Tag Archives: #investing

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

 

 

 

 

 

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.