Your wife is not happy, and, truth be told, neither are you.
Deep down, you can understand her frustration.
You’re approaching retirement; you have a number of pensions from various jobs, some stocks, some investment properties, a plethora of insurance policies… but no actual plan.
You are missing opportunities where you have money on deposit.
You’re shelling out money on rental properties without any idea of the actual net yield.
You are over insured for your stage in life and your kids are going through an expensive phase as they go through third level.
Your wife’s pension is under-funded because she looked after your children and your home for a large portion of her working life.
But you’ve been lobbing as much money as you can into your self-administered pension because you know it’s tax efficient. You are pretty sure there will be enough in there to cover your lifestyle for you and your wife when you do stop earning.
As sure as those people who had €1 million in their pension funds in 2006 and retired in 2009 on 40% less? €400k just wiped out by the crash.
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Not knowing where or how your pension is invested could cost you your retirement, and that makes your wife feel vulnerable. And it leads to frustrations presenting themselves in your relationship.
If you were to start again, would you do it all the same?
What – just pick up financial products and make investments as and when they are suggested to you? React rather than implement a plan? I suspect you wouldn’t.
The good news is you don’t have to go back 25 years. You can get started right now, whether you go to a financial adviser or not. Do this one thing and you’ll be on the road to having a strategy:
Find out how your retirement money is invested. I mean the granular detail of what kinds of funds your pension is invested in as well as your stocks, property and other sources of income.
This exercise will reveal whether you over exposed to any one company, industry or country or asset class – property for example. In my experience, we are not nearly diversified enough, and that is a recipe for disaster in the event of a crash.
With this knowledge you are ready to put a strategy in place. We’ll talk more about that next time.
But it’ll stop the underlying tension in the interim.