Money Make Over Needed - Couple Mid Thirties

S

stickman1019

Registered User
Messages
11
Hey Guys;


Looking for financial makeover advice !!

We are a couple in our mid-thirties here no mortgage small savings just wondering what we should be doing and is there anything could be doing better

Savings built up - any suggestions for investment options:


Only major upcoming cost is 7 seater car budgeting 15K for this in the next 12 months.



Personal details
My Age: 35
Spouse’s age: 37
Number and age of children: 2 (+1)
Ages 5 and 3 & One on the way.


Income and expenditure
My Annual gross income: 95K
Spouses gross income 62k – Longterm may fall to 45k with wife returning part time after maternity leave

Home
Family Home – No Mortgage

Home Life
Moved into new build 4 years ago - Most major costs have been accomodated for in the build by now just some gardening around the place.
Wont be moving anytime soon.


Work
My job = Engineering Contractor (Contract Ltd Company)
My Spouse’s job = HR (Permanent)

Savings & Investments
Main Savings = 39,000 (3.5k per month) – Will drop to 2k when wife goes on maternity.

College Fund
Children’s Allowance 280 p/m = In Zurich Fund Prisma 5 (Current Value 15K)

Pension & Retirement
Me = Directors Pension 12k per year (24k current value)
Spouse = Company Pension (6% per annum matched by company @16k)

Loans
None

Credit Card
2k limit allways paid off before interest due

Assets
None

Insurances
Me = No Income Protection or Life Insurance
Wife = Wife has Income Protection 30 weeks & €248k Life Insurance policy through work 4 x Yearly Salary (4x62k)

Health insurance
Family policy under wifes work package = Laya Premium end package


Potential Investments
Always would have envisaged the 2nd property but a bit reluctant in the current climate due to the view of landlords in the country and how the government are treating them.
 
Last edited:
Do you have life insurance, permanent health insurance/income protection insurance ?

Do you see yourselves staying in your current home long term ?
 
You need life cover and income protection to start with.

Saving €3,500 a month but not making any personal pension contributions? Your pension is underfunded given your age and income so you are playing catch up. You should be redirecting more money into that.

You also need to think about what other big personal expenses you will have in the future? Education and mortgage are the biggest. You don't have a mortgage, so you have lots of surplus income. Saving now means you don't have to contribute as much to cover future costs.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Hi Steven thanks for the reply.

I currently have 1k per month going into a directors pension. How much more should I be putting in ?

Is there a rule of thumb % of my wage that I should consider.


I suppose on the Income protection and life insurance my views on risk might be a little different to yourself I have stayed away from these products so far for the below reasons. Maybe my reasoning are a bit skewed and I should re-consider.

Mortgage is payed off if I lose my job long term we could survive on spouses income alone(job is very stable). Should we both lose our jobs then she still has a decent income protection and company package.


Parent are also young enough on both sides should we need assistance should one of us have a major accident and be out of work for an extended period.


Not saying I would never get these product but at the moment (5years) I feel we have adequate cover.

I could potentially put another few k a month into my directors pension but it this having all of my eggs in the one basket?
 
Disability/illness can take many forms. It could be a bad back or your could be in a very serious car accident that results in you needing constant care. It is so broad. Are you happy for your wife to take on the role of your carer and raise 3 children?

And what if you died? Or she died? Will you be able to carry on your own job and raise 3 children? Unlikely.

The chances of you being unable to work or dying prematurely is small, but it does happen. That is why we insure the financial risk of it so we are looked after financially if it does. For me personally, I view it as a cost of having a family. I want to make sure they are financially secure if something happens to me or my wife.

On your pension, put in as much as you can. If you are a company director, reduce your salary and redirect some of the money you are saving. If you are savings €2k a month on your own, you can reduce your take home pay by €12,000 a year which is another €24,000 a year into your pension. €2k a month for 25 years at 5% return is €1.19m


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Thanks Steven; thinking that situation out again its hard to argue I probably need re-adjust in terms of my cover.


Might be a stupid question but is a pension the most solid investment ?


I suppose what is stopped me from the pension is that my dad retired around the start of last recession. And the value of his pension he paid into for years fell substantially before he got to draw down.


Should I be looking at other long to medium term investments such as stocks or ETF's ect ?



Why would the pension be a better investment than these ?
 
your money goes into your pension gross not net and you can have your pension invested into whatever you want generally.
 
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