How much is required to retire

Cervelo said:
Or you can just make voluntary payments of €500 per year to the Dept of Social protection to claim the OAP
Click to expand...
I'm not sure that's the best strategy.

The voluntary rate is 6.6% so the OP would be paying €5k-ish p/a based on his current salary until retirement. And it would preclude any earned or investment income.

On something like a €10k rental income he would only pay the minimum €500.
 
45 and gone said:
Ok just gone 40 and I think im in a good financial position , married with 1 child

house - mortgage free valued @ €450k
cash savings €670k - 300k of this inherited
Pensions € 110k
Investments €130k
Farm land worth €350k inherited
Wife pension €80k
Wife Savings €30k
Salary 85k + Bonus
we own both our cars approx €65k between both cars
Click to expand...

Financially you are in a very good place. Like others, at first glance the figures were surprising but you've explained that you inherited €650k. You have a young child so you weren't paying for expensive childcare through your 20/30's. You are also at an age where you probably purchased your PPR pre/post boom so you paid a lot less for it than it is currently valued at. And until recently enough, you had joint income of €140k (+bonus) so it's not that surprising that you have accumulated this your wealth. The only 'mistake' you have made is that your pensions could probably have been funded more over the last ten years considering the cash wealth you have built up.

But you haven't stated when you would like to retire or what retirement looks like to you.
Is it 55 just for you or 60 for you and your spouse?
Are there plans for a second child?
Will your spouse return to work soon or remain out of work to look after your child?
Do you want to keep your (expensive) cars updated?
Do you want to farm the land you've inherited?

All of the above will have a huge bearing on your finances so a clear plan for the next 10 years will set you on the right path

A side note, you have already inherited €650k, make sure you have paid all your CAT
 
45 and gone said:
Ok just gone 40 and I think im in a good financial position , married with 1 child

house - mortgage free valued @ €450k
cash savings €670k - 300k of this inherited
Pensions € 110k
Investments €130k
Farm land worth €350k inherited
Wife pension €80k
Wife Savings €30k
Salary 85k + Bonus
we own both our cars approx €65k between both cars
Click to expand...
This should be reversed.
 
45 and gone said:
i dont understand??
Click to expand...
You have far too much cash on deposit. You should invest the amount you have in cash and leave on deposit the amount you have in investments. By using the growth of the capital markets on an amount like €670,000, you'll be alright in the long term.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Steven Barrett said:
You have far too much cash on deposit. You should invest the amount you have in cash and leave on deposit the amount you have in investments. By using the growth of the capital markets on an amount like €670,000, you'll be alright in the long term.
Click to expand...
This is correct, but it should be done in the most tax-efficient manner.

What seems obvious to me is to stuff your own pension fund at least up to tax-relieved limits while you are still working.

After that it's not so obvious. For example ETFs have a pretty heavy tax treatment (deemed disposal).

I would take professional advice on this. I think you need to be careful in how you convert north of half a million euros from cash to another asset class. Pay someone a fee for this, not someone trying to sell you a product.
 
NoRegretsCoyote said:
I'm not sure that's the best strategy.

The voluntary rate is 6.6% so the OP would be paying €5k-ish p/a based on his current salary until retirement. And it would preclude any earned or investment income.

On something like a €10k rental income he would only pay the minimum €500.
Click to expand...
I'd have read this 6.6% as being based on current salary only on year one? If that was the case - then it would seem the approach would be not pay the voluntary contribution in year one (not worth it - invest the money instead) and start in year two?

"If you paid PRSI at Class A, E or H you pay a high rate contribution of 6.6% of your reckonable income in the previous tax year, subject to a minimum payment of €500."

Voluntary social insurance contributions

Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.
www.citizensinformation.ie www.citizensinformation.ie
 
NoRegretsCoyote said:
This is correct, but it should be done in the most tax-efficient manner.

What seems obvious to me is to stuff your own pension fund at least up to tax-relieved limits while you are still working.

After that it's not so obvious. For example ETFs have a pretty heavy tax treatment (deemed disposal).

I would take professional advice on this. I think you need to be careful in how you convert north of half a million euros from cash to another asset class. Pay someone a fee for this, not someone trying to sell you a product.
Click to expand...
A discretionary fund manager won't invest it all in one day, they will invest it over a number of weeks/ months. They will also construct a portfolio of shares, unit trusts as well as funds, so deemed disposal wouldn't apply to most of the money invested.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
ashambles said:
If that was the case - then it would seem the approach would be not pay the voluntary contribution in year one (not worth it - invest the money instead) and start in year two?
Click to expand...
The wording is a bit ambiguous I agree. But I think the last year of employment is the anchor point.

My reading is as follows. OP retires on 31 December 2022 on a salary of €85k. He may then contribute until retirement at 6.6% of that €85k until he is 66.

I'm not sure if you could be strategic about it and retire at the end of January so as to have a very limited income in the anchor year.
 
You must log in or register to reply here.
Back
Top