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peterbanks

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Age: 57
Spouse’s/Partner's age: 57

Annual gross income from employment: €67K (Self Employed, LTD company)
Annual gross income of spouse: €105K

Type of employment: Me, self employed, Ltd company, Spouse, public servant

Saving approx. €4000 per month

Rough estimate of value of home: 1.1M
Amount outstanding on your mortgage: Mortgage free
What interest rate are you paying? N/A

Other borrowings – No Debts

Do you pay off your full credit card balance each month Yes
If not, what is the balance on your credit card? €0.

Savings and investments: 130K maturing in a 10 year solidarity bond later this year. cash of €280K sitting in deposit account, €100K in Irish life funds.
Conservative estimate on may value of company if sold (possible happening soon as we are deciding over an offer) €900K

Do you have a pension scheme? Yes, Zurich pension with Approx 550K, only started this pension 3 years ago and have been maxing out my personal contributions and putting in company contributions to get to this amount, i will continue doing this.
Spouse has public service pension, she will have 28 years of service at 65 but has been buying back years to make up the short fall.


Do you own any investment or other property? We own a second property close to home valued at approx €550K, this is mortgage free. we have a relative staying in it at present until we decide what to do with it.

Ages of children: 3, all adults and working independently, they do stay with us a lot but are not a financial burden.

Life insurance: Yes, 600K on death, wife has whatever PS are entitled too.

What specific question do you have or what issues are of concern to you?
We have €280K in cash, are pension maxed and have no wish to own anymore property, our house in in great order and needs for nothing. any advice what we should do now bearing in mind an additional €130K is maturing later this year.

Many thanks in advance for any help on options.
 
@peterbanks

How is your pension invested?

One approach would be to maintain an all equity allocation in your pension and keep your after-tax savings on deposit (AIB’s 2-year rate looks good).

Seems a shame that you waited so long to start a pension but I guess you are where you are…
 
You mentioned you’re maxed out on pension contributions but could you increase your salary in order to increase your employer contributions?
 
You have non-PPR assets of 510k cash/bonds (130+280+100), 550k pension, 550k second property, a 900k business, as well as a PS pension, and probably a COAP too?

My advice, genuinely, is to start enjoying your wealth!
 
As Conor says, start enjoying life! On the finances front, would there be a deal to be made on the sale of your business to keep you on as a director or part time MD/advisor on a good salary of say 115k with say 20% employer pension for 3-8 years so you could continue to make max pension AVCs of 35/40% for a few more years? This could get you 60k or so a year into your pension wrapper. You might prefer a clean break but with your other assets, building up the pension to 7 or 800k the leaving it to grow will eventually get you the tax free lump sum and 20% taxed portion back which is a strong return compared to most other things you could do with the proceeds of the sale.
 
I’ve thought about this a bit, and if I was lucky enough to be in your position with a very healthy, beautifully diversified portfolio like yours, I wouldn’t be saving 4k a month after pension contributions. If I couldn’t spend it, I’d start passing it on tax efficiently to the next generation. You and your spouse can each gift each child 3k a year tax-free. Do that for a few years and each kid could get a very nice head start on their pensions or save towards a deposit for a house, or both!
 
Apologies for the silence, i was traveling the past few days, i will give a brief background which will illustrate where i am.
I left school in the 80's with no formal qualifications, i come from a working class background where education was not something of priority. i left for the UK and worked on sites where i was lucky enough to work with a very large construction company who directed me to become self employed.
Over the course of 3 years i saved enough £68K to buy my first house here in Ireland. For cash.
I then decided to travel and the rent i received covered my day to day expenses and i worked where i needed, this produced some great experiences over a 9 year period.
I arrived home at the age of 29, owning a home mortgage free, this was the late 90's.
I started working for a large firm at a basic level, i went through the ranks very quickly and became the MD for Ireland. i was also a director for other regions in Europe. (obviously a lot of detail left out but I'm not writing a book).
Through this period i was buying property and some development with others, at one point i owed the banks in excess of 5M personally.
Role on 2008-10 and the financial crash, i lost the lot bar my PPR (Not the original house, that was sold years before).
Since 2013 i have got back on the horse, set up my own company and started getting my finances in order for later life.
I paid all debts back to the banks, mainly by selling assets and getting some write offs from banks.

I have no wish to give my kid financial support unless they need it, the world is a tough place. i never asked for financial support from any of my family and i was in some sticky situations over the years.

As stated my kids are financially independent, (The eldest at 25 now earning more than his mother) we invested in their educations and two have masters degrees and one about to graduate, i am very proud to say all three when to Trinity, the first in my family.

I cannot see myself ever fully retiring, its not the nature of the beast. i have irons in a lot of fires.

In relation to enjoying life, i do this and some. we travel a lot, my main hobby is Golf (Strangely pretty good at it) and am a member of a expensive club in Dublin.

I own a few classic cars and motor bikes along with a motor home, all used regularly. I attend the Aviva stadium on a very regular basis. and have a large circle of friend.

Myself and my wife's health are excellent, we are both quiet fit and do a lot of walking.

So really i am interested in where to place cash for some form of return that will at least beat inflation.

Many thanks
 
jpd said:
There are no cash savings products that will beat inflation
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Inflation (CPI) was 1% in the 12 months to November 2024.

There are plenty of cash deposits that would have comfortably beaten inflation over that period.

There is a prevailing myth on AAM that inflation always outstrips deposit rates - it’s not true.
 
Protocol said:
You need to be giving advice, not asking for it!!

Three years savings in your 20s was enough to buy a house in Ireland!!!
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Certainly did, construction in London in the 80's was booming, also drove a brand new car home and sold it later.
 
Sarenco said:
There is a prevailing myth on AAM that inflation always outstrips deposit rates - it’s not true.
Click to expand...
It does over a sustained period of time.

The exception was 2009-13 when inflation was very low or negative and banks were fighting over deposits as they’d nearly failed and needed funds desperately.

Now banks are swimming in deposits and I doubt deposit interest after DIRT will outstrip inflation for all but short periods.
 
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Apologies if this is a little off topic and presumptuous but I think this attitude "my kids will make it by themselves" is short sighted and mean.

The world is not as you saw it when you were younger. Your children, despite being successful and well paid, may not enjoy the connections and wealth you yourself enjoyed as a property developer. They may suffer ill health, unemployment, marital breakdown or any other number of unlucky incidents. How many of your school friends were as successful as you? how much of your success was luck - joining the right company, at the right time?

I have two children and whilst I want them to work for themselves, enjoy their own success, the idea that I would keep my money for myself beyond what I needed for a full and rich retirement purely "unless they need it, the world is a tough place" is bonkers to me. You don't have to buy them a fancy car, but what if you gave them 6k every year so that they could put more into a pension? or so that they could save better for a house?

Should you hold your money until you die, you are simply giving it back to the state in the form of inheritance tax.

I'll be harsh and tell you that I don't think your world attitude or work ethic is any better than most (much like mine). You were just lucky.
 
Seaniemed said:
The world is not as you saw it when you were younger. Your children, despite being successful and well paid, may not enjoy the connections and wealth you yourself enjoyed as a property developer. They may suffer ill health, unemployment, marital breakdown or any other number of unlucky incidents. How many of your school friends were as successful as you? how much of your success was luck - joining the right company, at the right time?

I have two children and whilst I want them to work for themselves, enjoy their own success, the idea that I would keep my money for myself beyond what I needed for a full and rich retirement purely "unless they need it, the world is a tough place" is bonkers to me. You don't have to buy them a fancy car, but what if you gave them 6k every year so that they could put more into a pension? or so that they could save better for a house?
Click to expand...
I, too, will be harsh and agree 100% with the OP rather than this bluster.
 
Seaniemed said:
Should you hold your money until you die, you are simply giving it back to the state in the form of inheritance tax.
Click to expand...

Except for the not insignificant sum of 400k per child and 67% of the balance at current rates, assuming it is left to his children. But that mustn't be dramatic enough to include.
 
I think any parent these days is well aware that the next generation won't get the benefits we ourselves got...for example I had practically free university education that really gave you a step up the career ladder, lower house prices, and probably a very frugal way of living modelled by our parents (out of necessity). My kids will have only one of those but to a far lesser degree. The old adage of give them enough so that they can do something, but not so much they can do nothing applies.
 
Seaniemed said:
Apologies if this is a little off topic and presumptuous but I think this attitude "my kids will make it by themselves" is short sighted and mean.

The world is not as you saw it when you were younger. Your children, despite being successful and well paid, may not enjoy the connections and wealth you yourself enjoyed as a property developer. They may suffer ill health, unemployment, marital breakdown or any other number of unlucky incidents. How many of your school friends were as successful as you? how much of your success was luck - joining the right company, at the right time?

I have two children and whilst I want them to work for themselves, enjoy their own success, the idea that I would keep my money for myself beyond what I needed for a full and rich retirement purely "unless they need it, the world is a tough place" is bonkers to me. You don't have to buy them a fancy car, but what if you gave them 6k every year so that they could put more into a pension? or so that they could save better for a house?

Should you hold your money until you die, you are simply giving it back to the state in the form of inheritance tax.

I'll be harsh and tell you that I don't think your world attitude or work ethic is any better than most (much like mine). You were just lucky.
Click to expand...
I would argue the world is a better place now, I'm a 60's baby and only went to the UK in the 80's out of necessity. How many young adults do you hear of doing that out of necessity now a days??

In fact young adults are earning a lot more now pro rata then in the 80's, fortune favors the brave and yes i took chances when the opportunity arose and some (not all) paid off. As i explained i was not in a good place after the recession of 08.

I don't understand the idea of giving money (6k) to my kids, apart from the tax efficient element what is the point, they don't need it. i have a very open relationship with them all and they have no wish for me to give them money, we are at a stage where they buy me pints and pay for meals out.

Recently i came into a small inheritance, as i have a sibling who is not as well off as the rest of the family we (My siblings) all gave up our right to our inheritance, that's what i call fair.

If the time comes and any of my nieces or nephews need financial help i will be more willing to offer then financial aid then giving it to my kids who may or may not require it.
 
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