Best place for savings, and maximising public pension

WaffleNinja

Registered User
Messages
110
Personal details

Your age: 38
Your spouse's age: 38

Number and age of children: 5 and 7


Income and expenditure
Annual gross income from employment or profession: 80k + up to 10% bonus
Annual gross income of spouse/partner: 60k

Monthly take-home pay: 7500

Type of employment - e.g. Employee or self-employed.
Employer type: Private and Public

In general are you:
Saving between 1700-2000 pcm

Expenses:
Childcare/aftercare is about €500 a month
Some small house renovations in the next few years - €15-20k total.

Summary of Assets and Liabilities
Family home value: 420000
Mortgage on family home: 200000
Net equity:

Cash: 65000 @ 2.5-3% TR/AIB online saver
Defined Contribution pension fund: 130000
Company shares : N/A
Buy to Let Property value: N/A
Buy to let Mortgage: N/A

Total net assets:


Family home mortgage information
Lender: Avant
Interest rate: 1.95%
Type of interest rate: Fixed
Remaining term: 4 years
Monthly repayment: €850 + overpaying €8000 a year

Other borrowings – car loans/personal loans etc
No other loans/borrowings
Do you pay off your full credit card balance each month? Yes


Pension information

Value of pension fund:
130000 private. Contributing 15% + 5% from the company (I may be able to contribute 20% + 5% - feels like a no brainer that I should be doing this if I can)
Public service pension only has a few years accumulated, and i'm unsure how to evaluate this

Other savings and investments:
~10k in various shares. Personally managed. Happy to let things lie.

Other information which might be relevant

Life insurance: 500k coverage


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

Our current plan is to overpay on our mortgage for until the fixed term ends. This was to minimise the increase in our payments due to rate increases of late, but it looks like rates are only going down atm. This plan would mean went our kids start college we'd be mortgage free. Psychologically this seems like a great idea, though perhaps not the best use of our money.

We have some renovations we're planning over the next 2 years. Between 7-10k each year, but our monthly savings should be able to cover these easily over the next 2 years. Given our monthly savings vs renovations and mortgage overpayments we should still be adding to our pot.

With interest rates falling i'm looking to make our money work better for us than ~2-3% (lower if ECB rates keep going down). I've never looked at financial advisors, or financial planners, as i've probably always thought fees etc made them unappealing to me. We always have a question mark over whether we'd need funds at short notice if we inherit a property which needs work, so long term investments haven't appealed - though we've been thinking this for years now.

The public sector pension is something i'm quite unfamiliar with, so i'm not sure how we should be maximising it, or how to calculate it's value at retirement. I've heard about "buying back years" and "AVCs" but it's all a bit of a mystery. Public sector job was started ~2 years ago.
 
If you are in the Single Pension scheme there's lots of information about it here in particular the Member Estimator Tool to get an idea what your pension might be worth at retirement.

If you will not have 40 years service at retirement you would have the option to purchase additional pension benefits, details about that are here.

The excellent Single Public Service Pension Scheme thread goes in to a lot of detail about making AVCs to maximise the benefits you can get under that occupational pension scheme. Provides some advice about setting up AVCs with Cornmarket/Irish Life via employer payroll deductions.

If you opt to make AVCs then this thread has some discussion about paying in to a PRSA AVC rather than an AVC fund and mentions advantages of that approach (lower fees but you have to do some of the work yourself).