# Makeover advice following redundancy



## Wexfordman (21 Sep 2017)

Sorry, edited and deleted as I hadn't put in full info, please ignore and I will update later today.


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## Wexfordman (21 Sep 2017)

*
Profile*
Age: 46
Spouse’s/Partner's age: 46

Annual gross income from employment or profession: just commencing self employment following redundancy. Yr one aiming for 40k.
Annual gross income of spouse: 10k

*Monthly take-home pay *
Spouse  800pm
Self (via STEA):- 1200pm for next 6 months
Hoped for additional income 3k

Type of employment: sole trader (but will move to ltd company next yr probably)
Spouse employment:- Part time PAYE

*Home/Mortage*
Rough estimate of value of home:- 320k 
Amount outstanding on your mortgage: 28k
*What interest rate are you paying? 0.9%

*
No other loans.

Do you pay off your full credit card balance each month?  Yes


Savings and investments: 110k currently sitting in a demand deposit account 

*Pension*
Spouse:- None (apart from contributary pension entitlements she will gain)
Self:- Approx 260k fund in DC scheme from previous employer (made redundant last may)
         Also DB scheme from UK, currently told it is valued at 3k stg per year, with gauranteed growth of 5%. I beleive the DB scheme was bought out/closed down.


No other property or investments.

Ages of children: 18 and 13. Eldest is doing leaving cert and will be starting college next year

Life insurance: Life insured for 240k.


Additional Info/aspirations 

Was paye employed for last 20 yrs until redundancy last may. Took some time off, and am now starting back into work, currently day rate contracting, so will build up over time. I have been approved for short term enterprise allowance which will give me a bit of a leg up to get started. Aim to see how it goes for 6-9 months and perhaps then look at other alternatives if its not looking like getting regular income.

Main priorities are

1) Sort out that lump sum and do something with it.
2) Keep a rainy day fund/float
3) Set aside for kids college.
4) Begin to plan for new pension scheme.
5) Review income tax status.


So, I know I am going to have to begin funding 1 childs university fees within the next 12 months. I also think that my tax situation needs some review. Previous to my redundancy, I was on approx 90k, so high tax bracket, and would have been excluded from even looking at college grants etc, so I am thinking this is no longer the case ?

Redundancy lump sum was 133k after tax (I did not waive my right to pension lump sum, so that cost 14k in tax I beleive).
Earnings up to redundancy would have been approx 30k. I have earned an additional 2,400 from social welfare. I expect to earn another 15k through my new self employment for the remainder of the year. I can I think defer this till early next year if it makes sense ?

I am thinking I may be due some tax back, and also I need to relook at the tax setup between myself and my wife, albeit she does not earn enough to pay any significant tax.

Again, I may look at moving to a limited company later next year, so might need to think about the requirements/implications here.


Hope the info above is ok, really appreciate some advice.

Thanks,
Wexfordman


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## Wexfordman (28 Sep 2017)

Hi,

Not sure if anyone had seen my update above, would really appreciate some feedback and advice. Have a meeting with bank tomorrow, but I know they are just going to recommend their own investment/savings products.

Thanks,


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## mtk (29 Sep 2017)

delted


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## Wexfordman (20 Oct 2017)

Not sure if I worded my post poorly or didnt make things clear hence the lack of replies ?

Met with investment advisor of my bank the other week, and tbh, was not impressed, a poor sales talk pushing their own products wiith very high fees. Going to credit union on saturday, and will transfer 100k of cash to there with maximum interest they have to offer, probably the best approach for me at the moment.


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## Wexfordman (2 Nov 2017)

Can anyone please offer me some advice on this, 
1) should i pay off my mortgage
2) Where best to place my lump sum, considering I am risk adverse, and I need to consider my eldest going to college next year.
3) Are there any steps I hsould be taking with respect to taxation


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## 2blacklines (2 Nov 2017)

Considering your spouse's low income, I'd be tempted to look at a decent yield investment property (resi or commercial). In this option, I wouldn't pay off mortgage.

Another consideration may be to consider investing the money in your business or using it as collateral against a business loan. In this option, I would pay off mortgage.


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## Wexfordman (2 Nov 2017)

2blacklines said:


> Considering your spouse's low income, I'd be tempted to look at a decent yield investment property (resi or commercial). In this option, I wouldn't pay off mortgage.
> 
> Another consideration may be to consider investing the money in your business or using it as collateral against a business loan. In this option, I would pay off mortgage.



Thanks Blacklines, really appreciate the advice.

The lump sum at the moment is about 110k. I think an amount of that will be needed to live on for the next few months until I begin to get a regular stable income. I also think I need to keep an amount of it for my eldest starting college next year. I suspect she wont be eligable for susi grants, as my income up till redundancy in may was too high, and I think my redundancy lump sum or part of it would be included in my 2017 income figures ?

So, assuming I keep 20k for rainy day and day to day expenses for the moment, and another 20k for college funds for the next 2 years, then that leaves me with just 70k, which I would be stretched to get an investment property (and unlikely to get additional mortgage as both low incomes at the moment).

Investing in the business, I am really just testing the waters at the moment, and its a failry straight forward day rate contracting role, so not a lot to invest in at the moment


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## Sarenco (2 Nov 2017)

If I was in your shoes, I would pay off the balance of the mortgage and keep the remainder of your savings on deposit.

You obviously have significant near term expenses and an uncertain income so retaining ample liquidity is important.

To balance that, you could adopt a fairly high risk approach to your retirement savings (i.e. maintain a high allocation to equities/property in your DC pension fund).

I think you should probably take professional advice on your individual tax position.


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