Where to put savings

K

Kerry538

Registered User
Messages
13
Personal details

Your age: 53
Your spouse's age: 56

Number and age of children: 1 who is 22


Income and expenditure
Annual gross income from employment or profession: €20,000
Annual gross income of spouse/partner: €70000

Joint Monthly take-home pay: €5700

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

Pension (13% + 4% employer + employee contributions for spouses income

Summary of Assets and Liabilities
Family home value: €450k
Mortgage on family home: 0
Net equity: €450k

Cash in credit union: €14500
Bank notice savings account: €40000



pension fund: €500k
Aus superannuation : €31k
UK Pension: Full in 2037 for spouse -


No other borrowings.

Do you pay off your full credit card balance each month? Paid off in full monthly

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

1) I am seriously ill. We would like my husband to be able to retire early . How could we work towards this and perhaps make these savings in our credit union and savings account work better for us. We have maxed out the pension fund.

2) Our son is 22 and also has €15k in a credit union account. How could he make it work better for him and what account could he set up or fund to setup a monthly saving amount to.

Thank you so much
 
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Are you sure your spouse is maxing out his pension? He can put 35 per cent of his wage on top of employer contribution. (Your take home pay seems to me a bit high for the full contributions to be made)
 
Premos said:
Are you sure your spouse is maxing out his pension? He can put 35 per cent of his wage on top of employer contribution. (Your take home pay seems to me a bit high for the full contributions to be made)
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Hi,
We put in an extra €25k into it this year to max it out. He has contacted his work to increase his contributions as well.
Thank you
 
1) It seems like maxing the pension fund contributions every year is the best way to invest long-term for your husband.
2)This is also the way to help him to retire early.

However, if you are seriously, ill there might be some advantage in having the cash available in case you need it for medical treatment.

Might he want to take a career break for a few years and then return to work? Again, having the cash available to allow him to afford to do that might trump everything else.

Is your illness terminal? Do you have life insurance on your life so that if you die, will he get a lump sum payment?
 
If your illness is terminal, it might make sense for you to buy shares directly in your name. The advantage of this is that any gains will not be taxable when you die as death is not a disposal for CGT. If you invest in a unit-linked fund, then the gains would be taxed as normal.
 
Hi Brendan
It is not terminal as such. But extremely serious. I have never been able to get life insurance in Ireland. There is a policy attached to my superannuation in Australia. The next few years will be very hard.

If we put money into his pension policies we will not be able to access those until he is 66/67. I have always wanted to look at purchasing shares but it is an unknown area to me. So I am scared that I would end up throwing it all away. I will start by putting time into and trying to understand it better.

Thank you very much
 
Hi Kerry

I am trying to understand the implications of your illness?

Will you be able to continue working and earning? Will you have to retire early?
Will he want to take time off to mind you or travel with you while you are well enough to travel?
Will he want to retire if you stop working due to illness?

Brendan
 
Brendan Burgess said:
Hi Kerry

I am trying to understand the implications of your illness?

Will you be able to continue working and earning? Will you have to retire early?
Will he want to take time off to mind you or travel with you while you are well enough to travel?
Will he want to retire if you stop working due to illness?

Brendan
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Hi

Will you be able to continue working and earning? No

Will you have to retire early? I Have already

Will he want to take time off to mind you or travel with you while you are well enough to travel? Yes and may be donating a kidney to me. Travelling will not be on the horizon for the near future.

Will he want to retire if you stop working due to illness? Not yet but if he could in a few years it would be great. I am on dialysis presently with several other Co morbidities.

Thank you
 
As there are so many future unknowns, it's very difficult to know what to do.

Maxing the pension increases his chances of retiring early.
However, it puts the money out of reach until he retires, and he may want it earlier.

My gut feeling is that he should not max his pension contributions but keep the money available for flexibility.

As he gets closer to retirement, he can max his pension fund with a few years to go.

In the meantime, I would invest the €53k in a portfolio of about 5 shares in large companies. I would put them in your sole name, so that if you do die before you need to cash the shares, the CGT will disappear.
 
Brendan Burgess said:
As there are so many future unknowns, it's very difficult to know what to do.

Maxing the pension increases his chances of retiring early.
However, it puts the money out of reach until he retires, and he may want it earlier.

My gut feeling is that he should not max his pension contributions but keep the money available for flexibility.

As he gets closer to retirement, he can max his pension fund with a few years to go.

In the meantime, I would invest the €53k in a portfolio of about 5 shares in large companies. I would put them in your sole name, so that if you do die before you need to cash the shares, the CGT will disappear.
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Brendan thank you so much for this advice and taking the time to understand our situation. It is appreciated beyond words x
 
Best wishes to you with your illness, I’m sure it’s a very tough time, compounded by trying t make sound financial decisions in the midst of such uncertainty. I’d agree with Brendan, buy some shares but do keep cash on hand as a buffer and for maximum flexibility. Important too to set aside a bit to do something nice for yourselves that you can both enjoy and help take your mind off your worries for a bit. Take care.
 
Kerry538 said:
If we put money into his pension policies we will not be able to access those until he is 66/67.
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Depends on the type of pension. Some can be accessed much earlier than that. E.g. I'm in my 50s and am starting to access some of my pension investments (a mix of PRSAs, personal retirement/buy out bond, and paid up personal pension plan - no occupational pensions in case that matters).
 
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ClubMan said:
Depends on the type of pension. Some can be accessed much earlier than that. E.g. I'm in my 50s and am starting to access some of my pension investments (a mix of PRSAs, personal retirement/buy out bond, and paid up personal pension plan - no occupational pensions in case that matters).
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They are all occupational ones. 6 of them and then the state pensions. One which is the superannuation in Oz, can be accessed after 60. All so confusing! Trying to get it all organised.
 
MelF said:
Best wishes to you with your illness, I’m sure it’s a very tough time, compounded by trying t make sound financial decisions in the midst of such uncertainty. I’d agree with Brendan, buy some shares but do keep cash on hand as a buffer and for maximum flexibility. Important too to set aside a bit to do something nice for yourselves that you can both enjoy and help take your mind off your worries for a bit. Take care.
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Thank you so much. X
 
Kerry538 said:
They are all occupational ones. 6 of them and then the state pensions. One which is the superannuation in Oz, can be accessed after 60. All so confusing! Trying to get it all organised.
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For the occupational pensions, the ones relating to earlier employments came be taken from age 50.

For the current employment, the pension can be taken from age 50 if your spouse leaves that employment. Also, it would be worth checking the details of the pension. The pension age could be anything between 60 and 70 (choose by the pension trustees when it was set up). It's not necessarily 66/67.
 
First thing is you need to work out an expenditure plan.

  1. What is on the list of what you want to do and how much will it cost?
  2. How much does it cost to run the household?
  3. How much is personal expenditure
  4. What are motoring costs
  5. Medical bills
On the medical side, if you have a successful kidney transplant, what will life be like afterwards? Will it get back near normal?

As has already been posted already, occupational pensions can be accessed from 50 anyway, so there is no restriction to access. Work PRSAs can be accessed before age 60 if your husband retires. You disclosed that there are 6 plans, so they can all be accessed at different times anyway, you don't have to do them all at once.

What is your husband's employer like? Are they sympathetic to your illness? Will they allow your husband additional unpaid leave during the year to take these trips without him having to leave his job (and the pension scheme). You could use some of the other pensions to fund the trips while he remains a member of the scheme.

I know nothing about the rules around the Oz Super scheme to know about early access to it. Is there an ability to access it early in the situation of ill health?

Do up an expenditure list and then use the different pots of money to fund it like a jigsaw. It may mean maturing a pension or two and using it all up, knowing that you will have the Oz pension to replace it in a few years or another income stream coming onboard at a different time.

I wouldn't look at investing the cash you have, you could spend some of it down on trips and leave some of it for emergency use.

For your son, he needs to start investing and get the markets to do some of the heavy lifting. A regular saver into a world index fund with a life company will be the easiest way to do this.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Steven Barrett said:
First thing is you need to work out an expenditure plan.

  1. What is on the list of what you want to do and how much will it cost?
  2. How much does it cost to run the household?
  3. How much is personal expenditure
  4. What are motoring costs
  5. Medical bills
On the medical side, if you have a successful kidney transplant, what will life be like afterwards? Will it get back near normal?

As has already been posted already, occupational pensions can be accessed from 50 anyway, so there is no restriction to access. Work PRSAs can be accessed before age 60 if your husband retires. You disclosed that there are 6 plans, so they can all be accessed at different times anyway, you don't have to do them all at once.

What is your husband's employer like? Are they sympathetic to your illness? Will they allow your husband additional unpaid leave during the year to take these trips without him having to leave his job (and the pension scheme). You could use some of the other pensions to fund the trips while he remains a member of the scheme.

I know nothing about the rules around the Oz Super scheme to know about early access to it. Is there an ability to access it early in the situation of ill health?

Do up an expenditure list and then use the different pots of money to fund it like a jigsaw. It may mean maturing a pension or two and using it all up, knowing that you will have the Oz pension to replace it in a few years or another income stream coming onboard at a different time.

I wouldn't look at investing the cash you have, you could spend some of it down on trips and leave some of it for emergency use.

For your son, he needs to start investing and get the markets to do some of the heavy lifting. A regular saver into a world index fund with a life company will be the easiest way to do this.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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Thank you so much Steven. His company have been very good and will give him leave if he is a match. The pensions are different drawdown years beginning from 2030. But they wouldn’t be quite enough until a fund in 2033 can be drawn down. We got solar which has minimised our costs and I am a lover of spreadsheets. So I have a very comprehensive list of expenses. My family always laugh at me!

Thank you for your advice regarding our son. I will get him working on that. It is a pity to see money sitting in the credit union earning nothing.

Thank you x
 
Kerry538 said:
Thank you so much Steven. His company have been very good and will give him leave if he is a match. The pensions are different drawdown years beginning from 2030. But they wouldn’t be quite enough until a fund in 2033 can be drawn down. We got solar which has minimised our costs and I am a lover of spreadsheets. So I have a very comprehensive list of expenses. My family always laugh at me!

Thank you for your advice regarding our son. I will get him working on that. It is a pity to see money sitting in the credit union earning nothing.

Thank you x
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When work pensions are being set up, a "normal retirement age" must be given. This can be anything from age 60 to 70. It does not mean you cannot access the money before that age. In the case of pensions from old employers, you can access the pension from age 50.
 
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