Hi Good People,
Will attempt the screenshots first and if they are not clear will Copy and Paste.
Have had a recent enough Financial Review into AVC's and as my situation is not very clear yet, AVC was not recommended at this time - if I continue to work until 65 years. Alternative is to find out the steps for 5 / 10 /15 years investment - tax efficient? better rate of growth than deposit interest - but I am not really sure. Thank you so much for your time in advance.
PERSONAL DETAILS
Age: 50
Spouse’s/Partner's age: Single
Children / Dependents: No Dependents
Life insurance: No Life Insurance - as no home - no mortgage and no dependents.
Salary Protection: Pay €74.54 pm towards Salary protection (Cornmarket: with exclusions)
INCOME & EXPENDITURE
Type of employment: Public Sector
Profession: Post Primary Teacher
Annual gross income: Gross Pay 2022 €77,885
Dept. of Ed & Science: Salary Scale 25 (for next 10 years)
Contract: CID (Contract of Indefinite Duration)
Pension Scheme: New Entrant / Post 2004 Pension Scheme
> 26 weeks absent from working with DES in 2005.
I do have PRSI contributions for this time from 1999 - 2024
SUMMARY OF ASSETS and LIABILITIES
Family home value: 0 Renting
Other Borrowings: 0
Cash: €370000 - Savings
In general are you: (a) SPENDING more than you earn or (b) SAVING?
SAVER - Conservative spending all my working life:
WHY?
WHY?
2023 MINDSET CHANGE & AAM?
Potential Savings: (2023 Figures):
Net income (Top of Post Primary Salary Scale) = €43,296 (+ Sometimes Exam work €2000)
Estimated average living costs = €23,000 - €30,000
Potential Savings per year = €18,000 to 25,000
QUESTION 1
Ideas & Suggestions Appreciated
ADDITIONAL VOLUNTARY CONTRIBUTIONS
KEY Factors I need to think about related to retirement age & Pension:
I have No AVC's YET
QUESTION 4
Is there a way to calculate HOW MUCH WOULD THIS COST - Is there a way to calculate the cost of the shortfall?
HOUSING:
Will attempt the screenshots first and if they are not clear will Copy and Paste.
Have had a recent enough Financial Review into AVC's and as my situation is not very clear yet, AVC was not recommended at this time - if I continue to work until 65 years. Alternative is to find out the steps for 5 / 10 /15 years investment - tax efficient? better rate of growth than deposit interest - but I am not really sure. Thank you so much for your time in advance.
PERSONAL DETAILS
Age: 50
Spouse’s/Partner's age: Single
Children / Dependents: No Dependents
Life insurance: No Life Insurance - as no home - no mortgage and no dependents.
Salary Protection: Pay €74.54 pm towards Salary protection (Cornmarket: with exclusions)
INCOME & EXPENDITURE
Type of employment: Public Sector
Profession: Post Primary Teacher
Annual gross income: Gross Pay 2022 €77,885
Dept. of Ed & Science: Salary Scale 25 (for next 10 years)
Contract: CID (Contract of Indefinite Duration)
Pension Scheme: New Entrant / Post 2004 Pension Scheme
> 26 weeks absent from working with DES in 2005.
I do have PRSI contributions for this time from 1999 - 2024
SUMMARY OF ASSETS and LIABILITIES
Family home value: 0 Renting
Other Borrowings: 0
Cash: €370000 - Savings
- Long Term Renter (€750 cash)
- Big Regret - Just didn't know where I wanted to live or how I wanted to live (rural - urban etc).
- The 30's and 40's just flew by!
- None - Have no Credit History / No Credit Card
- Unfortunately Post 2004 (65 years is Pension Age) - Figures completed below.
- Benefits listed as:
- Retirement pension and lump sum
- Death benefits
- Spouses’ and children’s pensions (No Spouse or Children)
In general are you: (a) SPENDING more than you earn or (b) SAVING?
SAVER - Conservative spending all my working life:
WHY?
- Apart from Hectic Busy Work Life, I tend to live a pretty low key life.
- Long Term Renter - €750 pm
- Do have some regular medical costs (around €50 - 100 per month).
WHY?
- No real understanding of inflation / benefit of TIME.
- Fear of Managing Debt / Credit / Paperwork.
- Never bought House - Did not know where I wanted to live.
- No knowledge around investments, finances, pensions etc.
- Savings were in Credit Union, Prize Bonds, and Irish Banks like Ulster, KBC, PTSB.
2023 MINDSET CHANGE & AAM?
- Stumbled onto Ask about Money in 2023 and a few YouTubers about ‘deposits & investments’.
- Changed to N26. Using Trade Republic, Lightyear, (On Demand) Raisin (Short Term)
- Started to figure out Pension Record / AVC / PRSI etc.
Potential Savings: (2023 Figures):
Net income (Top of Post Primary Salary Scale) = €43,296 (+ Sometimes Exam work €2000)
Estimated average living costs = €23,000 - €30,000
Potential Savings per year = €18,000 to 25,000
- I have saved €370,000 since starting work in 1997. Euro by Euro!
- I do not expect inheritance or other non-earned funds/property in my future.
- Up until 2023, when I stumbled onto the AAM forum (Thank you @Brendan) and the DEPOSIT thread (Thank you by @Lightning).
- I was letting Inflation eat away as savings as they sat in Prize Bonds / KBC+UB+ PTSB Saving Account. That was all I knew about.
- Since late 2023, I have opened up accounts with
- N26 (2.8%)
- Trade Republic (3.75%)
- Lightyear
- Advanzia (3.76%)
- Raisin (4%) : maturing between now and January 2025 etc.
QUESTION 1
Ideas & Suggestions Appreciated
- I would love 'ideas' / 'suggestions' / 'options' / ‘links’ on what I could do for the next 10 years (50 - to 60 years).
- Although I have read a good few detailed threads here, I still do not know if they are relevant to me or grasp the information fully. (Buckets / PRSI thread / Executive only AVC’s / Global Equities).
- Attempting to earn some level of deposit interest with Term and Instant Options.
- Working to gain more Financial Confidence & Knowledge.
- Where can I switch from 'saving money' to timidly typing the word 'investing'. From AAM, I know I need to change my mindset from just ‘saving’ the money (back to the times of Post Office Sticker Books - squirreling away) to invest for the next 5 (up to 55 years) to 10 years (I’ll be 60 years) while I figure out if I am able to keep 'teaching' until 63 or 65 years.
- Yes Public Service
- I have managed to get a Service Record, Employment Statement / Revenue Archive Statement.
- Post 2004 - 23.5 eligible years in my 50th year.
- Pre 2004 - 4.5 years preserved pension (not sure the benefit of this, but advised not to move it over to Post 2004 if ever asked by DES to do so).
QUESTION 2
- I was able to purchase “transfer service” from working in ETB and pay €407 for 0.35 of a year.
- I will have to pay for the pension for teaching years worked in 1997-2000 ("buy back years"), as paid by the School or Board of Management. I have asked to pay for it now, but DES Pensions stated “can only be bought at retirement and cannot be bought back in the meantime”. Would anyone know why I cannot pay for this now, instead of DES taking it from the lump sum? There may be a good reason.
QUESTION 3
- Have an option to buy 2 Notional Service Years (July 1998 to Sept 1999 and Jan 2005 to August 2006). Apparently these can be very expensive? I am about to do the paperwork. Any advice or has anyone gone through this route recently?
ADDITIONAL VOLUNTARY CONTRIBUTIONS
KEY Factors I need to think about related to retirement age & Pension:
I have No AVC's YET
- I had always assumed I was on Pre 2004 Pension (as had no break in PRSI since 1999). With this information, went to aFinancial Advisor as a "Post 2004 Old Entrant" . Advice was to get a "last minute AVC" just before retirement of 60 years of approx €14,800.
- However, in January 2024, I found out that I had moved in 2005 to the NEW SCHEME (Post 2004) because I had been absent from DES payroll for more than 26 weeks, without appropriate leave.
- Option 1 - Stick it out until 65 years. OK - I do love my job! - almost more so than 'daily life' if you know what I mean.
- Option 2 - Work until 63 at least (and for this I would need to pay an AVC).
QUESTION 4
Is there a way to calculate HOW MUCH WOULD THIS COST - Is there a way to calculate the cost of the shortfall?
Option A: Retire at 65 on the post 2004 scheme | Option B: Retire at 63 on the post 2004 scheme |
NOT on a cost neutral early retirement. | Cost neutral early retirement. |
65 years - Normal retirement age is 39.7 years - Calculations based on service €81,409 - Final pensionable salary €121,198 - Tax Free Lump sum at 65 €40,399 - Includes Supplementary Pension age 65 €40,508 - Includes State Pension from 66 onwards €122,114 - Maximum Lump Sum achievable | 65 years - Normal retirement age 37.7 years - Calculations based on service €81,409 - Final pensionable salary €110,603 - Tax Free Lump sum at 65 €21,924 - Pension between 63 and 64 €33,952 - Includes Supplementary Pension age 65 €36,344 - Includes State Pension from 66 onwards €112,114 - Maximum Lump Sum achievable |
HOUSING:
- I do not own a HOUSE yet, at the moment.
- I will need to purchase it in the next 5 to 10 years.
- In 5 - to 10 years, if the Housing Situation improves with New Technology / Smaller homes for 1 person etc, I might then be able to then figure out WHERE I am going to live? It isn’t feasible to buy now near where I work right now with housing demand.
- I know I will not be able to stay renting until I roll into a Nursing home.
- I am responsible for myself. No partner / No Children / No close Siblings / Almost afraid -as I could live a long life - just read the AAM thread about 'complicated situation re Aunt with Fair Deal'. That type of scenario is ahead of me, I imagine.
- You really have to be responsible for yourself.
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