Auto Enrolment Update

May 16, 2024

An article in The Irish Times recently stated that company directors who are not paying into a payroll-deducted company pension scheme will be auto-enrolled into the government scheme in the New Year.

The simple way to avoid this is to set up a company pension scheme and payroll deduction for yourself through your company.

If you’re paying 40% tax, then you can avoid this, and it will be more advantageous.

Other developments have been that employees who pay into a payroll-deducted pension scheme will not qualify for auto-enrolment, even if there isn’t an employer contribution to the scheme.

Having spoken to both employees and employers about this, employees are more than happy to stop paying into the company pension scheme and to start to pay into an auto-enrolment scheme.

To avoid the duplication of the schemes, the additional work employers have agreed to just pay the employer contribution into the existing scheme.

It’s also prompted a review of the existing scheme to determine whether it is currently the best value for employees.

If Auto Enrolment is something you’re thinking about and you feel you need some answers, feel free to get in touch and start a conversation💬

94 articles

Preparing for Retirement

May 7, 2024

If you’re in your 50s and you want to retire in your 60s, now’s the time to start planning – Here are some action points that you can take:

The first is to clarify what income you want in retirement. It’s pretty straightforward. Most people don’t want to change their lifestyle, so it’s their current income.

If all goes well, that’s less any mortgage loans and possible education costs. Once you have that, you now need to know how you will generate it.

So you’ve got to consider private pensions and what they’ll yield for you in retirement, and you need to get some clarity on eligibility for the state pension.

After that, there could be other assets, such as savings and investments and the income they might yield from rental property and the business proceeds.

Then you match the two up, and you’ll see if there’s any shortfall.

If there is a shortfall, you’ll need to look at funding for retirement. The most efficient way to do so is through your pension because of the tax relief.

Other considerations are whether loans need to be paid off, potential education costs, potential gifts to children, tax on lump sums from pensions can be sold, or the money can be ringfenced towards that.

If this is something you’re thinking about and you feel you need some answers, feel free to get in touch and start a conversation💬

Investing & Geopolitical Conflict

April 23, 2024

Many individuals with investments and pensions will experience unforeseen events, such as wars or pandemics during the investment term, that will cause volatility and typically a drop off in valuation.

Initial reactions, typically sparked by media headlines, can be to cash out of the investment or move to something safer.

Before you do it, I recommend talking to an advisor and understanding the context of past performance.

As an example, historically speaking, conflict in the investment markets has been resilient, and that’s not to say that returns didn’t turn negative but if you stuck with it, you got recovery evaluation and a positive return thereafter.

It’s worth looking at your time frame, if you want to draw money in 20 years, there isn’t much point in making a move for short-term volatility.

If you’re going to draw money down sooner, you may need to review that, after valuations have recovered.

It’s worth looking at the level of volatility, if you felt it was too high, maybe you can go to something that’s low risk, albeit there might be a lower return with it.

If you have any queries or need to understand volatility in your investments feel free to get in touch to start a conversation💬

Understanding the Inflation Deficit on your savings account

April 10, 2024

Last week I shared an article that highlighted there is €150 Billion on deposit in Ireland, at the moment with the average deposit rate being 0.12%

In 2023, inflation in Ireland was 5.2%, which is a differential of 5%.

Between what you’re savings and deposits savings are growing by, that’s an inflation deficit of 5%.

Investing is the only way to ensure your money isn’t falling behind.

Some money on deposit has to be kept aside for an emergency, and some money has to be kept aside for anything that’ll be bought, possibly in the next 5 years, but anything past that is suitable for investment

Whether it’s long-term deposits, a cap and secure bond, or a managed fund, If you are investing, speak with a professional and ensure you fully understand the risk of return and the terms and conditions.

If you have any queries or need to understand your investment options feel free to get in touch to start a conversation💬

Financial Planning In Uncertain Times

March 7, 2024

I shared a quote during the week reading, “May you live in interesting times”.

The irony is, that interesting times are troubling times.

Now, in all times, particularly in troubling times, you should have financial resilience and that is the ability to cope with adversity or unforeseen circumstances from a financial point of view.

To start with, you should have an emergency fund in place.

That is cash on short notice if you need to draw on it to repair a property or a vehicle or it could be in the event of a redundancy.

After that, it’s having adequate insurance in place.

So, in the worst case scenario, it’s life insurance or if there’s illness, it’s illness cover to protect a business or a home, against any sort of financial pressure.

From the point of view of pensions and investments, it’s diversifying your holdings, so that if there is an increase in interest rates or possibly a slowdown in the economy.

If there’s a particular asset or sector that’s put under pressure, it’s so you’re not completely exposed to that.

Then lastly, it’s trying to pay down debt as quickly as possible.

Typically, that’s chipping away, it’s not necessarily one lump sum payment.

Again, if you see increasing interest rates or a slowing economy, a high level of debt can put pressure on things quite quickly.

If you have any queries or need to understand how your financial resilience may affect your financial planning feel free to get in touch to start a conversation💬

Is Inflation still a concern?

February 27, 2024

Has the worst of inflation passed and is inflation still a concern or consideration?

These are two very different questions and from a financial planning point of view, inflation is always a concern or certainly a consideration even in more normal levels of inflation i.e If you’re seeking to retire in 10 years time or you’re looking to draw money down after saving up for something for 10 years.

If inflation is 2% (Not factoring in compounding) there should be a price increase of 20%, across goods and services, cost of living for retirement, or maybe if you’re saving up for something – So that needs to be factored into your financial planning.

Are we through the worst of inflation? It looks like we are. There still are risks that have been highlighted by the European Central Bank.

That is an increase in wages, which means there’s more money, so there’s more of a demand for products which can be inflationary.

The supply chain disruptions from geopolitical conflict mean the potential shortage of some goods and the potential increase in the price of oil, are both inflationary.

It does look like we are through the worst of inflation, but there might be a couple of spikes ahead, but certainly, from a financial planning point of view it always needs to be factored in.

If you have any queries about how inflation may affect your financial planning feel free to get in touch to start a conversation💬

Financial Planning During Uncertain Times

November 20, 2023

There’s a lot of uncertainty around at the moment and it’s in relation to inflation or how quickly that might subside. 

Interest rates might subside or stay high as the case might be and there will be an impact on economic growth and also the geopolitical conflict of wars that we’re experiencing at the moment. 

So the only certainty that you do have is planning, and it’s financial planning,  this is mapping out your financial future and it’s taking account of what’s happening at the moment and making provisions for them.

This requires you to have an emergency fund in place, so if there’s an unforeseen expense, or perhaps a redundancy, it’s making sure you have money for that. 

If things are worse again, it’s reviewing your life and illness policies to make sure that you have adequate coverage. 

It’s looking at your pensions and investments and making sure that you’re well diversified. 

If there is a recession, maybe some areas might be affected more than others and it’s just not to avoid an exposure to one of those. 

Really it’s taking a long-term view because we don’t know what will happen in the immediate term, but we do know what equities the long-term trend is up.

If you are a short or long-term investor and need advice or assistance on inflation or interest rates affecting you, feel free to get in touch, and let’s start a conversation! 

Inflation and Your Money

November 14, 2023

Inflation is at 6% in Ireland at the moment, having peaked last year during the summer at 9.5%, and it’s forecast to reduce to just over 3% next year. 

I believe the worst of the inflation is behind us and I expect to see a couple of spikes over the next 12 or 18 months.

The reason for that is the conflict in the Middle East, which has, historically speaking, increased oil prices and reduced the supply of food and minerals from Ukraine.

I believe we’ll see a spike in inflation, so it’s something to factor into investment decisions and financial planning decisions for the near term. 

Historically speaking, high interest rates have taken approximately 24 months to fully curtail inflation so we’re probably still in the middle of that too.

If you are a short or long-term investor and need advice or assistance on inflation, feel free to get in touch, and let’s start a conversation!

Recessions and how they impact your pension funds

November 6, 2023

Economic recession is something that’s re-entered conversations with clients this year. 

So in Ireland, we had a brief recession at the start of the year, which we have exited. 

Simply put, when a recession happens company revenues are down and that means their valuations reduce and across the board, that’ll mean a drop in the stock markets.

The below graph shows recessions and equity market performance – The context shows the long-term positive trend but the drops are not pleasant!

From the point of view of pension funds and investment funds, the most influential market is the US market – It’s the largest economy in the world and it’s the largest stock market in the world. 

Historically speaking, stock markets drop in the first 6 months of a recession, they rebound after that and typically will recover well ahead of the economy.

Drop-offs can be sharp, they can be approximately 20 to 30%, but it is temporary. 

For long-term investors, it’s something that needs to ride out the storm as such and maybe you can avail of lower valuations if possible.

If you are a short or long-term investor and need advice or assistance on your journey, feel free to get in touch, and let’s start a conversation today!

How much Income do you need in Retirement

October 9, 2023

How much income do I need in retirement, is a question that I get asked quite a bit.

When I was talking to a client, she had a conversation with a few friends about that and their view was that ultimately they didn’t want to spend any less in retirement than they were spending now.

They had their hobbies, their lifestyles and holidays that they liked and they wanted to continue that into retirement.

The industry would say 75% of your income should be enough to maintain your current lifestyle.

I think 75% of your income close to retirement will be enough but I think it’s a calculation that’s on a case-by-case basis.

You need to look at how much your lifestyle costs and you need to look at what your retirement income will be – What your retirement income will be and what it is projected to be.

Watch my full video HERE

If you need help understanding your retirement income feel free to get in touch for actionable advice backed up by experience!