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When I’m not at work…I’m singing!

As some of you may know (I tend to mention it from time to time!), one of my favourite things to do in my spare time is sing with my choir.

It’s a well-known fact that group singing is one of the most effective forms of managing your mental health. It can be daunting and challenging but the rewards are worth every bit of the effort.

About 5 years ago I joined the St. Mary’s College Singers and in that time I have been fortunate enough to perform with an amazing group of people in a wide variety of locations for different occasions.

We’ve had the opportunity to showcase our talents in concerts both locally and internationally, with performances in Italy, UK, Portugal, and France.

We regularly participate in official college ceremonies, choral competitions (we’ve been lucky enough to have won a few!), Christmas Carol events and Music Festivals. We’ve also had the privilege of singing at wedding and funeral ceremonies within our extended choir family. We’ve sung in theatres, restaurants, pubs (a lot!), TV studios, shopping centres, airports, open-air events, on stages and under stages.

Christmas is our busiest time of the year, the highlight of which is our annual Peace On Earth concert in Christchurch Cathedral where we raise funds for Aidlink.  We’re also performing in Dun Laoghaire and Dundrum Town Centre so if you hear us come over and drop a few quid in the buckets.

Last year we raised over €30,000 for our chosen charities.

If you would like to support our charities here is a link to the causes we are helping out this year;

Here is a brief sample from this year’s performance in Christchurch.

Which is better Serious Illness or Income Protection?

Introduction

There is no single right answer to this question. As with other areas of financial planning, it depends on your own individual circumstances. What is your occupation, your financial situation, your life stage, do you have dependants and what are your financial goals? These are just some of the questions which can help you answer which product is better for you.

In summary, Income Protection and Serious Illness are both types of insurance plans designed to provide financial security in times of need. While they share the goal of safeguarding you against financial hardships, they differ significantly in their scope, benefits, and the scenarios they are designed to address.

The Differences

The main difference is that Serious Illness cover pays a once-off lump sum when you claim. Whereas Income Protection pays a regular income. There are also differences in the way tax is treated on both the premiums and benefit. In addition, there are also a range of other differences that need to be considered.

Income Protection

Income protection cover primarily focuses on replacing a portion of your income if you’re unable to work due to illness or injury. This product usually pays out a percentage of your regular income, ensuring you have a steady stream of money to cover essential expenses such as mortgage or rent, bills, and daily living costs. The payout is generally a monthly benefit and continues until you can return to work, retire, or until the policy term ends.

Serious Illness Cover

On the other hand, serious illness cover provides a lump sum payment if you are diagnosed with a specific serious illness listed in the policy conditions. These illnesses would usually include cancer(s) and heart conditions as well as illnesses like MND and Dementia. Unlike income protection, serious illness cover doesn’t replace lost income but provides a one-time lump sum payment upon diagnosis of a covered condition. This payment can help ease the financial burden of medical expenses or adjustments to your lifestyle, such as modifying your home for accessibility or seeking specialized treatments.

Serious Illness Income Protection
Pays a lump sum Pays a regular income
Covers only the illnesses specified in your plan Covers any illness, injury or disability that prevents you from working
Tax relief is not available on your premiums Tax relief is available on your premiums
Benefit payments are tax free Benefit payments are taxed
The plan stops once you have claimed You can claim as many times as you need (once you continue to pay premiums)
Cover available regardless of your occupation Cover is occupation dependent

 

As you can see from the above, there are important key differences between the two types of products. Combine these with your own requirements and you’ll see that there are many factors to be considered. When considering which type of cover to choose you need to consider the type of financial protection you need, the scope of coverage provided by the product, the cost and amount and duration of cover payment.

Conclusion

Choosing between income protection cover and serious illness cover will depend on your individual circumstances, financial needs, and risk tolerance. Both products serve crucial roles but differing roles in providing financial security. We can help you better understand what each cover will provide for you, and which will better meet your own requirements. Just contact us at Coleman Financial Planning to have a chat.

6 Ways to get Financially Fit for your Retirement

Introduction

Retirement marks a significant milestone in life. It’s a time where you can finally take a step back and unwind. However, making sure you are financially fit for retirement is extremely important. People are living longer and leading more active lives in retirement. As a result, it is more important than ever for you to think about where your income will come from when you retire. Here are a couple of the essential steps we advise to ensure you are financially fit for your retirement.

  1. START EARLY

One of the golden rules of retirement planning is to start as early as possible (but it is also never too late!). The power of compounding works wonders over time. Even small, regular contributions to your retirement fund can grow substantially over the years. Remember there is significant tax relief on pension contributions that you can also avail of.

  1. SET GOALS

Determine your retirement goals – where you want to live, what activities you want to pursue, and the kind of lifestyle you wish to have. If you have clear goals, it will help you estimate how much money you need to save for the lifestyle you want in retirement.

  1. DIVERSIFY INVESTMENTS

Diversification is key to managing risk. Spread your investments across various asset classes like stocks, bonds and property. Diversification can help you achieve better returns while mitigating potential losses. Many pension plans offer access to multi-asset funds at different risk levels which can help you diversify at a level that suits you.

  1. CLEAR DEBTS

Entering retirement with debt can put a significant strain on your finances. Prioritize clearing in particular high-interest debts like your mortgage and credit cards. Being debt-free allows you to enjoy your retirement without the burden of monthly payments.

  1. LIVING LONGER

With advancements in healthcare, people are living longer. Plan your finances with the expectation that you might live well into your 80s or 90s. This means ensuring your savings can sustain you for several decades. Retiring at 68 could mean you still have 20+ years ahead of you.

  1. GET PROFESSIONAL ADVICE

While the idea of retirement can seem very attractive putting a financial plan in place for it is very important but can be daunting. That’s where we can help. Don’t hesitate to seek advice from Coleman Financial Planning to help you plan the retirement you deserve. Just get in touch to start planning your financially fit retirement.

20 Ways to jump start your financial future

The cost of living crisis is changing how we manage money. The following is a comprehensive list that includes some starting points, as well as some more complex strategies, for those who want to jump start their financial future and make a long-term commitment to financial success.

Improve your financial literacy

Don’t know much about managing your money? The Competition and Consumer Protection Commission provides impartial and comprehensive information to help you make the best financial decisions for your needs covering saving and budgeting, interest and debt, investments and retirement, and more.

Start a money journal

Explore your attitude towards money, your hopes and fears and your dreams for financial success. Doing so can help you crystallise your long-term goals so you can make a plan for the future.

Write down your long-term life and financial goals

Include them in your journal, along with a timeline for achieving them.

Reconcile your bank accounts

Check your bank account debits against the payments you’ve made, and make sure any pending bills are either paid or scheduled.

Compare interest rates for savings accounts

This is a perfect place to start building or expanding your emergency fund. While you’re at it, commit to saving a specific euro amount or percentage of your income each month.

Make an extra credit card payment

If you carry a balance on your credit cards, start paying down the card with the highest interest charge.

Determine your net worth

List your assets (what you own), estimate what each is worth and add up the total. Next, list your liabilities (what you owe), and add up the outstanding balances. Subtract your liabilities from your assets to determine your net worth.

Estimate how much money you need to retire

Wondering how much money you need to live comfortably in retirement? Use a free online retirement calculator to figure out a rough estimate. This is one to try.

Organise your important household and financial accounts

Would your loved ones know how to run your household or understand your last wishes if you became sick or injured, or died suddenly? Start organising your important documents and accounts, store them securely and share their location with a family member, financial planner and/or solicitor.

Create a budget and track your spending

To get a handle on where your money is going, try creating a budget and tracking your spending.

Automate your savings and investments

One of the least painful ways to save and invest is to automate the amounts you want to set aside each month, so you won’t be tempted to spend them.

Contribute to a retirement savings plan

If you don’t have access to a government or company pension, consider setting up your own retirement savings account. If your employer offers such a plan, consider your options for enrollment, and make a plan to participate in the programme.

Shop for insurance

Plan to purchase insurance to protect your assets in the event of an unplanned occurrence or death. Types of insurance coverage include health, life, income protection, serious illness insurance.

Look for ways to lower your monthly bills

As contracts for things like your mobile phone, cable service or utilities expire, do some comparison shopping to see if you can reduce your monthly spend. You may even be able to negotiate a lower rate with your current provider.

Create or update your will

If you have a will already, take the opportunity to review and update it as needed. If you need a will, schedule an appointment with a solicitor or appropriate estate planning professional to create one.

Make some extra money by selling unwanted items

Looking for a way to reduce clutter and make some quick cash? Explore the many online tools for selling your unwanted Before doing so, be sure to review secure ways to handle payment and delivery, and research common scams.

Create a personal document retention policy

Learn how long you should keep important paperwork, such as contracts, loan documents, tax returns or account statements. Create a system to purge documents you no longer need, and scan and save the ones you need to keep.

Talk money with your child

Does your child understand the concept of saving money? Help your child open a savings account and understand the basics of paying bills and building credit.

Start a 3rd level education savings fund for your child

While the average cost of sending a child to primary and secondary school might seem high, the expenses associated with third level education are in a different ballpark, with accommodation representing a substantial average annual cost. One measure families can take to help avoid putting their households under financial pressure is to ensure early planning around their children’s education, adopting measures such as early life savings schemes.

Make an appointment with a CERTIFIED FINANCIAL PLANNER™ professional

As the standard of excellence for financial planning, the CERTIFIED FINANCIAL PLANNER or CFP® certification helps the public identify financial planners who have met the rigorous competency, ethics and practice standards necessary to engage with financial planning clients. In addition, CFP professionals pledge to place their clients’ interests first, an important point for those looking to build a long-term, trustworthy relationship with a financial planner. If you are looking to talk to a CFP, then please just contact Daragh at Coleman Financial Planning.

Source: www.fpsb.ie, September 2022

Investing in Challenging Times

Having weathered a global pandemic over the last 2 years, you’d think we’d be due a bit of good news for a change. Unfortunately, 2022 will be a tough watch when the producers of Reeling In The Years get to work on their latest instalment. We are still investing in challenging times!

Rising interest rates, spiralling inflation, astronomical hikes in fuel prices and most tragically of all, Russia’s brutal invasion of Ukraine, have all been constant features in our daily news.

So, with so many economic and geopolitical issues going on is it any wonder, I am being asked regularly, is now a good time to invest?

The reality is that at any point in the last 200 years of the stock markets existing there has always been a reason not to invest.

Time IN the Market

The key to investing in challenging times is to remember that it is ALWAYS about time IN the market and not about TIMING the market.

The more time you apply to an investment, the lower the risk it becomes.

Making short term predictions or investing based on a ‘hunch’ is no different to walking in to Paddy Power and placing a bet.

Short Term Option

For individuals with money on deposit you will not be surprised to learn that the banks are not going to pass on the forthcoming interest rate hikes for quite some time. With inflation currently at a 30-year high, the real value of your savings is losing money.

Having said that, everyone should have at least 6 months net income on deposit. They should also have funds to cover emergencies and future large spends such as holidays, home improvements or family education costs for the next 3-5 years.

Don’t bother shopping around for a decent rate, your money on deposit is there to be accessible and secure not to generate growth.

Medium to Long Term Option

For those with savings that are not required in the short term or you want to have the funds 5 years from now you need to commit your money to an investment that will generate growth.

Long term consistent growth can only be achieved by investing in the great companies of the world. That is through stocks and shares or equities. The portion of your investment in equities should be linked to your comfort level and attitude to risk.

Diversify, diversify, diversify!

Applying time to your investment is one way to manage risk and generate growth. The other is to spread your investment across different asset classes.

A balanced investment will generally invest 50%-65% in global shares with the remainder spread between bonds, property, commodities, and cash.

Even within a balanced portfolio most funds will be invested in over 500 companies. So you are never putting all your eggs in one basket.

Be Disciplined – Stick to the plan

The final and most important component of investing in challenging times is to be disciplined and stick to the plan.

It is quite natural to want to cash in or step out of your investment during periods of volatility. History has taught us that a bell doesn’t ring when the market bottoms out. By attempting to invest when you think ‘the coast is clear’ is likely to result in you missing out on some of the days that deliver the strongest returns.

Seek Advice

Your investment should be structured around your needs and your risk tolerance. It should be viewed as an important element of your overall financial plan. For that reason, it is important to seek out advice. An impartial professional advisor will work with you throughout your investment journey.

To discuss the investment options that are the right fit for you just get in touch with us here.

 

Source: Charts from Dimensional Fund Advisors 2022

 

 

 

 

 

When I’m not at work, I’m Cycling!

Last year, in the height of another dreaded ‘lockdown’ I did what a lot of guys my age seem to do. I became a MAMIL (Middle Aged Man In Lycra)! As a kid I loved my BMX but for most of my life, cycling was always a means to an end. I enjoyed cycling to college or work but I never really saw the attraction in cycling for the sake of it.

However, after some encouragement from some long standing MAMIL friends, I took the plunge and got myself a road bike.

One of the first things I learned is that it’s not just about the bike. There is an infinite list of accessories, clothing and safety gear. And then there’s the sophisticated technology devices and apps to be got.

Fast forward 12 months and I am a fully-fledged MAMIL. I even find myself watching late night repeats of the Tour of Flanders on Eurosport to study cadence and climbing.

While I’ve probably missed the boat with the Tour de France, I have learnt that cycling can be for everyone. You’re never too late to start (a bit like a pension!) and it allows for all standards and levels of fitness.

Cycling is something you can do alone or in a group. I have had some of the best conversations with my friends while on the bike (as opposed to on a bar stool). Unlike meeting your friends in the pub, you always remember the conversation!

Mental health has become omnipresent in todays world but I genuinely feel that the greatest benefit cycling has given me is with my mental health.

Exercising in the fresh air has really helped get a good night’s sleep and sets me up for the following day.

If you are considering getting in to cycling, I would recommend the following tips:

  1. Do your research before you commit to buying a bike. Get advice from a few bike shops to understand what bike you are best suited to and use YouTube to verify.
  2. Don’t scrimp on the gear. Cycling gear can be expensive but the cheap stuff doesn’t last as long and will not protect you as much as the more established brands. Make a wish list of items you need/want and spread out when you buy them. Make sure to let people know what you want when coming up to Christmas and birthdays!
  3. Download the Strava App. It’s free and it is a great devise to record your trips. You’ll spend hours after your cycle analysing your data!
  4. If Road cycling is not for you, consider investing in an e-bike. You’ll still be exercising and can cover a lot of ground in a relatively short amount of time.

If you are fortunate enough to live in Dublin you have one of the best cycling facilities on your doorstep, free of charge! The Dublin mountains are a great challenge to conquer. The rewards you get the higher up you go are well worth the effort. Not only that, once you go over the other side you are immediately in the stunning natural countryside of beautiful county Wicklow.

If you want to take a break from the hills, then a spin out to Howth or around the Phoenix Park are just as impressive.

Pensions & Tax Relief….How does it work?

How does the area of pensions and tax relief work? Bottom line is that the State will incentivize you to save for your retirement by allowing you save some of your gross salary (i.e. income before tax is applied) in to a pension plan.

For example:

How much tax relief can I avail of?

Each individual is allowed tax relief based on their age and percentage of their salary.

Know your limits!

  • Don’t be greedy! The maximum salary you can claim relief on is €115,000 p.a. Therefore if your income is €500k p.a., you can still only claim relief up to the first €115,000 p.a.
  • If you are a member of a Company Pension scheme and your employer is making a contribution to your pension, this is NOT included in your salary limit (so you probably have plenty of scope to contribute up to your limit).
  • If you are a member of a Company PRSA Scheme and your employer is making a contribution to your pension, this IS included in your salary limit (so be careful not to exceed your limit).

Sounds good? There are even more tax benefits...

  • When you contribute to your pension, the money is invested in a fund where it is allowed grow TAX FREE! Unlike a deposit account where the growth is taxed annually, a pension fund can grow without the burden of the growth being taxed. This cumulative tax free growth is the key ingredient in your pension fund, providing you with a long and happy retirement.

What about the tax when you want to retire?

  • The tax relief doesn’t stop just because you want to retire! There are a few options but in general, the day you retire you can get at least 25% of your total pot transferred in to your bank account TAX FREE!
  • The balance of your fund can remain invested and grow TAX FREE!
  • Whenever you do drawdown on the balance of the fund you are liable to income tax. However, there are various structures and ways to minimise the tax liability at that point.

What if I die and I haven’t spent all of my pension fund?

  • Even on death your pension can be tax efficient!
  • If you die and still have a pension fund (pre or post Retirement) it doesn’t die with you. Instead, your family can inherit your pension in a much more tax efficient way than if you had left them a property or money in a bank account.

So in summary you can get…

  • Tax relief on your pension contributions
  • Tax free growth on your pension fund
  • Tax free growth on your retirement fund until you draw it down
  • Tax efficient access to your pension fund throughout your retirement
  • Tax efficient transfer of your funds to your estate on death
  • Tax free lump sum at retirement age

With all aspects of Personal Financial Planning, it is important to get professional impartial advice that is specific to your own needs and circumstances.

For an initial chat to see if we are suited to working with you, simply get in touch.

Time, not timing, is important

This time last year, investment analysts were predicting a positive, albeit modest growth in the global stock market for 2021.

Looking back now we can see that most experts were too conservative in their assessments. The Global Stock Market finished off the year 32% up on the previous year. 

There are a number of factors that led to that investment growth, not least the rise in energy stocks, a low interest rate environment as well as the continuing boom in technology related companies.

For our pension and long term savings clients who have their investments in well diversified funds, you have benefited from being invested in the great companies of the world.

The outlook for 2022 is for growth to continue but at a slower pace than what we have become used to.

Rising inflation has already meant that the great companies of the world have had to adjust their spending and all the signs are pointing toward the start of rising interest rates in the US. This will affect the ability for those companies to borrow and/or service their existing debt.

So while the market is expected to cool that doesn’t mean growth stops.

As investors with money in Pension funds or long term savings, the number 1 rule when markets are turbulent is to remain focused on your original objective and stick to the plan.

The following video is a great illustration of how to avoid falling into the emotional investment trap.

As always, if you have questions about your investments, savings or retirement planning, seek qualified impartial advice from a trusted adviser. You can contact us here for an initial chat.

 

 

 

What happened to the pension in my old job?

Clients ask me this question regularly when we meet. So what does happen with your old pension?

We are often solely focused on a fresh start and looking forward when we move job. We neglect to address what we’re leaving behind – our own pension funds!

What you are allowed to do with your existing plan can vary. This depends on the structure of the pension scheme. You may be entitled to leave the funds in the scheme until you reach retirement age (normally 65) however there are other options that will allow you take control of your pension fund, control how you invest it and control when and how you draw it down.

For example you can transfer it into a:

  1. Pension plan with your new employer.
  2. Personal Retirement Savings Account (PRSA) and continue saving in to it.
  3. Personal Retirement Bond (PRB) and access it from the age of 50.

Like all important financial planning decisions, your individual goals and objectives will determine what option is best for you.

As a starting point you should seek out independent advice from a trusted advisor.

So if you’re wondering what you do about your old pension, get in touch with us today at Coleman Financial Planning to discover what option suits you best.

Make a start on giving yourself the retirement options you deserve!

 

 

Why saving for education is so important

Saving for education, it’s something that we often put on the long finger. There are so many other priorities, especially when children are small. But there’s lots of reasons why saving for education is important. And it’s never too early to start.

Recent research showed that over a third of Irish parents had no savings in place for their children’s education. It was estimated that the annual cost of sending a child to college could be between €5,000 and €10,000 a year and even more if they are living away from home. That’s a substantial sum over a number of years of third-level education, especially if you have a couple of children.

We all want to give our children the very best in life. A good education is part of that. It may seem early to start but time does fly. As part of your overall financial plan, you can look at how to start putting a little aside regularly to cover future education costs.

There are lots of investment savings plans available for anyone looking to start saving for education. These range from low-risk investments to more adventurous options.

The first step to selecting the right one is to talk with a professional adviser who can tailor the right solution for your needs.

If you need some help in getting started, we’d love to hear from you, just get in touch.