PatrickD2024
New Member
- Messages
- 3
Age: 55
Spouse’s/Partner's age: 54
Number and age of children: 4 children. 3 in their twenties, finished college and now working. One with two years left at college.
Income and expenditure
Annual gross income from employment or profession: €60k
Annual gross income of spouse: €63k
Monthly take-home pay: €2864
Type of employment:
Me - Private Sector
Spouse - Public Sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving a small amount
Summary of Assets and Liabilities
Family home worth €350k with a €92k mortgage
Cash of €10k
Defined Contribution pension fund: €100k
Company shares : €10k
Family home mortgage information
Lender: AIB
Interest rate: 5.4%
Type of interest rate: Tracker
If tracker, what is the margin ECB + 0.85%
Remaining term: 10 years
Monthly repayment: €983
Other borrowings – car loans/personal loans etc:
Car Loan. €320/month. 9 months remaining.
Do you pay off your full credit card balance each month? Yes.
Other savings and investments: None
Do you have a pension scheme?
Current DC scheme. 5% employer match plus 10.5% AVC. Currently worth €100k.
Previous DB scheme from UK employment. See details below.
Spouse - Public Sector Pension
Do you own any investment or other property?
No.
Other information which might be relevant
Life insurance: Yes. €150k
What specific question do you have or what issues are of concern to you?
I've always prioritised paying into my pension over paying extra off my mortgage. When interest rates were low, this was an easy decision. However, I've recently turned 55 and I'm eligible to draw down my UK DB pension. The option that I'm looking at is (amounts converted into Euro):
Income Levelling : €98,782 Lump Sum. Annual Pension of €14,829 until age 67, then drops to €5,488
With the increased mortgage payments, rent for child at college, increased cost of living etc., I'm living payday to payday. Therefore I'm considering the previously unthinkable and taking my DB pension before retirement. I'd use the lump sum to pay off my mortgage, freeing up some much needed cash. Then with the monthly pension payment, I'd be able to increase my DC pension contribution to the 35% limit. My DB pension benefits increase each year deferred by around €6k for the lump sum and €900 per year for the pension payment. However I'm paying €11,800 each year on my mortgage with about half of that going to interest payments.
My plan is to retire at 60 and I've calculated that I'd need €30k/year to be comfortable. This should be doable under this plan by combining DB and DC pensions. I don't smoke /drink or have any expensive habits. We've lived frugally for the past 30 years, so is it time maybe to take the financial pressure off a bit as we move towards older age?
It instinctively feels wrong to lift my pension before retirement, but the numbers seem to suggest otherwise.
Thanks in advance for any advice.
Spouse’s/Partner's age: 54
Number and age of children: 4 children. 3 in their twenties, finished college and now working. One with two years left at college.
Income and expenditure
Annual gross income from employment or profession: €60k
Annual gross income of spouse: €63k
Monthly take-home pay: €2864
Type of employment:
Me - Private Sector
Spouse - Public Sector
In general are you:
(a) spending more than you earn, or
(b) saving?
Saving a small amount
Summary of Assets and Liabilities
Family home worth €350k with a €92k mortgage
Cash of €10k
Defined Contribution pension fund: €100k
Company shares : €10k
Family home mortgage information
Lender: AIB
Interest rate: 5.4%
Type of interest rate: Tracker
If tracker, what is the margin ECB + 0.85%
Remaining term: 10 years
Monthly repayment: €983
Other borrowings – car loans/personal loans etc:
Car Loan. €320/month. 9 months remaining.
Do you pay off your full credit card balance each month? Yes.
Other savings and investments: None
Do you have a pension scheme?
Current DC scheme. 5% employer match plus 10.5% AVC. Currently worth €100k.
Previous DB scheme from UK employment. See details below.
Spouse - Public Sector Pension
Do you own any investment or other property?
No.
Other information which might be relevant
Life insurance: Yes. €150k
What specific question do you have or what issues are of concern to you?
I've always prioritised paying into my pension over paying extra off my mortgage. When interest rates were low, this was an easy decision. However, I've recently turned 55 and I'm eligible to draw down my UK DB pension. The option that I'm looking at is (amounts converted into Euro):
Income Levelling : €98,782 Lump Sum. Annual Pension of €14,829 until age 67, then drops to €5,488
With the increased mortgage payments, rent for child at college, increased cost of living etc., I'm living payday to payday. Therefore I'm considering the previously unthinkable and taking my DB pension before retirement. I'd use the lump sum to pay off my mortgage, freeing up some much needed cash. Then with the monthly pension payment, I'd be able to increase my DC pension contribution to the 35% limit. My DB pension benefits increase each year deferred by around €6k for the lump sum and €900 per year for the pension payment. However I'm paying €11,800 each year on my mortgage with about half of that going to interest payments.
My plan is to retire at 60 and I've calculated that I'd need €30k/year to be comfortable. This should be doable under this plan by combining DB and DC pensions. I don't smoke /drink or have any expensive habits. We've lived frugally for the past 30 years, so is it time maybe to take the financial pressure off a bit as we move towards older age?
It instinctively feels wrong to lift my pension before retirement, but the numbers seem to suggest otherwise.
Thanks in advance for any advice.