Pension fund is currently worth 350k, been maxing it out for the last few years and will keep doing that, as it's the most tax advantageous thing to do.How well is your pension funded? And if the stock is in RSUs that will be subject to income tax is the 3m gross or net?
Think of it this way I'm assuming you spend circa 3.5-4k a month at the moment? At that rate 1.5m would last you over 30 years so in reality you'll already be set for retirement leaving aside your actual pension, rental income and state pension and cash already accumulated.Pension fund is currently worth 350k, been maxing it out for the last few years and will keep doing that, as it's the most tax advantageous thing to do.
3m is gross, so roughly half that after tax.
I probably spend more like 2-3k a monthThink of it this way I'm assuming you spend circa 3.5-4k a month at the moment? At that rate 1.5m would last you over 30 years so in reality you'll already be set for retirement leaving aside your actual pension, rental income and state pension and cash already accumulated.
So what else would you like to do? Having that kind of cash lying around is great and I'm sure someone else will come along with a sensible idea of how to invest it, but personally I'd be spending a little more of it now as your objective of a comfortable retirement has already been met.
That almost certainly means equities. Ideally direct investments given the lower charges and tax, but indirectly via unit linked funds or ETFs is also an option.only aim being to beat inflation and make modest returns in the long term.
2-3k a month as a family or just you personally? I presume that's just you? I'm not saying you are living miserly but I'm just making the point that you have probably already hit your goals if the RSUs materialise so as the other poster said start transferring to the kids in a tax efficient way and look into a good financial advisor and maybe think about when you'd like to retire and what that would look like.I probably spend more like 2-3k a month
I have made some large purchases/spends over the last year (paid off mortgage, spent 100k on a car). The figures above are after that spend has been taken out.
So not living miserly, we go on nice holidays, our house is perfect and don't want to make any changes (bar minor makeovers to certain rooms).
Really don't desire to spend needlessly on anything else, wealth accumulation for me has always been about financial security, and not trying to afford some lifestyle (I am perfectly happy with my current lifestyle).
The large amount of cash is due to moving back to Ireland from abroad so many investments abroad had to be liquidated, I don't want to leave that cash sitting there depreciating (have much of it in raisin and similar savings accounts for now). So mostly looking for advice about good ways to put it to work, with only aim being to beat inflation and make modest returns in the long term.
Advice may be to get a financial advisor, and would really appreciate any recommendations people may have.
@angryInch
As your age, levels of wealth, income, and spending you will have more money than you ever need!
You should be focussed on minimising a very large tax bill for your children when their inheritance arrives.
A few points:
- You and spouse should already start making a €3k a year transfer to each of your kids that will not count for CAT purposes under the small gifts exemption. So that's €12k a year. There are various products and I've seen bare trusts recommended here on aAM;
- Uncrystallised capital gains expire when you do so there is no point in you being taxed on capital gains and then your kids being taxed on their inheritance some years later. That's a kind of double taxation. So it makes sense to have wealth in a form that can be liquidated if necessary but ideally held for a lifetime to contributed to inheritance. So for me this favours direct holdings of a diversified basket of equities. ETFs would be subject to deemed disposal taxation while the properties would likely have a large capital gain the longer you hold them. To do this right you might need professional advice;
- I don't think bank collapse is likely but you should still spread €850k across several institutions, up to the guaranteed €100k per depositor or €200k per couple;
- Company going public is not a sure thing. There are lots of cases of failed IPOs out there and you should make plans for what happens if it doesn't work out;
- Finally and most importantly enjoy your wealth! You can easily live in a bigger house and spend more per month. Money doesn't automatically bring happiness but for sure there are things where it could bring you pleasure.
Unless you are tax resident in a country where there is 0% CGT at the time you divest.3m is gross, so roughly half that after tax.
Yes, definetly in your situation. Money well spent.Advice may be to get a financial advisor, and would really appreciate any recommendations people may have.
Just because he came out of retirement and went back to work doesn't necessarily mean that his own personal retirement planning failed which is what you may be implying?I enjoyed the profile of one of the advisers recommended:
He set up his own pension firm more than 20 years ago from which he retired in 2020. In February this year he decided to come out of retirement.
Barry’s vast experience allows him guide clients through their ever changing life stages and he specialises in retirement planning,
There's a lot of focus on this bit but I'd be cautious about counting my chickens on this one. My wife's pre-IPO employer has been 1 year away from IPO for about 4 years now, and if anything it looks further away now than when she joined. Also you should be realistic about valuations - her employer barely cut their internal valuation in 2022 despite comparable public companies valuations falling >50%. You would also find your holdings being significantly diluted in an IPO.Also have around 3 million USD with of RSU's with a company that are likey to go public in the next year or 2.
There's a lot of focus on this bit but I'd be cautious about counting my chickens on this one.
RSUs tend to be subject to income tax not cgt.Unless you are tax resident in a country where there is 0% CGT at the time you divest.
That's where my head would be at if I were in your lovely shoes.
3M vs 1.5M by moving to another lovely country of your choosing for a while. Give it some thought.
I don't think so. Saving 33% CAT on €12k a year is €4k - do it for two decades and it's €80k saved. It's not nothing. OP should find a product, set up the standing order for the benefit of the kids and just leave it alone for years.Giving €6k a year to his kids is irrelevant in the scheme of things.
I fully agree. This is where almost all of the financial risk lies.He is not making any plans on the basis of receiving €1.5m in the near future.
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