Retirement Planning & AVC's

B

Blue32

Registered User
Messages
6
Personal Details
Age: 45
Spouse: 41
Age of children: 6 & 9

Income and expenditure
Annual gross income from employment: €93K. Bonus 15%
DB Pension from previous employment: €17k
Monthly take home pay including DB: €3,100 (started buying shares) + €1,200 DB

Annual Gross income of spouse: €68k. Bonus 15%
Monthly Take home pay spouse: €3,300
Type of employment: Both Private
In general are you saving: Previously saving but nothing constant in the last year. Have lost the run of ourselves.
Childcare: €400 per month

Summary of Assets and liabilities
Family home worth €440k with €13k mortgage. Just recently renovated(100k).
Savings: €40k
Shares: €7k
Cars new and fairly new.

Other borrowing:
Nil

Credit card: Spouse. Paid off monthly

Other information which may be relevant: Life insurance policy 350k. Spouse €300k.
Pension Fund: €70k
Spouse Pension fund: €90k
Both funds: Employee 5%, Employer 10%

Fortunately, lucky enough to sell a rental property last year which cleared the mortgage/renovation despite being an accidental landlord. Got out for the same reason everyone else is. This website has helped me so much over the years to get back on track. That and a lot of luck!!

Looking to the next 15 years I would love to be retiring or very close to retiring at 61. Wife is happy to continue in employment past 60.

What specific question do you have or what issues are of concern to you?

Will it even possible to retire with kids potentially going to college? Would like a reasonable quality of life in retirement!

Should I look at doing AVC’s and if so what is a good amount based on my incomes?

Should we pay off the mortgage?

Any pointers/guidance on the above or anything else relevant greatly appreciated.

Thanks In advance
 
Blue32 said:
DB Pension from previous employment: €17k
Monthly take home pay including DB: €3,100 (started buying shares) + €1,200 DB
Click to expand...
Maybe it's because I haven't had coffee yet, but are you using "DB" to refer to your bonus in the second sentence, or have you already started to draw your pension at 45?

You've said you started buying shares, but it doesn't feature anywhere in your finance overview?
 
That's not the only confusing point...
 
Hopefully it’s a nice coffee RedOnion. That’s correct. I have started to draw the DB pension from my time in the public sector.

Shares approx €3,000 but will check. I think I’m putting in about €600 per month.

ClubMan- Just enquiring should we pay the €13k off the mortgage and be rid of it. Mortgage interest rate is variable.

Apologies for any confusion.
 
Shares in your employer's company?
That's generally not a good idea other than to benefit from any discounted purchase price and then liquidating them as soon as possible to invest elsewhere.
Otherwise you're concentrating risk by putting two significant eggs in one basket - your remuneration and your equity investments.
 

Presume you were on a fast accrual scheme to be drawing the pension?

You have €47k in liquid assets and a solid income with no debt or upcoming large purchases. You're in a good spot to just pay off the mortgage today. Personally, I would maximize your pension contributions for both of you, for this year and last before clearing the mortgage.
 
Blue32 said:
Hopefully it’s a nice coffee RedOnion. That’s correct. I have started to draw the DB pension from my time in the public sector.
Click to expand...
Ah, understood.

To your core question of whether you can afford to retire at 61; of you can't there's no hope for the rest of us!

Max AVCs for both of you, including for last year.

Which bank is mortgage with? If its AIB there's a benefit to keeping a small balance and get free banking.

Blue32 said:
Previously saving but nothing constant in the last year. Have lost the run of ourselves.
Click to expand...
You need to work out where the money is going. Track it for a number of months. You need to agree common goals, and both be on the same page about it.
 
Thanks ClubMan. That's correct. My plan is to sell after 3 years so not to concentrate the risk.

Thanks Itchy. I was very fortunate to be in such a scheme and only now realise the true worth of it!

Thanks RedOnion. Maximize AVC's, will do and track where the rest of the money is going.
Mortgage was with UB but is now with PTSB.
 
I’m confused. If you are aged 45, I don’t understand how you are drawing down a DB pension from the public service?
 
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