Public Sector & Private Sector Pension- best allocation of incomes?

1eyeonthefuture

Registered User
Messages
19
Hi All

First time poster but a lurker for years. Any advice would be fantastic. In fact just sitting down and writing out our current position has been somewhat helpful.


My Details:
Age 41
PAYE Worker & Director of current employers with a small shareholding
Income €55,000
Bonus approx. €15,000 PA, of which €5,000 PA single contribution made by business to my pension in addition to that noted below.

Pension: New Ireland Executive Pension (Passive Iris)
Current Value €79,000
Current Employer Contribution @ €700pm
Current Employee Contribution @ €500pm
Projected Fund Value at retirement (aged 65) @ €627,500
Spouse Details:

Age 42
Teacher In position since 1998, so 21 years service
Income €65,000
Pension Teachers’ Pension
AVC’s Current annual contributions @ €5,800 (monthly circa €450)
Current Value @ €77,000
Projected value at retirement age of 55 @ €222,423
(100% Cornmarket Balanced 0 Strategy 5 years)

Other:

●3 children, youngest is 3 years old
●Main PDH – Currently € 110K Mortgage O/S (value circa 430K) (20 years outstanding)
●Rental Property – Currently € 90K Mortgage O/S (value circa €120K) (was my wifes before we met, has only begun to "wash its face" )
monthly rental income @ €800 / Mortgage @ €810
●Investment Purchase of Commercial Site / Land – value circa €60K but should increase. Mortgage free.
●Shareholding – currently hold a small shareholding of business which if sold today would be worth approx. €100,000. This cannot be divested until such time my employment ceases or I retire. It has been agreed that the business will purchase / I will give back these shares in the most tax efficient way possible – basically am saying that there will be a flexible position taken by both parties when the time comes to part ways.

●in the position that parents have already shared their living will and in the future I / my estate will benefit as follows:

-- Rental property – (currently €600 monthly income / €120K Value)
-- Foreign Holiday Home – (no current income from same /€200K Value)

Queries
Embarrassed to say neither my wife or myself have ever got a proper handle on retirement planning.
A colleague mentioned to her that as she has contributed to AVC’s since beginning employment she is most likely paying too many AVC’s which prompted us to look at our situation.
Does anyone have an opinion / advice as to whether from an efficiency point of view is she is paying too much in AVC’s and if this should instead be taken as income which would allow, either
  • myself to increase my contributions
  • Pay down the mortgage on one of the properties
  • My wife to take out a separate pension rather than continue to pay into AVC’s.
While our house is our main asset, and the following would not be ideal, in the future when kids are beyond college we would not discount moving into the investment property and thereafter letting out the house which would currently command €24K rent P.A.

Ideally we would both like to retire early if at all possible, especially my wife – is she able to buy years given the level of AVC’s paid up and possibly go at 50 ?
Alternatively we have spoken about possibly taking a career break ( her 1 year, myself 6 months) and taking the kids travelling for 6 months - would this be feasible.
Any other comments or advice? – all appreciated.

Other Info -
In terms of future large expenditure, we are largely happy with our home ( may look at doing a garage refurb at approx. €30K).
No other loans
No credit card debt
Very little savings (circa €10K)
I currently have a serious illness insurance policy in place. My wife does not.
Thank you for any help – when I start to look at retirement etc a certain amount of panic sets in as we just don’t know how we are set
 
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