Some major changes to finances lately. What next?

[Longhaul1978b]

Personal details

Personal details:
Your age: 46
Your spouse's age: 47
Partner's age if not married:

Number and age of children: 3 (12, 10 and 8)


Income and expenditure
Annual gross income from employment or profession: 110k
Annual gross income of spouse/partner:75k


Type of employment -
Myself - paye
Wife - teacher.... She hopes to retire at 55 when she will have her year's done.
Thereafter will do subbing if she wishes to.

In general are you:
(a) spending more than you earn, or
(b) saving?

See below


Summary of Assets and Liabilities
Family home value: 650k
Mortgage on family home: 210k
Net equity: 440k

Property in Spain worth circa 175k. Owned outright. This is used a lot by ourselves and family. We would not consider selling or renting it out. We see ourselves spending a lot of time there in retirement.

Cash:5k

No other savings as spent all in house extension works noted below.



Family home mortgage information
Lender credit union
Interest rate.
Type of interest rate: 5 year fixed
If fixed, what is the term remaining of the fixed rate? 5 years
If tracker, what is the margin e.g. ECB + 1%

Monthly repayment:1500
We hope to increase this to 2000 post Christmas.

Mortgage was cleared in Feb 2024 however we took out a mortgage of 210k to do an extension and heating/solar upgrade of family home having nearly moved a few times.
The potential move would have meant a mortgage of 400m plus to get what we wanted /needed with kids getting older so the 210k mortgage was the least costly of the options and we are delighted with what it has given us.
Other borrowings – car loans/personal loans etc

None.
Though one of our cars is 13 years old. I do 10miles a day max in it and it hasn t given me any bother but one of these days....

Pension information

Value of pension fund: €50k plus see below.
Spouse - Teachers Pension plus see below.

Currently pay into pension €17k P. A between employers and employees contribution. This is a high equity exposure pension thru Aviva.
In addition income from PRSA held property below is also paid into seperate high equity exposed pension thru Aviva.

Wife thru PRSA office purchase below also has recently set up a private pension. Her PRSA % income from office rental goes into same.


Other savings and investments:

I'm a director and share holder of the business. If sold today my holdings would probably realise circa €400k.
No way to forecast value in 10 to 15 years time but the business is on a healthy growth journey at present.
I believe I will qualify for and avail of entrepreneurial relief when the time comes to retire.

We own outright a plot of land which generates no income. Current value circa 75k tho hope that it realises more with panning /zoning changes in the coming years. Is pure speculation.


Other information which might be relevant
During the summer a portion of my pension and the entirely of my wife's avc ( subsequently transferred to her newly created PRSA) was used to purchase an office suite at €317k.

My PRSA purchased 67% and my wifes PRSA 33%.
The office has a 5 year upwards only rental agreement which currently pays €27k P. A

There are no management costs associated which I've negotiated due to the business I'm in.

The vendors needed a quick sale for a couple of reasons and were known to me. An office suite in the same block but not with the same level of finish sold soon after at €360k so at day 1 I believe we were in a good position with the property.

Life insurance: yes 4x salary through work plus 75% long term illness.
Also seperate life assurance policy which will pay out 750k.
Mortgage will also be cleared.
My shares above by agreement will be purchased by company with funds going to my estate.

No short term debt.
No credit card debt.


My question is what should my priorities be now?

Any advise on above - could/should I be doing anything differently?

My wife wishes to retire at 55. She does a job I wouldn't wish on anyone and takes a lot of work home with her as is extremely diligent, therefore Id like her to be able to go then. Which leads me on to myself, when would I be I a position to retire and enjoy the good life with her.?
Thanks

 

[Fibbernacci]

I'm not really up to speed on the situation for business owners/directors etc but it feels like you could be prioritizing private pensions more?

 

[misemoi]

Your wife is planning on retiring from her current role in 8 years, so into the years your children will be college age. What are your plans to finance their education and how does that fit into where you see yourself scaling back? Is your newly renovated home suitable for 5 adults should your children live at home during college?

How recession proof is your work/company? You mentioned that your wife wants to step back from teaching at 55 but would like to do some other type of work - worth maybe her spending some time on deciding what this might be outside of education, talk to a career coach or investigate opportunities in the department of education/policy work?

I would also have a slight concern around the office in your PRSA. Maybe you have good industry knowledge but it feels like a slow or negative growth area, unless it is something like medical offices/facilities that are increasing in demand where normal office space is decreasing.

 

[conor_mc]

Is your business equity of 400k related to the property market by any chance, a market that you also have another 317-360k exposure to? If so, it’s quite a high level of exposure to one asset class in a specific state (Ireland) that also pays your other source of retirement income, a teacher’s pension. It’s not that long ago that the IMF were here limiting/reducing one due to a crash in the other. So as others have suggested, you probably need to build some asset class and geographical diversification via your personal pensions (ie world equities, bonds, etc.).