On track for retirement

[Bernardchris]

Hi, a friend suggested I look at this forum and I've picked up lots of useful info.
Looking at our current position any advice to optimise things.?
In particular anything that could be done to allow us to retire given time lines below.


Age 44
PAYE Worker & shareholding
Income €75,000
Bonus €20000 PA,
€5,000 single annual contribution made by employer to my pension

Pension:
Executive Pension (med to high risk funds)
Current Value €200,000
Current Employer Contribution @ €700pm
Current Employee Contribution @ €800pm


Spouse.
Age 45
Teacher - 24 years service
Income €70,000
Teachers Pension
Avc annual contributions @ €6k
Current Value Avc @ €120,000

Other:

3 children, under 10

Main PDH – Currently € 90k Mortgage outstanding (2.9%, 10year fixed)
Value 500k
Currently overpay mortgage @ 1000 pm (total paid)

Holiday home, Spain. Mortgage free, value 150k

Site value €70K

Shareholding – worth circa €300k which business will purchase back through a single pension contribution upon retirement if this method of realising thier value is my preference.

Savings - €85k (we call it the college fund)

No personal loans
No credit card
Serious illness insurance in place
I have 4 times death in service policy in place.

Going forward we may look to move to a bigger home tho economic uncertainty giving pause for thought, also fact we could basically be mortgage free is leading us to wonder if the trade off for a bigger house is worth going back into mortgage debt.
Alternatively could look to extend current property, circa cost €125k

My wife wants to retire at 55.
Ive always had thoughts of doing likewise however my youngest will be 17 then so much as I'd like to I dont see it being possible.

Notionally I've had a pension figure of €1.25m in my head for years which would allow me to walk away.

We dont have an expensive lifestyle, happy with used cars. Don't smoke, rarely drink. Could easily live on a combined income of 4k per month in retirement. (however would like to be able to help out with kids weddings, house down-payment & such items)
In retirement would like to spend 6 months a year in sunnier climates.

 

[Clamball]

I guess your number 1 decision is are you moving or not. If you are moving stop paying the extra €1K into the mortgage and building your savings to have the lump sum needed to move, 20% deposit, costs & fees. And if you are not moving is €125K realistic for the extension, again stop paying extra against the mortgage and maximise savings to fund the build.

There probably is no right or wrong decision on whether to move or not or extend or not. You and the spouse should sit down, discuss the pros and cons and just decide. You probably have a myriad of personal considerations to take into account so only the two of you can determine if you should move or build. Moving now when the kids are under 10 sounds ideal so I wouldn’t delay in making that decision.

It looks like you can well afford to trade up as well.

Either option will wipe out your savings (would you sell the site or are you planning to build there for the trade up?)

Then to maximise your pensions take your take home pay, decide how much you need to live on (€4K per month?) carry on paying down the mortgage and put the rest into your AVC, as much as you can. You want 1.25 mil, you currently have €300k from the business and 200K from the pension so a lot to build in 10 years.

You probably will be in the midst of college years when you are both 55. But if you are aggressively building a pension fund you might not have the income or cash reserve to fund college. Maybe the site or the holiday home will need to be sold?