# Looking for advice on what are the most appropriate next steps for me..



## Opus2018 (4 Dec 2018)

*Age:* 52
*Spouse’s/Partner's age*: n/a

*Annual gross income from employment or profession:* €76,000 (once I'm back in Ireland) + other income (see below)

*Annual gross income of spouse:* n/a

*Monthly take-home pay:* €4,100 approximately

*Type of employment:* e.g. Civil Servant, self-employed

Civil servant pemanent

*In general are you:
*
(a) spending more than you earn, or
(b) saving?

Saving:- Once I'm back home, I expect to save around 1,850 Euro a month.  Currently I'm saving around 50% of my salary at present - I have always had a history of being quite a good saver (not all the time, mind!).

*Rough estimate of value of home:* €750,000- €775,000 (this may be a touch conservative).
*Amount outstanding on your mortgage: *€0.00 (Phew! Mortgage repaid as of July 2018, very much ahead of schedule)
*
What interest rate are you paying? *
n/a was 3.7%
*
Do you pay off your full credit card balance each month? *yes
*If not, what is the balance on your credit card? *n/a
*
Savings and investments: *

Approximately €410,000 in liquid assets, of which roughly €75,000 in shares and the rest in cash.

*Do you have a pension scheme? *Yes through work DB scheme (I'm a pre-1995 entrant).

*Do you own any investment or other property? *No.

*Other borrowings – car loans/personal loans etc:* Nil.

Hi all,

I'm coming back home in 2019 after being away for a few years (was on career break). I was wondering what you think my next steps should be now?  I have over 23 years of contributions on a DB pension with my job - I plan to retire at 60 or so, so I'll be up to to over 30 years on the pension side (out of a max of 40).  I could buy back years, but that will be rather expensive.  I was just wondering if anyone had any guidance or suggestions, as I'm a little short of ideas at present given that I was working towards making myself debt free.  I am open to purchasing more shares (but will do the relevant research first naturally!).  One last thing, I do get the opportunity to do work abroad from time to time which works out at around 900-1,000 euro per day which could be used to help me buy back years...if I'm lucky, I'll have around 20-30 days of work in 2019 (it might be more, could be less).

If you have any questions or comments, do let me know.  I'm very much looking forward to hearing from you.

Best,

Opus2018.


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## Buddyboy (5 Dec 2018)

Hi Opus2018,
I really struggled to formulate an answer to this post. Obviously you have given us pertinent information, but very little else to go on. So remember that when I give you my thoughts.

You are 52 (same age as myself), you have a house worth 3/4 of a million, owned outright. You have no (life) partner or dependants, you have savings of 400,000, and no debts. You have a DB pension

You currently save half you salary, and your main question is whether you should buy back years to increase your pension or purchasing shares (i.e. more savings)?

The big question that jumps out to me is WHY?
At what point do you intend to stop accumulating money and start spending it? 
If you were hit by a bus tomorrow, what would flash before your eyes? 
Are you actually living, enjoying yourself, gaining experiences?

For all I know you are living the high life with the half salary you spend, and get to work abroad in exotic locations and use your free time to travel the world.
But you didn't say so, so I am assuming not. You did say you were on a career break, but since you quote a monthly take home pay, I assume you were working during that time.


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## DeeKie (5 Dec 2018)

It sounds like you could buy a small apartment to visit at weekends?


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## thos (5 Dec 2018)

DeeKie said:


> It sounds like you could buy a small apartment to visit at weekends?


Sounds like he could buy a large apartment to visit at weekends.


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## DeeKie (6 Dec 2018)

When do you plan to retire OP?


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## Opus2018 (6 Dec 2018)

Hi lads,

Thanks for the replies.  I intend to retire at 60 or so in response to DeeKie (and no, I don't feel the need to buy any type of apartment small or large to visit at weekends!  ).

In response to Buddyboy please see below:-



Buddyboy said:


> Hi Opus2018,
> I really struggled to formulate an answer to this post. Obviously you have given us pertinent information, but very little else to go on. So remember that when I give you my thoughts.
> 
> You are 52 (same age as myself), you have a house worth 3/4 of a million, owned outright. You have no (life) partner or dependants, you have savings of 400,000, and no debts. You have a DB pension
> ...



Firstly thanks for the response - I see what you mean in terms of giving you little enough to go on apart from the financial stuff.  Ok, you do make a fair number of points - the honest answer is I don't know when I stop accumulating money - it's just a good habit I've gotten into.  Mind you, I know I will need to spend some cash once I'm home (new car, upgrading the house etc.). Having said that I don't leave myself short and I think I have a reasonably good standard of living (not ostentatious I hope, but I think I'm very comfortable).  The other point is that I've been incredibly fortunate in that I've been a job I really liked for the last few years which involved a lot of foreign travel and in coming back to Ireland, I'll be taking a large pay cut (easily 60 percent of net pay), but I think it's the right thing for me to do - at least I'll be back in my own nest.  Prior to heading away, I was doing ridiculous hours (80 hour plus for a long time, but all self inflicted so mea culpa on that), but on my return it's the 9-5 routine only plus whatever international work I pick up (assuming I get any!).  So I'm looking forward to having more free time which will hopefully raise my welfare levels higher.  I still think though that I need to keep an eye on wealth and cash flow as it took me a long time to put all this together and I'm not disposed to losing it all by being silly, hence the question posed.

I know you can't plan everything and as you said I could be hit by a bus tomorrow! Anyway, I hope this clarifies things but if you have any more questions do please let me know and I'll see what I can do.

Best,

Opus2018.


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## Feemar5 (12 Dec 2018)

Congrats on your financial situation.    You can get tax relief on buying back years and according to tax experts its the way to go.    Who knows what will happen in the future but hopefully you will live a long and happy life - and afford to be cared for in your own home when the time comes.


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## Opus2018 (12 Dec 2018)

Hi Feemar5,

Many thanks for the response. It looks like buying back years is the way to go given my age and circumstances.  I'll post more details on this once I get the figures from HR once I'm back home.  It's true you can't plan for everything, but sometimes you have to play the percentages and hope for the best.

Anyway, grateful for any responses that anyone else might have out there.

Best, 

Opus2018.


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## gnf_ireland (12 Dec 2018)

Opus2018 said:


> So I'm looking forward to having more free time which will hopefully raise my welfare levels higher. I still think though that I need to keep an eye on wealth and cash flow as it took me a long time to put all this together and I'm not disposed to losing it all by being silly, hence the question posed.



I am with @Buddyboy on this one. I think you need to start thinking on what you plan to do in your retirement, and how much money you will need to live on.

At the moment, you are going to be on roughly 3/8th your salary when you finish for a pension. After tax that is probably not far off your current spending patterns (if you are saving 50% of your salary). So in essence, once you draw your pension, your standard of living will not drop based on current spending ! That is quite a position to be in

In addition, you have the option of some 'offline' income to drop up your income. That is a major advantage and allows you achieve a soft landing between full time work and retirement.

So what are your interests outside of work, and how do you plan to enjoy yourself when you retire.. 

I think you need to take a step back and think of the bigger picture and forget about 'wealth accumulation' for a bit. Think about what you need to have a decent standard of living in retirement, and once you achieve this you are effectively financially independent and can do whatever you want to and enjoy doing.. 



Opus2018 said:


> but on my return it's the 9-5 routine only plus whatever international work I pick up


BTW this is easier said than done. Its hard for most people to 'switch back' to this if they have spent years going full throttle !


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## Opus2018 (13 Dec 2018)

Hi gnfireland,

Thanks for the response. I hadn't though of that salary needed on retirement  Yes, I figure a monthly take home of around 2,400-2,500 should be doable but I'd need to add a couple more years to make sure.  The other thing to do possibly is to add in a few shares that pay out a reasonable dividend to top up as necessary. I'll come back with more detail next year on the pension calculations.  

Don't worry though, I have plans to do new stuff and to go back to stuff I used to do.  I take your point about switching back, so I'll to watch for that.  it should be easier though as they were in different spheres!

All other suggestions gratefully accepted!

Best,

Opus2018.


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## Opus2018 (19 Feb 2020)

Hi all,

Well, it's a little over 14 months since I last posted on this thread I just wanted to update you on progress since then.

I'm back home since January 2019 and back in work after a career break as I said.

I've updated the facts to be as follows:-

*Age:* 53
*Spouse’s/Partner's age*: n/a

*Annual gross income from employment or profession:* €77,000 (gross) + other income (2019 figure €62,000 net)

*Annual gross income of spouse:* n/a

*Monthly take-home pay:* €4,080 approximately

*Type of employment:* e.g. Civil Servant, self-employed

Civil servant permanent

*In general are you:*

(a) spending more than you earn, or
(b) saving?

Saving:- bu, I haven't been good since I came back with buying a new car and making significant home improvements in 2019, which I thought I'd do to be fair....

*Rough estimate of value of home:* €750,000- €775,000
*Amount outstanding on your mortgage: *€0.00 

*What interest rate are you paying?*
n/a 

*Do you pay off your full credit card balance each month? *yes
*If not, what is the balance on your credit card? *n/a

*Savings and investments:*

Approximately €412,000 in liquid assets, of which roughly €76,000 in shares and the rest in cash.

*Do you have a pension scheme? *Yes through work DB scheme (I'm a pre-1995 entrant).

*Do you own any investment or other property? *No.

*Other borrowings – car loans/personal loans etc:* Nil.

Ok, since I came back, I've bought a new car, and done quite a bit of work on upgrading the house (not yet finished mind, but it's been a good start.  As I'm standing still in terms of savings since Dec 2018, I figure I'm in a reasonably good place.   The question I want to ask is that I want to boost my pension and I have two options

1) Set up an AVC to maximise my tax free lump sum on retirement (1½ my final salary) and set up a fund to withdraw 4-5% per annum.  I've been quoted 774 per fortnight gross which is about 440 net after tax.  This is the max amount I can put away at my age (30%) I can also fire in a lump sum of approximately 19,000 (11,400) after tax to cover the last tax year.  I figure given 6 years I will have a sum of 160,000 before assuming any growth or reductions made by the pension company (It's New Ireland and the plan is called Iris).  I figure I can withdraw 5,480 at 4% p.a. to add to my pension.

2) Alternatively I can buy back years and for the fortnightly payment (not including the 11,400 amount) I can buy back 5 years which means I would buy back 5 years which would boost my pension by around 5,200.  I'd still be short by 11,,600 on the max lump sum though.


So what would posters suggest go with option 1 or 2 or perhaps a mix??  I think maxing out on the lump sum is a no brainer - it's the fine tuning I have a question over  If I do AVCs the fund goes to the estate if I die, whereas the pension dies with me... on the other hand increasing the work pension seems to insulate me against inflation at the moment and I buy certainty in terms of what I get.  overall pension at 60 would be around €36,500 with the work based pension or €36,800 with a better lump sum.


Hoping still to retire at 60! Hopefully might be able to the odd job abroad once or twice a year but nothing is guaranteed...

Best, 

Opus2018


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