What to do with excess cash?

Y

YellowBrick

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My financial position has changed quite significantly in the last while and I’d really value some advice on the options available to us. We feel in a very lucky position and want to make sure we make the right moves ahead but also don't want to be working into our 60s.

Personal details
Age: 53
Spouse’s/Partner's age: 56
Number and age of children: None

Income and expenditure
Annual gross income from employment or profession: None right now. Was earning 130k in private sector employment until quite recently.
Annual gross income of spouse: €20k, self-employed

Summary of Assets and Liabilities
My home worth €450k rented at €2.6k a month, no mortgage.

Partner’s home worth €450k, no mortgage. We’re currently living there. With a €15k investment we could probably rent it for €3.2k a month.

Cash of €650k (savings and recent inheritance)
My executive pension fund: €500k
Partner’s PRSA fund €25k

No debt. No car loans. Credit card paid off each month. 5 year old car in decent condition.

My questions are:
  • Would it make sense to use say 500k of the cash to buy a 3rd property as our primary residence and rent out Partner’s property? (I’m not that keen on location of Partner’s home – first world problems, I know).
  • If not, what do we do with the cash? We’re not interested in a holiday home.
  • I can go back to work and I’m thinking maybe full-time for say 3 years earning €120k+, or possibly part-time for the next 5 years making 80/90k. Or could I just retire now?! If going back to work, the plan would be to max out pension contributions/continue to save. We don't live large.
  • Is there anything obvious that I’m missing, not considering?
 
YellowBrick said:
Partner’s home worth €450k, no mortgage.
Click to expand...

The best bit of financial engineering and insurance you can do is to get married.

If one of you dies while you are partners, you are a stranger as regards CAT, pensions and everything else.

The rules don't require a church marriage with hundreds of guests. Just slip down quietly to the Registry Office without telling anyone.

Brendan
 
I note you don't have kids. Do you want to leave money behind to anyone when you're gone?
 
YellowBrick said:
Would it make sense to use say 500k of the cash to buy a 3rd property as our primary residence and rent out Partner’s property? (I’m not that keen on location of Partner’s home – first world problems, I know).
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Not a bad idea, assuming you don’t mind being a landlord.

With a paid for home and around €1.5m in investable assets, I would have thought that you could comfortably retire now, assuming your expenses aren’t too wild.
 
Basically what do you want to do with your time? Do you want to work full time? Do you want to work part time? Do you you want to retire? What would you like to do with your time? Before thinking of what to do with the money, I would probably try to think about how I would want to live my life. I personally know I could not retire at 53 without some kind of a plan.
 
Brendan Burgess said:
The best bit of financial engineering and insurance you can do is to get married.

If one of you dies while you are partners, you are a stranger as regards CAT, pensions and everything else.

The rules don't require a church marriage with hundreds of guests. Just slip down quietly to the Registry Office without telling anyone.

Brendan
Click to expand...
Who said there's no such thing as Romance any more , Brendan ? ;)
 
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Premos said:
Basically what do you want to do with your time? Do you want to work full time? Do you want to work part time? Do you you want to retire? What would you like to do with your time? Before thinking of what to do with the money, I would probably try to think about how I would want to live my life. I personally know I could not retire at 53 without some kind of a plan.
Click to expand...
You're spot on. I think that's what I'm really grappling with!
 
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