Trying to scramble a retirement together

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speedtomyside

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Hi all just looking for any advice people might have.

For context, am 49m married with 3 kids. I was financially irresponsible for most f my adult life but am now attempting to get some sort of future together.

I have no pension but am starting a PRSA in January.

House is 50% paid off

We have €80k in State Savings, maturing in next five years (kids college fund realistically)
25k in HYSA (Emergency fund)
0.76 BTC (currently worth €71k)
ETFs/stocks - €5k (just starting off on this)
Wife has a work pension which will give her approx 11k a year, and has just started a private pension too.

Household income is €80k (not likely to change)
We drive two old cars and shop in Aldi. Just spend money on kids/essentials really.

I’d like to keep the BTC as I see it appreciating over the next five/ten years.
I’ll be putting approx €500 per month into the PRSA and at 66 I’ll qualify for the contributory pension (currently €270 or so). Is there anything you good people would suggest I do, or do differently?

I know we're in an ok position compared to a lot of people but (especially after reading about other peoples' pension pots) I can't help thinking we're screwed!
 
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It might be better if you did a proper Money Makeover post:

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
There's not really sufficient information in your post above to do a proper analysis of your overall situation and offer useful advice - e.g. no real details about your mortgage.
 
speedtomyside said:
Hi all just looking for any advice people might have.

For context, am 49m married with 3 kids. I was financially irresponsible for most f my adult life but am now attempting to get some sort of future together.

I have no pension but am starting a PRSA in January.

House is 50% paid off

We have €80k in State Savings, maturing in next five years (kids college fund realistically)
25k in HYSA (Emergency fund)
0.76 BTC (currently worth €71k)
ETFs/stocks - €5k (just starting off on this)
Wife has a work pension which will give her approx 11k a year, and has just started a private pension too.

Household income is €80k (not likely to change)
We drive two old cars and shop in Aldi. Just spend money on kids/essentials really.

I’d like to keep the BTC as I see it appreciating over the next five/ten years.
I’ll be putting approx €500 per month into the PRSA and at 66 I’ll qualify for the contributory pension (currently €270 or so). Is there anything you good people would suggest I do, or do differently?

I know we're in an ok position compared to a lot of people but (especially after reading about other peoples' pension pots) I can't help thinking we're screwed!
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Your wife's 11k pension plus 2 contributory pensions already should have you not a million miles away from what the the recent report describes as comfortable for a couple (€43.2k).
Two full contributory pensions plus the €11K comes to €39.9K which for a married couple in retirement would give a net of about €39.5k, about €4K p.a. short of the 'comfortable' figure.
Because deductions are so low at this level, you'd need not much more than an extra gross €4k p.a. pension to get you to that.
And if that doesn't sound like much, another poster described his parents, who have €52k net pa in pensions as being unable to spend it all.

You say you're half way through your mortgage so presumably that will be paid off by retirement.
€500 a month in a prsa with a real growth rate of 4% would amount to €144,773 after 17 years when you'd be 66 (see here).
Assuming your fund continued to earn returns of 4% during retirement then if you were happy to bet on not living
past age 91 you could pay yourself €758.46 a month (9k p.a.) for 25 years (see here).
Then the 2 full contributory pensions plus your wife's €11K pension, plus your €9k pension gets to to €48.9 gross which would be €47k net p.a.
I think €3.9k a month in your hand with no kids or mortgage sounds like plenty. Currently you probably have €5.5k a month but with all those other expenses.
 
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ClubMan said:
There's not really sufficient information in your post above to do a proper analysis of your overall situation and offer useful advice - e.g. no real details about your mortgage.
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Thanks I'll stick a post up there.
jimmij said:
Your wife's 11k pension plus 2 contributory pensions already should have you not a million miles away from what the the recent report describes as comfortable for a couple (€43.2k).
Two full contributory pensions plus the €11K comes to €39.9K which for a married couple in retirement would give a net of about €39.5k, about €4K p.a. short of the 'comfortable' figure.
Because deductions are so low at this level, you'd need not much more than an extra gross €4k p.a. pension to get you to that.
And if that doesn't sound like much, another poster described his parents, who have €52k net pa in pensions as being unable to spend it all.

You say you're half way through your mortgage so presumably that will be paid off by retirement.
€500 a month in a prsa with a real growth rate of 4% would amount to €144,773 after 17 years when you'd be 66 ().
Assuming your fund continued to earn returns of 4% during retirement then if you were happy to bet on not living
past age 91 you could pay yourself €758.46 a month (9k p.a.) for 25 years
Then the 2 full contributory pensions plus your wife's €11K pension, plus your €9k pension gets to to €48.9 gross which would be €47k net p.a.
I think €3.9k a month in your hand with no kids or mortgage sounds like plenty. Currently you probably have €5.5k a month but with all those other expenses.
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I couldn't post in the other forum for some reason, but thanks a lot for that response. That's very reassuring to be honest. Hopefully the contributory pensions will still be at the same level. We have a child with a disability and would be expecting them to be living with us as an adult too.

Yes the mortgage is a 26 year one that takes me to 65, my wife 62. We're ten years into it now, have less than half the capital to go. We bought in 2014 so were lucky there.

Re: the BTC, I got in relatively early so it's pretty much all a bonus. Cost about 15k in total. I know exactly how volatile it is, it's not for the risk-averse. My wife is happy enough to hang onto it. I've considered selling it and putting the proceeds into my pension but I'll hang on for another cycle at least, it seems to be just going from strength to strength. I don't have (or have faith in) any other cryptos.
 
speedtomyside said:
Re: the BTC, I got in relatively early so it's pretty much all a bonus.
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That’s the wrong attitude. You should compare €71k of BTC with every other possible asset today. It’s irrelevant how you got here. Right now it looks like 20% of your household wealth is in an asset that could collapse to zero in a month. You’re not rich enough to take that risk.

It’s bonkers to have so much funds in crypto but not to be maxing out tax-relieved pension contributions.

Apologies if this is too blunt. If you really think crypto is headed for the moon reduce your exposure to €10k. You’ll still profit from upside and if it all goes to hell you won’t have lost too much.
 
speedtomyside said:
I couldn't post in the other forum for some reason, but thanks a lot for that response. That's very reassuring to be honest. Hopefully the contributory pensions will still be at the same level. We have a child with a disability and would be expecting them to be living with us as an adult too.
Click to expand...
I'd stress that I'm just someone who's only taking an interest in this stuff lately as retirement looms closer for me.
So don't rely on anything I say, it's just my opinion fwiw, there are a lot of people here a lot more knowledgeable than me.


speedtomyside said:
Yes the mortgage is a 26 year one that takes me to 65, my wife 62. We're ten years into it now, have less than half the capital to go. We bought in 2014 so were lucky there.
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That sounds ahead of schedule, like as though you're paying off capital in addition to the normal repayments.
If that is so I wouldn't know if it's wiser to do that or put it into a pension.
Either way I'd just say that you guys sound pretty frugal and responsible to me.
To be doing that as well as paying into extra pensions and bonds, all with kids at home to pay for.
You sound more mature than I was at that age, which isn't saying much though.
 
Don’t worry, I don’t mind the bluntness!

I know it seems crazy to hang on to it without a pension in place but since the start of the year and the introduction of Bitcoin ETFs I don’t see Bitcoin going below $20k again. That would be an 80% drop but it’s more stable than it has ever been. It’s being taken seriously by large institutions and even governments. American state pension funds are buying it (ironically enough).

For the next 15 or 16 years I will be directing as much of my income as possible into the PRSA though. I really regret leaving it so late. I was all set to start one in 2020 but then covid hit my income hard for a couple of years.
 
The question you should ask yourself is this.

If the following applied to you:
1) I have no pension
2) I have a mortgage on my home
3) I have 3 kids
4) I have no crypto

Would you borrow €71k to invest in BTC?

You were an early mover in this Ponzi scheme. You have done very well. Take your profits. Pay down the mortgage or up your pension.
 
speedtomyside said:
Its being taken seriously by large institutions and even governments
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It is but in the opposite way than you think.

Governments are realising that it is heavily used by international organised crime groups. I don’t see crypto ever becoming easier to hold or use.

For example the ECB hasn’t printed the €500 note since 2014 as its main use is criminal. Likewise to my knowledge Irish banks remove €100 and €200 notes from circulation for the same reason.
 
Dr Strangelove said:
For example the ECB hasn’t printed the €500 note since 2014 as its main use is criminal. Likewise to my knowledge Irish banks remove €100 and €200 notes from circulation for the same reason.
Click to expand...

I have to say that I don't accept that justification, nor am I certain that there is evidence to support the claim.
It strikes me as another step in the seemingly inexorable path to total surveillance, allegedly for our own benefit.
A Bank of England £20 banknote in 1960 would be the equivalent of a £577 banknote today yet they never felt the need to remove those from circulation then.
 
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speedtomyside said:
Hi all just looking for any advice people might have.

For context, am 49m married with 3 kids. I was financially irresponsible for most f my adult life but am now attempting to get some sort of future together.

I have no pension but am starting a PRSA in January.

House is 50% paid off

We have €80k in State Savings, maturing in next five years (kids college fund realistically)
25k in HYSA (Emergency fund)
0.76 BTC (currently worth €71k)
ETFs/stocks - €5k (just starting off on this)
Wife has a work pension which will give her approx 11k a year, and has just started a private pension too.

Household income is €80k (not likely to change)
We drive two old cars and shop in Aldi. Just spend money on kids/essentials really.

I’d like to keep the BTC as I see it appreciating over the next five/ten years.
I’ll be putting approx €500 per month into the PRSA and at 66 I’ll qualify for the contributory pension (currently €270 or so). Is there anything you good people would suggest I do, or do differently?

I know we're in an ok position compared to a lot of people but (especially after reading about other peoples' pension pots) I can't help thinking we're screwed!
Click to expand...

You could consider maximizing your pension contributations before DIY investing into an ETF. Maybe 500 eur month is your 25% cap but we don't have the exact figures.

Your pension contributions come with tax relief, meaning you pay less tax, your money is allowed to grow and compound tax free (unlike ETFs) and you can withdraw 25% tax free at drawdown time (also unlike ETFs). Your PRSA will likely have an option to pay into the exact same passive index as your ETF, only in a far more tax efficient manner that also makes your life easier because you won't need to track the investments for revenue.

You should also consider if you want a default lifestyle pension which will gradually move you into bonds or a more aggressive 100% equities pension. At age 49 I'm guessing you would have around 30% in bonds under a default lifestyle setup with an additional 2% or 3% moving into bonds each year.

I am not a bitcoin enjoyer but some people are passionate on the subject. All I will say is that 71k will go a long way towards kick starting your pension fund esp compounding tax free for 15+ years.

You might find this video interesting. UK based but it discusses more realistic models of pension saving especially starting later in life after raising a family.

 
jimmij said:
I'd stress that I'm just someone who's only taking an interest in this stuff lately as retirement looms closer for me.
So don't rely on anything I say, it's just my opinion fwiw, there are a lot of people here a lot more knowledgeable than me.



That sounds ahead of schedule, like as though you're paying off capital in addition to the normal repayments.
If that is so I wouldn't know if it's wiser to do that or put it into a pension.
Either way I'd just say that you guys sound pretty frugal and responsible to me.
To be doing that as well as paying into extra pensions and bonds, all with kids at home to pay for.
You sound more mature than I was at that age, which isn't saying much though.
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I appreciate the effort you went to! The calculations seem 'legit'. Thanks, it was the kids arrival (starting 13 years ago) that gave me the financial wakeup call I needed. My wife's always been pretty good with money so I picked up some good habits from her too. Just never prioritised the pension I suppose, too busy!

I was wrong about the capital remaining actually. We owe somewhere between 45-50% of the original value of the house, not the mortgage. We paid a 25% downpayment when we bought it.
Brendan Burgess said:
The question you should ask yourself is this.

If the following applied to you:
1) I have no pension
2) I have a mortgage on my home
3) I have 3 kids
4) I have no crypto

Would you borrow €71k to invest in BTC?

You were an early mover in this Ponzi scheme. You have done very well. Take your profits. Pay down the mortgage or up your pension.
Click to expand...
Not sure I get ya Brendan. I wouldn't borrow €71k for anything other than a roof over our heads, I'm not one for borrowing at all. I drive a 2012 car. We saved up a 25% deposit to get a better rate.

After 7 years in the Bitcoin game I really don't think it's a Ponzi scheme. I've seen multiple crashes and bad actors/manipulators come and go and it STILL comes back stronger again and again. It's a new asset, with a rock solid network/ledger that anyone can check, gaining adoption over time. But I know it's still probably heresy to most people! 99% of the crypto that came in its wake is a scam, I'll give you that, but Bitcoin is a great invention.

PS Sorry, I have to wait about two hours between each post due to some error on this website.
Thanks theObserver , you're right, the ETFs aren't a great idea really when I could avoid CGT and deemed disposal with the PRSA.
 
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speedtomyside said:
Not sure I get ya Brendan. I wouldn't borrow €71k for anything other than a roof over our heads, I'm not one for borrowing at all. I drive a 2012 car. We saved up a 25% deposit to get a better rate.
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You currently have a mortgage and €71k in bitcoin. You could sell the bitcoin and use the net proceeds to pay down your mortgage. As you aren't doing this, you are effectively borrowing to invest in bitcoin.
 
speedtomyside said:
Not sure I get ya Brendan. I wouldn't borrow €71k for anything other than a roof over our heads, I'm not one for borrowing at all. I drive a 2012 car. We saved up a 25% deposit to get a better rate.
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If your 50% outstanding mortgage (as I said before, it's difficult to comment properly in the absence of such details) is more than €71K then that's basically what you're doing - borrowing to invest on a leveraged basis in Bitcoin.

Since you are clear in saying that you wouldn't borrow other than to provide your family with a place to live then you should almost certainly liquidate the BTC and use the proceeds to pay down your mortgage or, depending on the figures, boost your pension. This is what @Brendan Burgess has already suggested.

Holding onto the BTC in the hope that it continues to increase in value is pure speculation.

I still think that you should do a proper Money Makeover post as there may be key details/figures missing that would influence what might be appropriate feedback.
 
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I didn’t suddenly wake up to find I had €71k in Bitcoin. If I had sold it when it was worth 20k, 40k, 60k and I put it into a 4% interest mortgage I’d be kicking myself right now. The mortgage is being taken care of by inflation, I don’t worry about it. We have steady income and the house is worth a lot more than we paid for it. It’s also protected by an insurance policy in case anything happens to one of us.

Also I don’t really want to pay the CGT yet. It would be around €17k. I’ll wait and see what happens. Why sell an appreciating asset? I might never cash it in and just leave it to the kids as if it were jewellery. It’s proven a good hedge against inflation and store of value so far, I don’t see it dropping to my cost price and if it does, it’ll most likely bounce back again.
 
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speedtomyside said:
Why sell an appreciating asset? I might never cash it in and just leave it to the kids as if it were jewellery. It’s proven a good hedge against inflation and store of value so far, I don’t see it dropping to my cost price and if it does, it’ll most likely bounce back again.
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What was your objective in buying it originally?
 
speedtomyside said:
I didn’t suddenly wake up to find I had €71k in Bitcoin. If I had sold it when it was worth 20k, 40k, 60k and I put it into a 4% interest mortgage I’d be kicking myself right now. The mortgage is being taken care of by inflation, I don’t worry about it. We have steady income and the house is worth a lot more than we paid for it. It’s also protected by an insurance policy in case anything happens to one of us.

Also I don’t really want to pay the CGT yet. It would be around €17k. I’ll wait and see what happens. Why sell an appreciating asset? I might never cash it in and just leave it to the kids as if it were jewellery. It’s proven a good hedge against inflation and store of value so far, I don’t see it dropping to my cost price and if it does, it’ll most likely bounce back again.
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I'd suggest selling the Bitcoin, paying the CGT, taking out the €15k you put into it and then reinvesting the balance of €40k back into Bitcoin. That eliminates the possibility of losing anything on the deal, retains the option of benefiting from future increases in value, and gives you €15k to use elsewhere.

If you didn't have the obviously strong emotional attachment to it I'd suggest dumping the Bitcoin altogether. You've gotten lucky, but Bitcoin is entirely speculative with no underlying value. It produces nothing and therefore is worth nothing. (Although I understand the underlying blockchain technology is quite useful).

You've relatively high savings but relatively low household income. You've also a relatively low equity in your home for your age.

I'd dump your savings (except the emergency fund) entirely into the mortgage, and overpay the mortgage rather than saving. Not having a mortgage payment is probably worth €1k a month (or more) to you, so clearing that will give you a lot of options.

I'd also up the pension contributions if you can.
 
You've got 40% of your non PPR/pension net worth in Bitcoin, a purely speculative and extremely risky and volatile "asset". That's simply irresponsible. You're gambling with a huge chunk of your net worth. The fact that there's effective consensus on this in the comments so far should tell you something. But if you're insistent on rebutting and ignoring such feedback after soliciting it in the first place then that's your prerogative.
 
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