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Advice on what to do.

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  • 05-11-2008 8:15pm
    #1
    williambonney
    Closed Accounts Posts: 111 ✭✭


    Hypothetical question to people who know a bit about money and finance etc. Scenario, man late 50’s job gone but between redundancy and savings he has about €250,000. he doesn’t have a mortgage and does not owe anyone a cent. This guy is not a member of the professions, spent all his life as a factory worker, albeit a well paid one. What in the present economic climate are his best options? Oh yes, he is married, but no dependant children, wife doesn’t work. I would be interested in all comments and observations, especially from people who know what they are talking about.
    Regards
    William.


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    #2
    SoCal90046
    Closed Accounts Posts: 192 ✭✭SoCal90046


    Frankly, I think the following old phrase should guide you about financial advice on the Internet: the people who know don't talk and the people who talk don't know.


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    #3
    Time Magazine
    Registered Users Posts: 8,452 ✭✭✭Time Magazine


    Sent from Economics to (what I think) is the best forum.


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    #4
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    williambonney wrote: »
    Hypothetical question to people who know a bit about money and finance etc. Scenario, man late 50’s job gone but between redundancy and savings he has about €250,000. he doesn’t have a mortgage and does not owe anyone a cent. This guy is not a member of the professions, spent all his life as a factory worker, albeit a well paid one. What in the present economic climate are his best options? Oh yes, he is married, but no dependant children, wife doesn’t work. I would be interested in all comments and observations, especially from people who know what they are talking about.
    Regards
    William.

    You haven't provided enough information for anyone to be able to provide an opinion or give suggestions e.g. the persons attitude to risk. This is just one big issue, there is much much more to consider.

    My thoughts? Go sit down and talk with someone, or try a few different "someones" until the right package is achieved.

    If you want to research on the internet before you go then look at products from different institutions to get a feeling for what is out there rather than looking for advice (possibly bad advice).

    Big question............does this person have a sufficient pension? This would be a big thing to look at first.


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    #5
    williambonney
    Closed Accounts Posts: 111 ✭✭williambonney


    IsThatSo? wrote: »
    You haven't provided enough information for anyone to be able to provide an opinion or give suggestions e.g. the persons attitude to risk. This is just one big issue, there is much much more to consider.

    My thoughts? Go sit down and talk with someone, or try a few different "someones" until the right package is achieved.

    If you want to research on the internet before you go then look at products from different institutions to get a feeling for what is out there rather than looking for advice (possibly bad advice).

    Big question............does this person have a sufficient pension? This would be a big thing to look at first.

    He will have a reasonably decent occupational pension, but not until he is 65. He is 58 now


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    #6
    sofireland
    Registered Users Posts: 1,245 ✭✭✭sofireland


    Seek professional advice is the best advice that individual can do


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    #7
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    sofireland wrote: »
    Seek professional advice is the best advice that individual can do

    +1 on this, its the only way to go.

    Re pension question, that was really just another example of an important area to take into consideration. Any professional worth their salt will investigate this to make sure that your friend has sufficient for retirement :)


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    #8
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    williambonney wrote: »
    Hypothetical question to people who know a bit about money and finance etc. Scenario, man late 50’s job gone but between redundancy and savings he has about €250,000. he doesn’t have a mortgage and does not owe anyone a cent. This guy is not a member of the professions, spent all his life as a factory worker, albeit a well paid one. What in the present economic climate are his best options? Oh yes, he is married, but no dependant children, wife doesn’t work. I would be interested in all comments and observations, especially from people who know what they are talking about.
    Regards
    William.

    Lets look at it this way. The chap is 58. 7 - 8 more years until retirement. Has a pension & 250k in savings. Good start.

    I think his best option would be to go and get retrained for alternative employment. He has the money to do it and considering that he is 7-8yrs away from retirement it would be tax efficent to restart contributions to a pension as threshold levels are higher the older you get - http://www.revenue.ie/leaflets/it14.pdf.

    Of course it's all dependent on him getting a job. The money on deposit (assuming a rate of 5%) would give him at least 10k in income without eating into the capital. Once he hits 65 he can claim DIRT Tax relief provided his income is less than 40k (married threshold, 20k for single people over 65) - http://www.revenue.ie/index.htm?/leaflets/it1.htm#section2. And of course he should be entitled to the old age pension and have his other pension as well.


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    #9
    kaiser sauze
    Registered Users Posts: 1,558 ✭✭✭kaiser sauze


    stepbar wrote: »
    Lets look at it this way. The chap is 58. 7 - 8 more years until retirement. Has a pension & 250k in savings. Good start.

    I think his best option would be to go and get retrained for alternative employment. He has the money to do it and considering that he is 7-8yrs away from retirement it would be tax efficent to restart contributions to a pension as threshold levels are higher the older you get - http://www.revenue.ie/leaflets/it14.pdf.

    Of course it's all dependent on him getting a job. The money on deposit (assuming a rate of 5%) would give him at least 10k in income without eating into the capital. Once he hits 65 he can claim DIRT Tax relief provided his income is less than 40k (married threshold, 20k for single people over 65) - http://www.revenue.ie/index.htm?/leaflets/it1.htm#section2. And of course he should be entitled to the old age pension and have his other pension as well.

    As long as this retraining is at cost to the new prospective employer, I'd agree. If this is at your friend's cost, no way. At this late stage in his career it would be a silly waste.

    I agree with making contributions to an AVC, however, if he is fully funded, that might also be unnecessary. It depends on his expectations and requirements for a retirement income.

    If access to the money is important then an investment in a deposit account with a 5-10 year horizon is best. With many of these vehicles, charges will apply if access is required within the timeframe, so that needs to be kept in mind.

    Above all, get professional, independent advice.


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