summary of Assets and Liabilities
Family home is worth €350k-€400k with no mortgage.
I have €225k in the bank in demand accounts.
Fixed Term Deposits: 135k at fixed terms of 1-2 years
State Pension: I would need to make PRSI contributions up to age 69 to get a full state pension so I will probably end up a few years short on that.
UK Pension: I bought back National Insurance contributions for my UK pension, so I now have 26 years of contributions. I intend to back more years in time so I should have a full UK state pension payable from age 67.
Public Service Pension: I have a superannuation pension from the Public Services Pension Scheme of ~4.5k/year. I think this is payable from age 65.
Defined Contribution Pensions: I have an RAC worth €243k but I am not contributing to this anymore.
I also have a PRSA with my current employer. Value at last statement was €249k and I am contributing 30% from me and 10% from my employer per year = ~37k/year total.
ETFs: I invested in ETFs a while back which are currently worth €278k. I have already paid a deemed disposal on these in 2022. If I was to cash them in today, I would owe another ~€10k in exit tax; so the net value of these is ~€268k
No other savings, investments or property.
Family home mortgage information
No mortgage on our home
Other borrowings – car loans/personal loans etc
We don’t use credit cards and we do not have any other borrowings.
Buy to let properties
None
Other savings and investments:
As listed above
Other information which might be relevant
Life insurance: None
Our house takes a bit of maintenance and is quite rural. We may decide to downsize / move to a larger town as we get older.
What specific question do you have or what issues are of concern to you?
First off, I realise that we are in a good place and are very lucky not to have any financial worries. My job is well paid and while it can be a bit stressful, I have become very good at managing that. But I just do not enjoy my job anymore and I am thinking of making a change.
I think I could retire, but to be honest, the prospect is daunting. I am not sure I would enjoy going from fulltime work to nothing!
I could change to a job which is less well paid but more rewarding but I have been struggling to find something suitable.
Working part time in my current job would be good, but my role makes that difficult.
So here are my specific questions:
- Do I have enough to retire in the next year or two?
- Is retiring in your mid 50s a mad idea and will I go bananas after the initial excitement wears off? I realise this is subjective, but I would appreciate any insight from anyone in a similar situation.
- I think I have too much savings in cash but I suspect that I am already well provisioned for retirement income, so I probably need to think about spending this rather than investing it for the long term. For that reason, I was thinking about putting a good chunk of it into prize bonds which give a small return but can be redeemed whenever I like (after the initial 90 days).
- When I do retire, what is the best way to deplete my savings? I am thinking of using my cash first (lowest returns), then my ETF’s and finally my pensions (highest returns after tax and simpler than ETFs). Does that make sense?
- If we do decide to move house later in life, I would prefer to buy before we sell as closing two house sales on the same day is just too stressful. Is this a sensible plan? (If we do buy another house in the future, I am thinking we could fund this from the ETFs and tax-free lump sum from the pensions.)
- If I do retire now, what is the minimum amount that I would need to earn under a PAYE job to keep my PRSI contributions going for my state pension? I think there is an option to retire one of my pensions early and to set up an ARF which will satisfy the PRSI requirements for the state pension, but I need to look into this further.
- Is there anything else that you might suggest? Anything I have missed in my thinking or just any advice others in a similar position may have.