Because equities suffered a horrible sequence of returns over the period.How is it ending up worse that holding 100% in cash at 0% interest and being left with 160k?
Excluding the €730 and savings made monthly requirement would be say €3750 nett. That's a realistic average calculation factoring in seasonal and some parts of the year more expensive than others.The more I think about it, I’d definitely clear the mortgage and the car finance.
Then I’d use my €730 a month of additional cashflow to build my €8,000 back up to the desired level.
OP, what exactly is your monthly income requirement excluding the €730 and excluding any amounts you save?
i.e. in net/after-tax terms.
e.g. “We need €2,000 into our back pockets each month to keep the show on the road”
Because equities suffered a horrible sequence of returns over the period.
The problem with holding no growth assets in the ARF is that the portfolio is highly unlikely to keep up with inflation, particularly after expenses.
Okay, so that’s €60,000 gross of tax.Excluding the €730 and savings made monthly requirement would be say €3750 nett. That's a realistic average calculation factoring in seasonal and some parts of the year more expensive than others.
An annual 4% withdrawal from an €1m fund that tracks the MSCI World index starting in 2000 would have fallen to €305,000 at its lowest point, giving you an income of €12,200. An allocation of bonds would have helped somewhat.Could you give us an idea of how these figures would crunch out with say, 4% withdrawals per anum , 50and out ?
I would probably go for something like a traditional 60/40 allocation in the OP's shoes.Any thoughts on what might be an appropriate ARF asset allocation for OP given his age, plans for early retirement and size of his fund?
From my cash resources, I suppose that's why I'm reluctant to pay off the mortgage at what is a reasonably low rate of 2.9%. If I needed cash fast then I'd probably be forced to take it out of my ARF at 20 % rate (which would be ridiculous ) whilst I'm still working , even if on a lower income job as thunderin' eejit suggested earlier in the thread 'cos as you say yourself , Gordon , I'm going nowhere soon.Okay, so that’s €60,000 gross of tax.
You mentioned gross income of €40,000 at the outset.
Did you mean €40,000 net of tax?
Otherwise, how are you getting by?
I don’t think you can retire yet.
Okay, so things are a little trickier than they appeared.From my cash resources, I suppose that's why I'm reluctant to pay off the mortgage at what is a reasonably low rate of 2.9%. If I needed cash fast then I'd probably be forced to take it out of my ARF at 20 % rate (which would be ridiculous ) whilst I'm still working , even if on a lower income job as thunderin' eejit suggested earlier in the thread 'cos as you say yourself , Gordon , I'm going nowhere soon.
Well firstly, forget about retiring in the near future, that just isn’t an option unfortunately.
I presume that will fall materially once the mortgage is cleared and the kids are off the payroll.You have a €60,000 income requirement
Plus any investment returns on his ARF, which will have to support himself and his wife for 10 years less.If he works another 10 years, he will have €350k more
Do you have the current value of the ARF tracking the world index with a 4% annual withdrawal? ThanksAn annual 4% withdrawal from an €1m fund that tracks the MSCI World index starting in 2000 would have fallen to €305,000 at its lowest point, giving you an income of €12,200. An allocation of bonds would have helped somewhat.
I don't know what kind of large expense you envisage might hit you. Is it that you might have a sudden craving for a world cruise? Or, heaven forbid, one of the kids comes to you saying they have a money problem?From my cash resources, I suppose that's why I'm reluctant to pay off the mortgage at what is a reasonably low rate of 2.9%.
No.I presume that will fall materially once the mortgage is cleared and the kids are off the payroll.
I think the OP is definitely on the home straight and could plan on retiring before the imputed distributions kick in on his ARF.
Just not quite yet.
Plus any investment returns on his ARF, which will have to support himself and his wife for 10 years less.
Plus any investment returns on his ARF, which will have to support himself and his wife for 10 years less.
Yes but the OP also seems to have material educational expenses at the moment that will presumably fall away in a few years -Excluding the mortgage and saving/retirement provision, there’s a €40k net/€60k gross income requirement
My income requirement going forward , would then be say 50K per anum for next five years including my two boys' education and say €38k after that.
Well, I assume he wouldn't be drawing on the ARF if he kept working - he has 3 or 4 years before imputed distributions kick in.So he just loses the net salary if he stops working.
It’s a case that concerns me to be honest.Yes but the OP also seems to have material educational expenses at the moment that will presumably fall away in a few years -
An important factor here is they have separate tax bands / credits even if the OP retires early, so their spouse can earn 8k per annum virtually tax free, or c.24k at lower rate.Could your spouse earn some income?
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