Can I retire in 2 years?

W

Wilson.p

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Personal details

Your age: 56
Your spouse's age: 54
Partner's age if not married:

Number and age of children: 1 - age 13


Income and expenditure
Annual gross income from employment or profession: 84k
Annual gross income of spouse/partner: 90k

Monthly take-home pay: 8k approx after AVCs and deductions etc

Type of employment -
Me - public servant pre 95
spouse - paye employee

In general are you:
Saving. €2000 to 3000pm AVCs between us depending on overtime. €3k usually into savings, but have been spending money on the house the last few years and bought a new car , house spending coming to an end now.


Summary of Assets and Liabilities
Family home value: 750k
Mortgage on family home: 100k left
Net equity: 650k

Cash:
Defined Contribution pension fund: I will get almost 50% of salary on retirement. plus about 120k lump sum
Buy to Let Property value: 220k
Buy to let Mortgage: 0

Total net assets: 650k home plus 220k investment property


Family home mortgage information
Interest rate 2.3%
Type of interest rate: fixed for 3 more years.

Remaining term: 10 years
Monthly repayment: €1400 but have done lots of overpayments too.

Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card? 0

Pension information

Value of pension fund:
Spouse : 750k private Defined contribution
Me : public sector pension plus I have 150k AVCs in there too.

Buy to let properties
Value: 220k
Rental income per year: 12k with council. 5 years remaining on lease. Probably could rent it for €1600pm today if it wasnt with the council. Went on the LTL to get out of a ludicrously low rent cap.
Rough annual expenses other than mortgage interest : 1k
No mortgage

Other savings and investments:
ETFs 40k
Cash 30k at 4%

Other information which might be relevant

Life insurance:
Mortgage protection insurance €40
20 year Term Dual life insurance 750 with 8 years left on it - €180pm

Spouses work pays medical insurance now but we will have to pay it when we retire.

What specific question do you have or what issues are of concern to you?
I guess I joined AAM to ask this.
We both want to retire in the next 2 years. Just burned out and dont feel like working anymore. I have 40 years done in the public service so can retire. Spouses job is high stress and she isnt interested in working anymore either. Kid is starting secondary school, so a few years of school left. We wont be bored. Plenty to do outside of the working day. We both took 6 months off at the same time a couple of years ago and would like to make that permanent, because it was so good.
I am figuring that if we retire on my pension and lump sum plus cash and rental income that we have, that will keep us going for a few years. Then in a few years we can withdraw spouses tax free lump sum and start drawing his pension. At 66 he will get the contributory pension. I wont get the OAP.
Every calculator I have used says this is doable, but we are kind of nervous about doing it.
We went to a financial advisor but i all we really got from it was them trying to sell us products. They were clear at all. Basically came out with nothing more than i already knew plus a sales pitch.
So I guess the question is, do our picture stack up? Are then any pitfalls and what should we be doing now?
Should we feel comfortable just retiring.
An example would be that on retirement before tax and before we draw down spouses pension we expect to have approx €40k from my pension, 10k from rental income, whatever 150k in AVCs gives me and about 80k - 100k (minus taxes) in cash and ETFs. Spouses pension fund can be left grow until that runs out.
I hope that makes sense, but trying to get clarity is one of the reasons i am posting.
 
Last edited:
Wilson.p said:
Should we feel comfortable just retiring.
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Surely that depends on what your normal annual expenditure is? Have you analysed you normal annual expenditure to know what you need to live on and maintain your expected lifestyle?
 
I’m taking it that in two years you’ll have the 40 yrs done in public service.
You need to work out what your annual expenses will be and see will you cover that.
Also consider would either or both take a stress free part time role if you needed to supplement income?
 
Wilson.p said:
Apologies im 56. Dont know why I wrote 54. Started when I left school. I'll edit that now. Should have the 40 years by the time I retire. But 39 will do.
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fair enough even at that id have asked, well done, as others have said we need to understand your annual expenditure.
 
It looks like you are currently spending around €60k per annum, based on your take home pay/savings rate.

As others have said, you really need to interrogate your expenses figure and plan from there.

But let’s assume for present purposes that you use your lump sum to clear your mortgage and your annual expenses drop to €45k.

I think you should have ample assets/entitlements to generate that level of income (after taxes) in two years’ time.

However, I think your spouse should be thinking about retiring his private pension early and drawing down a modest annual amount from an ARF to fully utilise his personal tax credits and to maintain his PRSI record.

Congratulations!
 
ClubMan said:
Surely that depends on what your normal annual expenditure is? Have you analysed you normal annual expenditure to know what you need to live on and maintain your expected lifestyle?
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niceoneted said:
I’m taking it that in two years you’ll have the 40 yrs done in public service.
You need to work out what your annual expenses will be and see will you cover that.
Also consider would either or both take a stress free part time role if you needed to supplement income?
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Thanks guys.
Sorry I got a 6000 second count down before it would let me post the reply.
Thought I put in 40k, but i must have deleted it out when i was deleting the lines i didnt fill in. Really its anything from 35k to 45k though. Remaining mortgage hopefully will be way down by then too as we overpay this at the end of each year too.
tbh neither of us have any intention of taking part time work. We want retired to mean retired. Thats kind of what is holding us back at the moment - fear that it might all go wrong.
Ideally though we would like to draw down the max amount that we could without running out of money in case we reach 90 years old :) . We only have one child so inheritance isnt going to be a problem. They will have at least one house when we go. We will be keeping the investment property. That is in spouses name and should give him class S contributions towards contributory pension when he is retired (I think).

The reason for the mismatch in take home pay and actual salary is the varying AVCs and overtime for us both and the pension levy and other numerous deductions that come off my salary.
 
From the figures, it does look as if you can retire comfortably.

But the first question you should ask yourselves is why you want to retire?

Can you change jobs to something you would enjoy more?
Wilson.p said:
We both took 6 months off at the same time a couple of years ago and would like to make that permanent, because it was so good.
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Depending on your interests, taking the rest of your working life off might not be the same. It's easy enough to fill in 6 months. But to fill in the rest of your life might be more difficult.
 
Brendan Burgess said:
From the figures, it does look as if you can retire comfortably.

But the first question you should ask yourselves is why you want to retire?

Can you change jobs to something you would enjoy more?


Depending on your interests, taking the rest of your working life off might not be the same. It's easy enough to fill in 6 months. But to fill in the rest of your life might be more difficult.
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Honestly, I dont see that being an issue at all. Neither of us have ever had any issues filling free time. But I guess if it did become an issue, we could find jobs. Oh the thoughts of it make me shudder :)
 
You might want to have a think about the rental property once the lease with council is up. Do you really want to be dealing with tenants etc when you are retired?
 
TRS30 said:
You might want to have a think about the rental property once the lease with council is up. Do you really want to be dealing with tenants etc when you are retired?
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Cant say that hasnt been a big thing on our minds. Either lease it to the council for another term at a higher price or sell it, or get an agent to look after renting it. Renting it out even via an agent is very risky tbh with the anti-landlord legislation. If you we could have control of it, which we cant really the way the law is now, the yield would be very good for the money tied up in it. I guess we have 5 years to think about that. That will be college time too, so maybe sell that and buy one wherever college is if its very far away.
 
Wilson.p said:
Cant say that hasnt been a big thing on our minds. Either lease it to the council for another term at a higher price or sell it, or get an agent to look after renting it. Renting it out even via an agent is very risky tbh with the anti-landlord legislation. If you we could have control of it, which we cant really the way the law is now, the yield would be very good for the money tied up in it. I guess we have 5 years to think about that. That will be college time too, so maybe sell that and buy one wherever college is if its very far away.
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Yes, on the plus side you have some time before you need to make a decision. Who know what could come up between then and now so probably best to reassess closer to the time.
 
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