When Can We Retire


Tom (55) and Ger (53) are married with three children who are all in full time employment.  The youngest is leaving home.  Their middle daughter is getting married next year and they have promised €20,000 to go towards a deposit for a house.  They are 50/50 shareholders in ABC Ltd.  Their children have no interest in the company and Tom and Ger are considering their exit strategy from the business.  They currently feel they will need to work into their 70’s, they do not think they will be able to sell the business.  They have built up shareholder funds of €400,000.    

We have outlined their summary balance sheet and income versus expenditure below.  Their investment and pension strategy has been haphazard to date.  The company makes a pension contribution of 30k per annum for them both. They both expect to qualify for the full state pension from age 68 and they have sufficient life cover, serious illness and income protection to support their lifestyle in event of catastrophe. 





The blue above denotes positive cash flow whilst the red is negative.  The black line in the chart above denotes cost of living and any blue above the black line indicates surplus income.  Based on the client’s current position they will run out of liquid cash by the time Tom reaches age 87.  We note that they are just about living within their means which leaves little scope for additional saving to enhance their income or assets in retirement.

Our initial findings are as follows:

  • With no forward planning we estimate Tom and Ger need to work until they are 70.
  • We recommend they put their investments in joint names and implement a portfolio approach in context of their personal risk profile and objectives.
  • We recommend rebalancing their existing pension assets also applying a portfolio approach in line with their risk profile and objectives
  • Tax advice is required to determine if they potentially qualify for retirement relief on the disposal or liquidation of the company.
  • If retirement relief is a viable option, we recommend they cease the employer pension contribution with a view to enhancing the cash balance sheet. Ultimately they could extract these monies from the company tax free.
  • If retirement relief is not available, we recommend they consider maximising their pension funding scope within the Revenue guidelines, cash flow permitting.
  • We recommend ongoing analysis of expenditures to ensure their accuracy and to achieve any efficiencies going forward.


Assuming that Tom retires now at age 65 and that they qualify for retirement relief, the chart below illustrates a positive cash flow position extended to age 94 by employing the following strategies:

  1. Ceased employer sponsored pension contributions.
  2. All surplus personal income above the black line is redirected to their pension by way of an employee contribution.
  3. Implemented an investment strategy for both pension and investment assets targeting a long term rate of return of 4.5%
  4. Assumed a long term cash rate of 1.5% for all savings held in cash.

We recommend ongoing monitoring to ensure the plan remains on track.

The charts do not include the option to downsize their home at a later stage which remains an option. Nor does it factor potential later life costs however this area will reviewed in the coming years as our clients get older.

Wealth Alliance Limited is registered in Ireland.
Wealth Alliance Ltd is regulated by the Central Bank of Ireland C120055.
Directors: Brenda Rogan & Jane McAleese.