Husband and wife retiring within 18 months

G

Gorteen

Registered User
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Age: 58
Spouse’s/Partner's age: 54

Number and age of children: 3, aged 24, 22, 19


Income and expenditure
Annual gross income from employment or profession: €120,000
Annual gross income of spouse: €80,000

Monthly take-home pay. Joint take-home pay €8,500 plus expenses

Type of employment: e.g. Public Service

In general we are saving more than spending


Summary of Assets and Liabilities
Family home worth €250k with no mortgage
Cash of €200k
Defined benefits public service pension.
No shares
Property "in the sun" worth €200k with no mortgage. Not let, retained for family use only




No other borrowings – car loans/personal loans etc
We pay off credit card balance each month?


Other savings and investments:

Do you have a pension scheme? Both have public service pensions
Both also have substantial AVCs, so well set up for retirement in about 2 years time

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

My biggest query is what to do with the €200,000 savings? It's annoying me that it's sitting there a losing value due to inflation and poor rate of return from the bank. I don't want to risk the sum but am somewhat 'paralysed' as to what to do with it. If this was 5 years ago, I could see the value in house prices and would have bought some property, but right now I don't see any value. Have dabbled in shares over the past 20 years or so but don't want to go down that road again. Any helpful advice is most welcome
 
We live in one of the cheapest counties to buy a house, which may explain the house value.
Thinking of trading down, to be honest. It's a bit too big for our needs, now that the chicks have flown the nest
 
Gorteen said:
Have dabbled in shares over the past 20 years or so but don't want to go down that road again.
Click to expand...

I think that this is the problem. People dabble in shares. That is very random. Some will see their shares go up. Others will experience losses and get out and then remember those losses for the rest of their life.

You have to get over that.

No one on Askaboutmoney is going to be able to magically suggest some way of getting a good return with no risk.

If you leave your money in cash, it will depreciate due to inflation. That is a real and present risk. You won't feel it day to day, but cash is the riskiest investment at the moment.

Two options
1) Invest in a diverse portfolio of shares and accept that they are going to fall and rise.
2) Lend the money to your sons to enable them to buy a house

1) is by far the best option as 2) could cause a lot of family rows.

Brendan
 
You have € 200,000 in cash and are looking for a home for it with some return

1. You do not want to buy property
2. You do not want to purchase shares

Another option is to buy bonds but that's not a good option right now as interest rates are rising and will continue for the next few months, if not years.

And lastly - not much left unless you want to invest/speculate by buying gold or commodities - and this would be more speculation than investment.

Brendan's option 1 is the best anyone can offer today - and to be fair, most days
 
I think the best use you could make of the €200k is to future-proof and upgrade your existing house for a long and comfortable retirement.

Think in terms of a highly insulated, A-rated home with a heat pump, downstairs bedroom and bathroom and easily maintained garden.

Or alternatively, buy a new house that fulfils this criteria.

Is your current home close to all relevant services (shops, medical, etc.)? Bear in mind that you may not always be able to drive as you age.

And splash out on some expensive trips during the early part of your retirement. Now is the time to tick items off your "bucket list".
 
If you're uncomfortable with shares you may consider buying into an index of shaers say S&P 500 or similar. Such products take care of the diversification issue & the best performers naturally bubble to the top while poor performers drop off the bottom.

Such products are selling at a relative discount at the moment.
 
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