# 80 years old and not planning to go anywhere soon!



## whattodonext (21 Jan 2021)

Age: 82
Spouse’s/Partner's age: 81

Annual gross income from employment or profession: Net €27,000 (Occ Pension & State Pension)
Annual gross income of spouse: Net €7,000 (State Pension)

Monthly take-home pay: €2,800 from our combined pensions

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

In general are you:
(b) saving?

Rough estimate of value of home: €350,000
Amount outstanding on your mortgage: €0
What interest rate are you paying? na

Other borrowings – car loans/personal loans etc: None

Do you pay off your full credit card balance each month? Don't have one
If not, what is the balance on your credit card? 

Savings and investments:
Approx €350,000 in savings
Additional €200,000 proceeds from sale of inherited house due this month

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Ages of children: 
50
40

Life insurance: None

Health insurance: None just medical cards

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

Apologies in advance if this is not the right place to raise this. This is a very different Money Makeover given we are now at the average life expectancy and our cash position.

We believe we have far more savings then we will ever be able to spend at our age. 

We are concerned about where to leave our savings due to bank guarantee limits. 

Investing in anything long term at our age may not make sense. 

We would like to gift to our children & grandchildren now - but want to make sure we do not leave ourselves short should the 'worst case' happen and we need 24/7 care in our home/nursing home. Having work hard all our lives and now having a very decent pension we find it hard to think how much that is.

Nursing home really would be a last resort. We would dearly like to help our children now and also not have to sell our own home while we are alive.

Welcome any advice on how much cash we should really preserve should the worst happen and we live another 5-10 years for example, where to keep it, & anything on gifting we should be aware of.

thank you for your time.


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## _OkGo_ (21 Jan 2021)

You are in the right place and it is refreshing to see a different type of Money makeover for a change!

You are in a healthy financial position but before offering my opinion, there are a few questions that would help you decide on what to do:

Does your current income cover all of your living expenses or do you supplement it from your savings?
What will happen to your pension if you predecease your spouse? Will your spouse only have €7k to live on or will they continue to get something from your occupational pension?
Do you and your spouse already have very clear and concise wills made?
Are there home improvements/adaptions that you may need to make to your home such as wetrooms, accessibility etc?
Do you foresee any large medical bills or surgeries that you may need to pay for?
Hopefully answering some of the above will help you to understand how much cash you need to keep available.

As for gifting, if you want to do it slow and steady, both you and your spouse can each gift €3k per person per year to anyone you want. As an example, if one of your children is married and you want to help with their mortgage, between you and your spouse you could gift your child €6k and their partner €6k so a total of €12k per year. This applies to anyone you want to gift money to so each child, grandchild, son/daughter in-law can all receive €6k per annum from you & your spouse.


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## NoRegretsCoyote (21 Jan 2021)

whattodonext said:


> We are concerned about where to leave our savings due to bank guarantee limits.



You  are guaranteed up to €100k per bank per person.

A joint account of €200k is fully guaranteed once that's the only account either of you have with the bank.

You could spread your €550k savings across three banks.

You could also try state savings which are fully guaranteed.

I don't think there is very much risk of bank failures leading to deposit losses in Irish banks any time soon.

But no harm to spread your money out if it's a concern.


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## Brendan Burgess (21 Jan 2021)

You have total assets of €900k

You can give each of your children €335k and each of your grandchildren €32,500 without there being any tax liability. 

So if you have 4 grandchildren, you will have €800k exempt.
So only €100k would be subject to CAT.

And as okgo pointed out, both of you can give €3k each to them each  year , so that is €36k a year , without affecting the thresholds.  So that should be the first priority.  

The state will provide you with nursing home care if you need it.

They won't provide care in the home other than a couple of hours a day from a visitor. 

There is no answer to your question as to how much you need. Homecare would be very expensive.  But you would probably get better medical care in a nursing home.  

If your children need money , then lend it to them.  Then they can give it back to you if you need it. 

Likewise, a good use of your money would be to lend it to your grandchildren to help them buy homes. 

Brendan


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## Brendan Burgess (21 Jan 2021)

When you decide how much you need to keep, then invest it directly in a diversified portfolio of shares. 

While the values will go up and down over the next 10 or 15 years, they are more likely to go up and your portfolio will probably be worth more when you die.

And the huge advantage of shares over deposits is that when you die, the liability for Capital Gains Tax disappears. 

So your eventual position could be something like: 

Family home: €350k
Loans to family members: €350k
investments in shares: €200k 

That is a well balanced portfolio.

Brendan


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## Saavy99 (21 Jan 2021)

Brendan Burgess said:


> Homecare would be very expensive.  But you would probably get better medical care in a nursing home.



How much more expensive would homecare be?


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## AlbacoreA (21 Jan 2021)

Saavy99 said:


> How much more expensive would homecare be?



I think he said expensive not more expensive. 

I looked into this and it was similar to a nursing home. So 1000~2000 a week But you don't have the facilities, entertainment, or company of a nursing home. Depends how much care you need. Some people need a minimum of help some people need it 24/7. So its how long is a piece of string. Also makes a difference if the house is converted with lifts, wet rooms, all the usual aids.  

I would say in Ireland we mostly have nursing homes, not retirement's homes. The difficulty is we don't really match people with similar abilities.


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## Clamball (21 Jan 2021)

I think you are in a great position financially.  I hope you live a long and healthy life and get to enjoy it as much as you want.

 I agree if you wish both of you could gift €3K per annum to each child, daughter/son in law, grand child etc.  So each of you Children could get €12K pa from you into their family, with 4 gifts.  That would be such a help to them at their age and position in life with perhaps a mortgage and kids etc.  Or the grandkids could be school going and you could help out with sports, music, art, travel etc.  

But look at your own home and life.  You know, is that kitchen 30 years old already?  Does that drawer still look half busted for the last 5 years.  Revamp and refresh.  My parents built on a new downstairs bathroom & bedroom and it was spacious, warm, convenient and served my Dad well into his 90’s.  He was able to live at home because of this facility and I think he got better individual care at home, he was not sick just very old.  So a new bathroom with grab rails, and a layout that suits your needs

if you enjoy the garden but not the gardening any more, put in raised beds, wider & flatter paths, somewhere to sit and point out the work to others. So use the money to make your life more enjoyable and easier.

Then if you wish give gifts to your family members each year.  Say you have 2 kids & 2 in-laws & 4 grand kids, you and your spouse could gift them in total €48K a year.  If you have €500K cash and don’t use your savings for living expenses then after 5 years you will still have €260K left which is still a large pot of money in your mid to late 80’s.  

The last thing I would worry about is a nursing home.  If you end up in a nursing home with that amount of cash you will pay a lot of it to the nursing home, you will get the same care if you had 0 in cash.


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## AlbacoreA (21 Jan 2021)

Couldn't agree more with the above.


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## whattodonext (21 Jan 2021)

Firstly - Thank you so much for your replies so far. Now to answer some of your questions.



_OkGo_ said:


> Does your current income cover all of your living expenses or do you supplement it from your savings?



Our current income covers all our living expenses. Our savings are roughly increasing by €2k pa



_OkGo_ said:


> What will happen to your pension if you predecease your spouse? Will your spouse only have €7k to live on or will they continue to get something from your occupational pension?



I'm a retired civil servant. To the best of my knowledge my wife would receive half of my pension for as long as she lives, along with her own pension and presumably a Widows pension. Potentially €19k pa.



_OkGo_ said:


> Do you and your spouse already have very clear and concise wills made?



Yes very straight forward split between our two children.



_OkGo_ said:


> Are there home improvements/adaptions that you may need to make to your home such as wetrooms, accessibility etc?



We have just finished a complete refurbishment of the house to ensure we can continue to live there. We've now got a downstairs bedroom, proper insulation, windows, heating/security system, along with a very accessible bathroom. It has been a breath of fresh air for us - especially with lockdown.



_OkGo_ said:


> Do you foresee any large medical bills or surgeries that you may need to pay for?



Nothing impending and fingers crossed it stays that way.


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## whattodonext (21 Jan 2021)

Brendan Burgess said:


> You can give each of your children €335k and each of your grandchildren €32,500 without there being any tax liability.



Can I also give to my son-in-law/daughter-in-law above the €3k gift pa without there being a tax liability?

I believe some of my grandchildren have already inherited something from their other grandparents. If this is the case could they be liable for tax if I gave them €32,500?



Brendan Burgess said:


> If your children need money , then lend it to them.  Then they can give it back to you if you need it.



I think we would find it very hard to lend it to them as if I gave them such a substantial sum they would be using it to pay off mortgage etc so would not be available to pay us back. At the same time we don't feel we need to wait until we pass away to give them some of their inheritance. We are not being pressurised into this. Having worked all my life the challenge we have is trying to get a handle on how much we should keep.


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## SPC100 (21 Jan 2021)

Kudos for being young enough to post on a message board, and quote replies! You are the oldest person I know of to do that. Inspirational. Wishing you health and hapiness to you and yours.


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## Clamball (21 Jan 2021)

That sounds wonderful Whattodonext.  So glad you have made your living space more comfortable.  And it sounds like you are both fit and well so once you are both vaccinated go and enjoy your money.  It is probably a weird feeling spending a bit more when you probably saved for the last 60 years.  

But this is what you have saved for.  To enjoy life, I could think of a myriad things you could do with your  money in the next 10 years and it probably would not make a big dent in your savings.   Even if you both decided to spend an extra €1K each a month for the next 10 years you would still have another €310K left when you both get to 91/92.  So why not give yourself and your spouse a spending allowance, that each of you can use as you like, and see what happens.  Whether you give it as gifts to your kids and grandkids or go on holiday or pop to New York for some shopping or  head away for a golf weekend, or spend a night at the dogs, go for it.


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## Steven Barrett (22 Jan 2021)

whattodonext said:


> Can I also give to my son-in-law/daughter-in-law above the €3k gift pa without there being a tax liability?
> 
> I think we would find it very hard to lend it to them as if I gave them such a substantial sum they would be using it to pay off mortgage etc so would not be available to pay us back. *At the same time we don't feel we need to wait until we pass away to give them some of their inheritance.* We are not being pressurised into this. Having worked all my life the challenge we have is trying to get a handle on how much we should keep.



You'll get no enjoyment from your children getting the money then! 

You have the major expenditures on the house paid for your your pensions covers your cost of living. Start considering passing money to your children so they can pay off their mortgages. There is nothing in the rule book about giving your kids an inheritance while you are still alive. You and your wife will get the satisfaction of knowing that you have really helped out your kids financially and allowed them to build their own future and that of their kids without having debts to pay off. 

How much is the big question? How much do you feel comfortable with? A starting point may be the €200,000 that you are due to receive. You can always pass more money to your kids and grandkids over the years. As has been said already, you and you wife can gift all of them €3,000 a year, so that's €6,000 a year to each person. 

The problem you are facing is the unknowns of later life. How long am we are going to live for and what will our quality of life be? The cost of care is very expensive and your assets are such that you will have to pay for it yourself. My wife used to work in an old persons hospital and she said that the longest they would live in there is 5 years. So if you want to plan for the cost of a home or home help, 5 years cost would be the most. 

I would disagree with Brendan on investing. Unless you have an interest in investing, you do not need to take investment risk to grow your money, you have enough to live for the rest of your life. 

Is there anything that you and your wife would like to do? Anywhere you would love to go to? Or how about treating the whole family to a holiday in the sun once we have all gotten vaccinated and it is safe for us all to travel in numbers again?

Steven
www.bluewaterfp.ie


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## Grizzly (22 Jan 2021)

Brendan Burgess said:


> When you decide how much you need to keep, then invest it directly in a diversified portfolio of shares.
> 
> While the values will go up and down over the next 10 or 15 years, they are more likely to go up and your portfolio will probably be worth more when you die.


Should an 82 and 81 year old be investing in the stock market?  I think at this stage in a person's life people are trying to offload money than accumulate it.  
As I get older I find that I am trying to make my affairs more simple. I get great joy out of gifting my children and grand children gifts of cash every so often. I don't do this at any specific time as I don't want them taking this for granted. My own father did this and much to my regret and shame we began to take his gifts for granted.
Perhaps, rather than giving cash you could pay for a family holiday. Even a few generations could have a weekend away together in a nice hotel in Ireland or abroad.
I have given a loan to one of my children which he has used to reduce his mortgage. He is paying us back on a monthly basis. The benefit to him is that he is saving a good amount of interest on this amount. We had it sitting there earning nothing.

One question for the OP. You refurbished the downstairs of your current home rather than move to a bungalow or similar. We are debating this at the moment ourselves, can you give us some reasons to stay put or otherwise?


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## Allpartied (22 Jan 2021)

You sound like the kind of people who may already have done this, but might I suggest a charitable contribution. 
Lots of people leave money to good causes in their wills, so why not do it whilst you are still alive. That way, you get the pleasure of seeing your gift make a real difference to other people. 
There are always local charities looking for help.  A new minibus, or a new boiler for the communty centre, that sort of thing.  
Of all the people who won the lottery, the happiest couple I have read about are these guys.  









						Lottery winners have already given half their jackpot to good causes
					

Frances, 54, and Patrick Connolly, 56, who live in north-east England, won a £114.9million Euromillions jackpot in 2019 and have given away £60million to good causes and set up two charitable trusts since.




					www.dailymail.co.uk


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## _OkGo_ (22 Jan 2021)

Brendan Burgess said:


> Family home: €350k
> Loans to family members: €350k
> investments in shares: €200k
> 
> That is a well balanced portfolio.


I would have to respectfully disagree and say that is a poorly balanced portfolio. As @whattodonext has said, lending that amount of money would likely be used for large capital expenditure so they would not get it back anytime soon. It would get a whole lot worse if some get it and others don't and how that eventually plays out with wills if the people in receipt of the loans are not in the will. I would stick to gifting money that you are comfortable you do not need and keep the rest

As for investing, again I would say the OP's need for access to money far outweighs their need for 10yr growth. If they loaned €350k and invested €200k, then all of that money is locked away for at least 5 years. I think that would be a terrible use of their wealth.



whattodonext said:


> Firstly - Thank you so much for your replies so far. Now to answer some of your questions.
> Our current income covers all our living expenses. Our savings are roughly increasing by €2k pa
> I'm a retired civil servant. To the best of my knowledge my wife would receive half of my pension for as long as she lives, along with her own pension and presumably a Widows pension. Potentially €19k pa.
> Yes very straight forward split between our two children.
> ...


Lots of great answers here. You have looked after your immediate needs by proactively upgrading your home and you will enjoy the benefits of this with increased comfort in the years to come
It is great that your will is simple. The only thing to consider is that your children can each receive €335k tax free from the inheritance so a total of €670k. Your current wealth is approximately €900k so they would pay tax on anything above the €670k. Maybe that is a starting point (€230k) for how much you would like to spend and/or gift over the next 4/5years

I would agree with @SBarrett and @Allpartied, think about spending money on yourself first (things you have always wanted to do) and then maybe a family event such as a holiday that you can pay for. Or are there any charities close to your heart that you would like to donate to?

To be clear on the small gift exemption, you can give anyone this amount tax free. If your grandchildren have already received inheritance, this is not impacted if you use the annual small gift exemption. Just an example but if one of your grandchildren are mid twenties and saving for a deposit on a home. You could potentially give them €6k in December 21, €6k in January 22 and the same to their partner (if they have one). That could be €24k towards a valuable asset for them. There is a lot of benefit to using the small gift exemption for money that you are happy you do not need


*Recipient**From You**From Your Spouse**Total (per year)*Child A€3k€3k€6kChild A spouse€3k€3k€6kChild B€3k€3k€6kChild B spouse€3k€3k€6kGrandchild A€3k€3k€6kGrandchild A partner€3k€3k€6kGrandchild B€3k€3k€6kGrandchild B partner€3k€3k€6k


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## DK123 (22 Jan 2021)

I agree with Allpartied. Give [or will] at least 100,000 to a good charity for the "greater good"
and i think its tax free also.[Perhaps we all think too much of our own little miniscule world in my humble opinion]


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## whattodonext (24 Jan 2021)

SPC100 said:


> Kudos for being young enough to post on a message board, and quote replies! You are the oldest person I know of to do that.



I must admit to having some help with using the website but thank you it has been really interesting to read all of your replies.



Allpartied said:


> might I suggest a charitable contribution.



We had included donations to charities in our will - but we will now consider giving some while we are still alive.



Grizzly said:


> One question for the OP. You refurbished the downstairs of your current home rather than move to a bungalow or similar. We are debating this at the moment ourselves, can you give us some reasons to stay put or otherwise?



We had considered moving when I retired but we like where we live, the house has so many memories for us, and we had space to reconfigure downstairs to work for us. 



Brendan Burgess said:


> So only €100k would be subject to CAT.



I think this is what we are keen to avoid. I mentioned we are due to receive approx €200k (net) this month from the sale of a house we inherited. We really did not sit comfortably as landlords and there was some closure for us by selling even if it might not have been the wisest thing to do financially. We are obviously paying CGT on the sale, so would be keen to avoid CAT.


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## Brendan Burgess (24 Jan 2021)

_OkGo_ said:


> I would have to respectfully disagree and say that is a poorly balanced portfolio. As @whattodonext has said, lending that amount of money would likely be used for large capital expenditure so they would not get it back anytime soon. It would get a whole lot worse if some get it and others don't and how that eventually plays out with wills if the people in receipt of the loans are not in the will. I would stick to gifting money that you are comfortable you do not need and keep the rest
> 
> As for investing, again I would say the OP's need for access to money far outweighs their need for 10yr growth. If they loaned €350k and invested €200k, then all of that money is locked away for at least 5 years. I think that would be a terrible use of their wealth.



An 80 year old couple with children should try to synchronise their own and their children's financial plans.

So if the children have mortgages, then paying off those mortgages is the safest, tax-free, long term investment for the extended family as a whole. 

I can think of no better investment for a grandparent than to help their grandchild get their foot on the housing ladder. 


They probably do not need more than €200k.

But rather than give the balance away, by lending it, they can get it back if they need it.  They won't need it in the next 5 years.




Brendan Burgess said:


> If your children need money , then lend it to them. Then they can give it back to you if you need it.
> 
> Likewise, a good use of your money would be to lend it to your grandchildren to help them buy homes.



Chances are that they will not never need to have the loan repaid, but if they have lent the money to 4 or 5 people, there is every chance that one of them will be able to repay the loan when it's needed.

Brendan


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## Sue Ellen (24 Jan 2021)

Have had a quick read of above and don't think anyone mentioned about the 5 year rule on disposing of assets on the Fair Deal scheme.  You may well be aware of it but just to be sure.  I understand nursing home route is not your preference but none of us know day to day what will come next.

*Income and assets*
Income includes any earnings, pension income, social welfare benefits or allowances, rental income, income from holding an office or directorship, income from fees, commissions, dividends or interest, *or any income which you have deprived yourself of in the 5 years leading up to your application.*

An asset is any material property or wealth, including property or wealth outside of the State. Assets are divided into two distinct categories, namely cash assets and relevant assets.

*Cash assets* include savings, stocks, shares and securities. *Relevant assets* include all forms of property other than cash assets, for example a person’s principal residence or land. In both cases, the assessment will also look at assets that you have deprived yourself of since applying for State support or in the 5 years before the application.

The assessment will not take into account the income of other relatives such as your children.


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## Mr Black (26 Jan 2021)

Exactly Sue Ellen that was what i was in the process of adding..


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