# Not Maximising My Fortunate Situation



## Scooter (13 Oct 2020)

Hello everyone,

I'm a new member but I've been a reader for years. I'd be interested in your advice on my financial situation

*Age:* 44
*Spouse’s/Partner's age: *N/A

*Annual gross income from employment or profession: *95,000
*Annual gross income of spouse:* N/A

*Monthly take-home pay:* 3,600

*Type of employment: e.g. Civil Servant, self-employed.* Private Sector, permanent contract

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

*Rough estimate of value of home* 240,000
*Amount outstanding on your mortgage:* 0

*Other borrowings – car loans/personal loans etc *None

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

*Savings and investments:* €115k in CU, €80k in Ulster Bank Loyalty Saver, €17.5 in Ulster Bank Home Saver, 1k in Prize Bonds

*Do you have a pension scheme? *Yes, using AVC's to make maximum 25% contributions

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

*Ages of children:* none

*Life insurance:* Death in Service benefit I think..

*What specific question do you have or what issues are of concern to you?*

I think it's pointless having €115k in the credit union, annual return wouldn't even cover inflation but I don't know how to improve the situation. 
I really want to move it somewhere that it has the opportunity to make a better return. I'm comfortable with locking it away for 5 years. The mortgage is paid off, I'm happy where I'm living and don't have the urge or need to move anytime soon. I would consider myself to have a medium to high risk attitude, 4 out 5 which I know isn't reflected in my current situation.

Do you have any advice for my situation please? Or maybe to make it more interesting if I handed control of my finances to you, what changes would you make, savings wise not spending


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## Sarenco (13 Oct 2020)

Congratulations on being in such an envious financial position.

In your shoes, I think I would do something along the following lines:

Ensure your pension is invested 100% in a global equity fund;
Invest around €75k in a global equity investment trust like F&C Investment Trust plc;
Keep around €25k on deposit; and
Invest the balance of your after-tax savings in 5-Year State Savings Certs.
Separately, I would take out an income protection policy if this is not a benefit offered by your employer.


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## Scooter (14 Oct 2020)

Thanks Sarenco. Pension is 70% invested in global equities, 30% lower risk equities.

I not familiar with F&C Investment Trust, I'll take a look at them


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## Blackrock1 (14 Oct 2020)

what are your goals? do you want to retire early? if not id spend some of the money, you cant take it with you!


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## Scooter (14 Oct 2020)

Blackrock1 said:


> what are your goals? do you want to retire early? if not id spend some of the money, you cant take it with you!


Haven't really given it much thought to be honest. My aim was always to pay off the mortgage early, now that's done I don't really have a goal. It would be nice to retire at 60 though...


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## Sarenco (14 Oct 2020)

Scooter said:


> Pension is 70% invested in global equities, 30% lower risk equities.


It's important to look at your allocation to risky/safe assets across all your accounts and not to look at your pension in isolation.


Scooter said:


> It would be nice to retire at 60 though...


That looks like a very reasonable target given your financial trajectory to date.


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## aristotle (14 Oct 2020)

How much is in your pension at the moment?
If you are looking to retire in 16 years you will need a decent pot by then.


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## David_Dublin (14 Oct 2020)

If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.


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## Gordon Gekko (15 Oct 2020)

€3,600 a month doesn’t sound right on a €95,000 salary.


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## newirishman (15 Oct 2020)

Gordon Gekko said:


> €3,600 a month doesn’t sound right on a €95,000 salary.


25% pension contributions. Looks about right then?


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## Steven Barrett (15 Oct 2020)

newirishman said:


> 25% pension contributions. Looks about right then?



Even still, there's about €400 a month missing. There could be other deductions or savings schemes through work...


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## NoRegretsCoyote (15 Oct 2020)

Scooter said:


> *Ages of children:* none


Is this likely to change?


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## Steven Barrett (15 Oct 2020)

Scooter said:


> *Savings and investments:* €115k in CU, €80k in Ulster Bank Loyalty Saver, €17.5 in Ulster Bank Home Saver, 1k in Prize Bonds
> {/QUOTE]
> 
> You have almost 5 years net income in cash. Far too much.
> ...


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## aristotle (15 Oct 2020)

David_Dublin said:


> If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.



Well we just dont know based on the info provided. We dont know his current pension pot size or if his employer contributes.

On a worst case scenario lets say he has just started contributing 25% and the employer doesnt contribute then his pension pot might get to 400k in 16 years but that doesnt account for reducing risk and moving out of equities nearer to retirement so the returns may reduce and therefore might not be 400k.

If he has a current pension pot of 200k then he is tracking towards 650k pot again assuming staying in equities (https://www.newireland.ie/pension-calculator/)


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## Scooter (16 Oct 2020)

Thanks everyone for your replies



Gordon Gekko said:


> €3,600 a month doesn’t sound right on a €95,000 salary.


You're right, I rounded the figures and didn't explain that there are some deductions at source e.g. health insurance



SBarrett said:


> You have almost 5 years net income in cash. Far too much.
> 
> Your mortgage is paid off, you should congratulate yourself on doing that by 44. Now it is time to start building wealth so you can have lots of choices in the future.
> 
> ...


Thank you, this is the sort of advice i was looking. Id be comfortable with €25k on deposit and I take your point about understanding what 5 years really means



aristotle said:


> Well we just dont know based on the info provided. We dont know his current pension pot size or if his employer contributes.
> 
> On a worst case scenario lets say he has just started contributing 25% and the employer doesnt contribute then his pension pot might get to 400k in 16 years but that doesnt account for reducing risk and moving out of equities nearer to retirement so the returns may reduce and therefore might not be 400k.
> 
> If he has a current pension pot of 200k then he is tracking towards 650k pot again assuming staying in equities (https://www.newireland.ie/pension-calculator/)


Ok so pension is approx €290k today and employer contributes also but my 25% contributions are only for the last 3 years, after the mortgage cleared. I was of the opinion that I can't do anything here since I'm already maxing out my contributions?



David_Dublin said:


> If he's been maxing out his AVCs and continues until 60, and is in equities, I'd say keeping the pension below a certain value might be the bigger challenge than it being substantial enough.


Can a pension be too big??? Why would someone want to keep it below a certain value?


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## David_Dublin (17 Oct 2020)

Here's some info on the max pot, 2 million: https://www.irishtimes.com/special-...ware-the-funding-threshold-1.4053895?mode=amp

I think I read on here that there are considerations around being quite conservative about getting anywhere near that 2 million. I dont know the detail though.


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## Mousehelp (18 Oct 2020)

aristotle said:


> Well we just dont know based on the info provided. We dont know his current pension pot size or if his employer contributes.
> 
> On a worst case scenario lets say he has just started contributing 25% and the employer doesnt contribute then his pension pot might get to 400k in 16 years but that doesnt account for reducing risk and moving out of equities nearer to retirement so the returns may reduce and therefore might not be 400k.
> 
> If he has a current pension pot of 200k then he is tracking towards 650k pot again assuming staying in equities (https://www.newireland.ie/pension-calculator/)



Who said Scooter is a he?


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## David_Dublin (18 Oct 2020)

Mousehelp said:


> Who said Scooter is a he?



Eyeroll. Really? Who cares? Does it really matter the poster didn't put "he/she" or "they"?


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## Gordon Gekko (18 Oct 2020)

I think you’re both a disgrace to be honest.

The poster could also be transgender.

Wake up.

We should all be really careful about using highly inflammatory terms such as “he”, “she”, or “they”.


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## David_Dublin (18 Oct 2020)

Gordon Gekko said:


> I think you’re both a disgrace to be honest.
> 
> The poster could also be transgender.
> 
> ...



You're right. And there are way more gender insensitivities than that in the posts. The shame, head hanging here....


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