52 year old with chronic health issues - how to ensure financial security for the long term?

[T McGibney]

"I always run into a mental block about this as I’m unsure whether to put that money into .."

At the risk of being blunt, this shouldn't be the issue here at all. The issue is that you're heavily overexposed to your employer's share price.

If you resolve this by selling those shares when the going is good or relatively good, you'll have lots of time to ponder at leisure what to with the proceeds.

Take one step at a time and everything feels a lot easier.

 

[conor_mc]

I've also experienced such a blockage and procrastination. You should try to overcome it in an informed manner.

What to do with a million euros?

Personal details Your age: 49 Your spouse's age: 54 Number and age of children: 2 aged 9 and 14 Income and expenditure Annual gross income from employment or profession: €30,000 (state job) Annual gross income of spouse/partner: €60000 (state job) Pension: have maxed AVC’s (should I also...

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Great post @ClubMan but there are a couple of additional considerations for OP. Given we're talking about 450k of employer shares and 645k of cash, I believe there are IRS tax considerations on bequeathing of US shares over a certain amount, around 100k from memory? Not a major issue though if intent is to expend this pot prior to other assets (e.g. pensions). But there are potential tax (CGT vs income tax) and COAP qualification considerations there too.

 

[ClubMan]

I believe there are IRS tax considerations on bequeathing of US shares over a certain amount

If the shares are held in the US (e.g. the likes of E*Trade), probably.

Key Post - Be careful if you hold more than $60,000 in US equities

Of course what most people don't appreciate is that if you are not a US citizen or US resident and you hold more than $60,000 in US equities then US estate taxes apply to transfers between spouses on death. That's right if you die your spouse or civil partner would have to pay US Estate taxes...

www.askaboutmoney.com

But...

Key Post - Be careful if you hold more than $60,000 in US equities

Of course what most people don't appreciate is that if you are not a US citizen or US resident and you hold more than $60,000 in US equities then US estate taxes apply to transfers between spouses on death. That's right if you die your spouse or civil partner would have to pay US Estate taxes...

www.askaboutmoney.com

But there are potential tax (CGT vs income tax) and COAP qualification considerations there too.

I don't understand this point? In particular, qualification for the contributory old age pension is based on one's PRSI records and has nothing to do with income tax or CGT.

 

[conor_mc]

I don't understand this point? In particular, qualification for the contributory old age pension is based on one's PRSI records and has nothing to do with income tax or CGT.

Both relate to a situation where the intent is to deplete the shares pot before dipping into the pensions pot in order to avoid the US equities tax kerfuffle. In the first point, selling shares to create an income is subject to CGT and therefore foregoes Income Tax allowances, and the second point is that in doing so rather than drawing a pension from an annuity or ARF, one would potentially be foregoing PRSI credits that can be earned from ARF income, if I'm not mistaken?

 

[Errigal1983]

Another way of thinking about this is that you have €1.7m in investments apart from your family home.
You are earning €75k which is probably about €40k after tax. So working for a year increases your net wealth by about 2.5%.

So it won't materially impact your wealth if you retire early on health grounds.

Thanks Brendan, this is a helpful way to frame it. I do have some more company shares vesting each quarter over the next couple of years, so financially it’s worth continuing to work the few hours that I do.
My employer pays health insurance for me and my family, which helps too.

Separately from that, I enjoy working to the degree that I am able. Also, my medical team has advised me that it’s beneficial for me to do so.

I am prioritising my health in all of this. If I’m having a particularly rough week, I reduce time spent on work further or take time off. My employers have been very understanding of this, probably because I have a definite diagnosis and because stress makes things worse for me medically.