Lacking a plan

I

Ihana

Registered User
Messages
118
Personal details

Your age: 45
Your spouse's age: 45
Partner's age if not married:

Number and age of children: 2 children aged 7 and 8. One child has a lifelong disability and is unlikely to live independently.

Income and expenditure
Annual gross income from employment or profession: 72000
Annual gross income of spouse/partner: 58000

Monthly take-home pay: 7300
Mortgage 1100
Groceries 900
Childcare 800
Insurances 450
Car payment 550
Utilities 250


Type of employment - Both public servants

In general are you:
(a) spending more than you earn, or
(b) saving? We are saving and then spending on big projects. Currently save over 1000 euro a month
420 into a higher interest regular saver account
300 into an instant access rainy day account
350 into personal savings
And then anything extra gets dumped into another deposit account.

Summary of Assets and Liabilities
Family home value: 450000
Mortgage on family home: 180000
Net equity: 270,000

Cash: 14,000
Shares: about 25,000
Total net assets:


Family home mortgage information
Lender Haven
Interest rate 2.55% Fixed ending next month House has A BER rating now.

Remaining term: (Original term is not relevant) 18 years
Monthly repayment: 1084

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month? Yes

Car loan 550 per month for EV

Pension information

Value of pension fund:
I put 300 per month into AVCs. I will increase that if I can once we have decided what to do re mortgage.
I only have 10 years of pension contributions to my name (long story).
My partner will have a full UK pension and Irish pension as well as the public sector pension.


Other savings and investments:
CRH and Paddy Power shares which ought to be sold. Roughly worth about 25k. Not easily sold off now!

Other information which might be relevant
I also run a small farm (owned by a parent) that turns over about 20k per year at present. Any money made is invested back into it. Its mostly a hobby and an interest for both children but especially beneficial for my disabled child. I try to keep the farm finance separate to our employment income. So we neither put money in or take it out for family finances. I have a loan that was taken out there to purchase machinery that costs 280 per month against my name. That ends November 2026.

Life insurance: 3 policies
1 x mortgage protection (29 euro per month)
1 life assurance (35 euro per month)
1 x specific policy that will partly fund disabled child's trust (81 euro per month)


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

I am posting here as feeling a bit directionless at the moment. Obviously our finances are very average compared to some on here and yet they could be so much worse. Its unusual for a family with my child's condition to have both parents working full time so we are fortunate that way.

The fixed rate mortgage is ending next month and we are considering remortgaging to allow us to finish the separate old part of this house and ready it to be a self contained unit for my disabled child when he is an adult in 10 years time. We have been doing work as we build up savings but it feels like it will never be finished. The most recent project was installing solar panels which will pay for themselves over time. We also installed insulation in it last year. It probably needs 40k to finish.

Our goals are to finish the old part of house and prepare for retirement and set up both children well. Not going to kid myself that I can retire early.
 
Might be worth adding the total value of AVC’s, and level of cover for life cover, etc.

I agree with you that your finances could be so much worse, and tbh it’s okay to take a breather and not be diving straight into the next project. It might feel directionless in the moment, but maybe it’s just a bit of a break that everyone needs occasionally. I’ve not experienced it but have seen how tough it can be to raise a child with a disability, so goodness knows it’s a deserved breather for you both!

In terms of your specific question regarding remortgaging to finish the self-contained unit, it wouldn’t be the worse idea but feels a little like you might just be impatient with the pace. You do have 10+ years to finish it, after all.

Excuse the question if it requires specific adaptations, etc, but if you did remortgage to finish it sooner, could it perhaps give you a source of income, even occasionally as an airbnb for example? A couple of nights a month might just offset the cost of interest.
 
A neighbour with a disabled child converted the garage and extended it. Designed it specifically so that it could qualify for the rent a room scheme. But in a few years they will be able to alter it easily to suit their child when he turns 18. In the meantime tax free rent. They a have been able to find week only tenants, students who head home Friday evening and come back Sunday or Monday. And no one over the school holidays which suits them as after all it’s a family home.

Might be worth considering.
 
jim said:
?
Click to expand...
Yes, domiciliary carers allowance, carers support grant and the tax allowance (forget what its called.)
The two standard life assurance policies are 200,000 each up to age of 65.
The specialist life policy pays out 100,000 for each parents death before 65 and 50,000 after. Not the best performing investment probably but its secure.

One thing I'm wondering is if I should set up a savings policy with Zurich for example for university, or if I should just bang everything into my AVCs. AVC was only started in mid 2023 (with cornmarket) so it wouldnt be worth much yet.

We have considered something like AirBnB or rent a room but Im not sure it would work with our setup and we're not in a location that could take students. AirBNB would be the only option really.

Thanks for all the answers so far.
 
1% Annual management charge. I looked into it before and it seems ok

0% charge for regular premium contributions
4% for single premium contributions
 
What public sector pension schemes are you both in? Are your retirement ages 60 or 65? Either way you will have a shortfall of 10 or 15 years. AVCs or service purchase are considerations for you.

How much service does your spouse have? The Irish social welfare pension could be consolidated into the total occupational pension ie your spouse may not get a SW pension in addition to say a 50% salary pension.

What would be your projected retirement pensions based on current salaries on retirement dates? It could be relatively ok plus the UK pension also.

Re the car loan, that amounts to over €6,500 a year; whenever, that’s cleared it will give leeway for further spending or savings choices. Have you the option to clear that?

Will €40k complete all the necessary works on the house? the options for rent a room etc are interesting if your domestic situation permits. Otherwise, there is no pressure on you to complete the work now and you could leave it for another few years. It probably is a challenging and expensive time to get work done and get people to do it. There’s no guarantee that that situation will improve but it might.

What’s the situation with farm – it's owned by parents, you have borrowings for it, it has turnover of over €20k and presumably makes a little profit.
Who is sorting that for tax purposes? Are there any issues for social welfare purposes for your parents (means testing for anything etc). I’m just wondering; maybe it’s an unusual situation or maybe not.

How much is a small farm that turns over €20k worth? It’s an asset that sounds like it will be yours in the future.
 
Thanks thats all a lot to think about.
Retirement ages are 65. I will have 30 years service at 65 in the SPSS as service was broken.
Partner will have 20 years service in SPSS plus 13 years private pension (unsure of details - its just sitting there for last few years) plus full UK pension plus Irish social welfare pension. Still sorting the UK pension contributions so when thats done will look at whether AVCs are an option for partner.

The car loan is a necessary evil I'm afraid for now. Its PCP but will only have a 10k balloon payment at the end so plan to pay that and not get another new one. Its on 0% finance. Its an EV and we do high mileage so have significant fuel savings over the previous diesel (approximately 3000 a year). I don't think there's a better option and believe me I've thought about it. Have another (very) old car that is owned outright. We have tended to keep cars a long time so depreciation isn't such a big issue.

Don't have clarity on costs for finishing house yet. Architect coming Friday to brainstorm ideas. The separate accommodation wasn't thought of until recently so wasn't part of the original plan.

Farmland is owned by parent who is living independently and reasonably well off but herd number is in my name now. Means testing wouldn't apply to anything at present. Hard to put a value on it but the part I'll inherit is probably worth around 400,000. Have an accountant that looks after tax side of things. Longer term aim is to get it into a state where we can take a small income out of it, but need to build it up first. Trying to do that without getting into debt.
 
Just a small point. As you are both in the SPSS you "normal retirement age" is the same as the age at which each of you become eligible for the Contributory State Pension. This is current 66 but may well rise. That is unless either or both of you are in one of the "fast accrual" grades rather than the standard SPSS.
 
Ah yes of course. Its 66 at least. Mortgage will be paid off at 62, so might see where we are closer to the time.
 
I suggest that you project, as best you can, what your pension income will be on retirement.

There are different pensions – 2 SPSS, Irish Social Welfare, spouse’s old private pension and a ‘full UK pension’. It’s far from clear, how much they will deliver. Get a pension adviser to help with the calculations, if necessary.

Once you have an idea of that projected income, you will be able to decide what to prioritise, and in particular if spare funds should be directed towards pensions.

I wouldn’t be inclined to put money into renovations until you have greater clarity on the pension situation. Maybe, if it's going to make a decent return for you - rent a room etc - then you could reevaluate.

Your plan with the car seems fine.

I think that you are involved on a farm, worth €400k, that will need investment to get a small income from it. Is that understanding correct?

Come 65, you are going to be asset rich, but your recurring income is not clear.
 
Ihana said:
Obviously our finances are very average compared to some on here and yet they could be so much worse
Click to expand...
I wouldn't say that, you are in a good place financially. A very comfortable LTI on your mortgage, two public sector pensions and most importantly, you seem to have a good handle on your expenditure.

The car finance is the only item that stands out but you've already explained that one. While it looks like a lot, the running costs offset a lot of the capital payments so you get a better newer car for the overall same cost to you. I wouldn't worry about it.

Ihana said:
The fixed rate mortgage is ending next month and we are considering remortgaging to allow us to finish the separate old part of this house and ready it to be a self contained unit for my disabled child when he is an adult in 10 years time
Click to expand...
Your LTI is good so this would not stress you financially. The only decision you need to make is how valuable it is to you now. Will the renovation make it a useful space for the next 10 years and will it still be fit for purpose in 10 years or will you need more adaption?

If it makes your living space better and will benefit you, then go ahead and do it.

Ihana said:
Its unusual for a family with my child's condition to have both parents working full time so we are fortunate that way
Click to expand...
If you feel you are lacking direction (which I don't think you are) then this is the item I would focus on.

You obviously have a great support network to keep working but what would happen if this changed?

You don't have to elaborate here but maybe just think about it yourself. For example, what if a sibling moved away, a grandparent passed away or health failed and they need to rely on you instead etc...

Would any of these things impact on both of you continuing to work , would you become a single income family, which income would be lost? In net take home terms, how would that effect you etc.

I think if you know what this looks like then you are in a very good place financially and personally
 
Yes, one thing that makes me nervous about remortgaging now is that the current very affordable payment would also be manageable on one income should anything happen to any of us or if our circumstances change. But on the other hand maybe we should future proof the place while we are in a good financial position to do so. And yes we would be using the renovated space immediately. Wouldnt necessarily install a full kitchen/bathroom immediately but just set it up for that later. Its our own decision really. Will have more clarity on it when we've decided on what exactly we are doing to the old house.
 
You must log in or register to reply here.
Back
Top