Trying to scramble a retirement together

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Selling Bitcoin in order to buy back Bitcoin sounds insane, sorry. Why crystallise a Capital Gains Tax liability on a disposal you then immediately reverse?
 
T McGibney said:
Selling Bitcoin in order to buy back Bitcoin sounds insane, sorry. Why crystallise a Capital Gains Tax liability on a disposal you then immediately reverse?
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To extract your initial capital and make it an entirely risk free speculation. It's Bitcoin not a rental apartment or the stock market, so very different considerations should be applied to the decision making.
 
bish123 said:
Bit strange - OP starts post which outlined previous risk taking and being irresponsible and yet refused to follow advice given that leads to being responsible !
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Well i did say I wanted to hang on to my precious BTC in my post! I liked jimmij's response that gave me advice without talking about the Bitcoin, and there are definitely lots of valuable viewpoints given here worth considering. I realise it's a divisive issue, and it took me a few years of owning Bitcoin to fully appreciate the potential of it, which we are now seeing in the current value. It wouldnt be still around after 15 years if it was worthless.

To answer poster "Fortune"s question about why I got into it in the first place, I was convinced by an early Bitcoiner over the course of many commutes to work. This was in 2016/7. I had been dismissive of it up til then, having heard only negative stories about the dark web etc, but he made me realise that there’s not much point saving in fiat when your purchasing power is being debased all the time. If we’d put half the State Savings money in Bitcoin we’d be retired already That was for the kids education so obviously there was no way.

I only started buying it with the idea that I might have 1 coin to call my own in the future sometime. I won't get there now but I'm satisfied with the amount I hold and have my head back in the fiat world (somewhat) to concentrate on my retirement as it's coming down the track faster than I would like. Selling the bitcoin and triggering 33% CGT just isn't part of my plans right now.
 
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SquirrelChaser said:
I strongly recommend reading an economics textbook.

And also selling your Enron shares.
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Keynesian or Austrian?

Not sure what a badly run/ corrupt company has to do with a protocol, which is all Bitcoin is at the end of the day. There is no shady foundation trying to scam people. It’s only worth what the market decides it’s worth. I’ve bought it at all sorts of price points as I have conviction about it. I have no issue with volatility, it’s served me well in the long run.
 
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Op regarding your children - what ages are they ? Regarding your child who you believe will live with you during adulthood. This will mean a retirement income to cover their living needs I assume? And are you planning to make further provision for them ir some kind of trust or will you leave more family assets as their inheritance etc. Not to know the details but just some things to consider if you haven't already.
 
Leaving aside the BTC stuff for a moment and going back to your original questions on penions

speedtomyside said:
Household income is €80k (not likely to change)
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speedtomyside said:
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)
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speedtomyside said:
We have around 111k left on a 168k mortgage, (€227k house, 25% downpayment) with the house now valued at at least 300k
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How is your €80k income split? I'm presuming your spouse is a state employee if she has a future DB pension. If you are jointly assessed you shouldn't be paying tax at 40% income tax so you will be saving 20% IT on your contributions.

If you have set this PRSA up by yourself, what are the fees? This may be an unpopular opinion but if you were only getting a 95% contribtion rate and AMC of >1%, I'm not so sure about the value this represents for you. With the IT saving, you are contributing €80 and €93-95 goes into the pension. And you will be paying some level of tax on drawdown eventually.

I don't think that represents enough value to lock away the money and lose access to the capital. That's not to say you shouldn't plan for your pension but that may mean accumualting more outside the pension wrapper or boosting your spouses DB pension with AVC's if that is possible. Even the AE pension (which I know little about) would probably be more beneficial to you than a private PRSA

Leaving aside the specific BTC elements of the argument, you need to at least acknowledge that you are taking fairly huge gamble with this holding. Putting that amount of your wealth into a single asset/investment/bet is generally not wise. All of you arguments to defend your position are gamblers fallacy
speedtomyside said:
I got in relatively early so it's pretty much all a bonus
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No it is not, you literally have ~€52k net of CGT.

speedtomyside said:
f 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.
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Hindsight is wonderful, I can pick any asset or sports event and say 'if only I put €xx into it". Equally if it tanks and doesn't recover you will be kicking yourself

speedtomyside said:
I'll have lost 15 grand if it goes to zero during some black swan like WW3 or a quantum hack. I can live with that.
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No your loss is not limited to €15k. For accounting reasons you would carry a €15k loss for CGT but right now you could cash this in and have €52k net of CGT. That is real money that you have right now but you choose not to take it off the table. You may have started with €15k but your current bet is €52k. If your cash position was €150k today, would you put €50k into a single investment?

speedtomyside said:
I came in good faith but I obviously poked the hornets nest here. A lot of insecurity around the issue of Bitcoin it seems
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I don't care whether you hold BTC or not but the insecurity here is mainly yours. It's been pointed out that you hold too much wealth in one thing which also happens to be very volatile. You've dragged up the belief and faith arguments in BTC to justify your position. If this was a €70k holding in any other single share you would get the very same response.

If you want to take that risk then that is fine but at least acknowledge it. BTC has nothing to do with your own risky financial bet, it is just the medium through which you are taking risk

speedtomyside said:
We have around 111k left on a 168k mortgage, (€227k house, 25% downpayment) with the house now valued at at least 300k
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You have approximately €160k in cash, ETF's and BTC (net), You could be mortgage free tomorrow with €50k leftover. This frees up €800 per month for whatever pension vehicle you choose. That is not a bad place to be for your age and income.

I think you mentioned your eldest is ~13 so you may be looking at 3rd level costs in the next 5-6 years. Being mortgage free now will go a long way to facilitating the extra costs when they are
 
speedtomyside said:
as it’s unlikely we’ll save €80000 in the next 5 years to replace the college fund
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You don’t need a “college fund”,

You simply need to be able to fund your kids through college and having a lower debt to service helps here.

People often suffer from the mental bias of putting their wealth into separate mental or physical accounts and not realising that it’s all part of a big pot.

You are particularly prone to this and it will cost you in the long term.
 
speedtomyside said:
Or should I just take out the €60k and pay it now without interest? I think the interest was 5% on the bond, cant seem to find out how much we get back exactly and whether it works out at more than the interest we'll pay on the mortgage.
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It depends a bit on the interest rate differential. I wouldn’t pay a mortgage at 3.7% but keep savings at 1.7%.

But if it’s 3.0% DIRT free on savings you’re not losing much by holding on and it’s basically insurance against an unexpected life events.

Finally - and I’m signing out for Xmas soon - you and spouse should both consider some level of income protection against serious illness if it’s not provided by your employer. Your household would be in big financial trouble if one of you was unable to work permanently. You get tax relief (although not much) on income protection premiums. €20 a month each would buy a fair bit of cover - prices have come down a good bit since 2022 with rising interest rates.
 
Thanks, she does have income protection alright! I'm self-employed so I've been walking the tightrope for years.

I'll need to find out more on the SS. I think the first batch was 5% and the second was 3%.
 
Because your salary is so low, you don’t have a huge amount of headroom to make pension contributions - 25% of 20-32k per annnum, so only 5-8k a year. I think therefore that the best bang for your buck is in clearing down the mortgage.

Secondly, I would consider solar PV/battery installation if you have the space. You should see a payback period of 7-8 years on a system that should last 25-30 years, ie you’ll be well into your 70’s and it’ll still be going. I recommend this as it’s an inflation hedge. Think of it as an annuity - for about 10k, you could receive approx 1,400 a year in benefit, inflation-adjusted every year and held jointly with your spouse. An annuity of similar size and benefit would cost maybe 35k!

Finally, I don’t know details but I understand carers can purchase vehicles VAT-free. Depending on your driving needs, worth looking at EV’s that would significantly help reduce monthly overheads vs petrol/diesel.

Both of above should help reduce your pension needs in the long term whilst also helping with short-term cash-flow, allowing you to invest/accumulate more.
 
Great ideas there Conor thanks, will look into those. Especially the EV as we do a lot of driving. Physically there are no issues though so it mightn’t apply to us. Will research further!
 
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