Who would pay my mortgage if I died?
Protecting your home is one of the most important things you can do. If you have a mortgage, chances are your repayments take up a sizable chunk of your monthly income. Who would pay this if you died? If you have a mortgage with a partner, could either of you afford to pay your entire mortgage in the event of an unexpected death?
For the reasons outlined above, Mortgage Life Insurance - also known as Mortgage Protection is usually a requirement of getting a mortgage. However, because mortgages tend to be very long term arrangements, it can often get overlooked or forgotten about.
Why should I buy Income Protection?
If you had to give up work due to illness or injury, you would still have to pay your regular bills, such as mortgage and loan repayments and household expenses.
However, you might also have the additional financial burden of extra medical costs, so your total amount of bills could increase. With this in mind, could you maintain your current standard of living while you were out of work? If the answer is no, income protection can help.
What is an Annuity?
An annuity is what many people commonly refer to as a pension. The most common option at retirement is to use your accumulated pension fund to buy an annuity from an insurance company.
This is a guaranteed income for the rest of your life. The amount of income you receive will be based on, among other things, your life expectancy at retirement - so will vary by retirement age - and the size of your retirement fund!
Unlike a tax-free lump sum, you pay income tax on income from an annuity.
Could you retire on €12,000 per year?
The state pension (non-contributory) in Ireland is set out below.* Could you get by with that level of income? Consider your current living costs; rent/mortgage, food, electricity, heat, etc.
|State Pension (Contributory)||Rate per week (maximum)|
|Personal rate, aged 66 and under 80*||€230.30|
|Personal rate, aged 80+||€240.30|
*If you were born on or after 1 January 1955 the minimum qualifying State pension age will be 67. If you were born on or after 1 January 1961 the minimum qualifying State pension age will be 68
By the time you retire some things like your mortgage may no longer be an issue, but there are things that are likely to increase in old age as such as medical bills. Planning for your retirement can help give you peace of mind.
Your target income
Deciding your target income really depends on what kind of lifestyle you hope to have during your retirement. As a general rule, it is recommended that you aim to have an annual income at retirement of 66% of your final salary. This should provide you with a good standard of living when you retire.
I want to get the most from my investments
We work hard to develop investment products that aim to deliver long-term returns for our customers. But getting the most from your investments isn't just about picking the best provider.
Keep an emergency fund
Before investing capital we recommend that you should always have some emergency money that is immediately accessible to you, preferably in a demand deposit account.
You should also think about your short, medium and long term commitments before considering any amount to be invested.
Cleere Life & Pensions have a proactive approach to their work and, after each visit, they later follow up and forward a very detailed report explaining the current situation.
John & Michelle, Investment Client
Contact Cleerelife & Pensions