In your 20s
Get saving: Saving is the habit of a lifetime and in order to create a habit, you need to put something into practice. Open a savings account and start as early as you can – whether it’s €10 a week from a part-time job or €100 a month from your salary, before you know it you’ll have a nest egg. And the simple discipline of saving will benefit you in more ways than you know – you’ll have some financial savviness, you’ll be more desirable to lenders, and you’ll have a growing rainy day fund for when you need it most.
Suss out the investment market: Try to overcome the perception that you are just making ends meet and don’t have any money to put aside. You will more than likely have fewer responsibilities in your 20’s than you ever will again in your life. So take advantage – get educated on investments and how you can make your money grow, don’t assume it’s for rich businessmen only, and if you can, take the first step and start small. You will thank yourself in your 30s.
In your 30s
Accumulate, accumulate, accumulate: If you don’t already have a pension set up, now is the ideal time to do so. This might be your first experience of investing and ultimately, it will be your most important investment. If your employer is going to match your contributions, try and contribute the maximum you can. The key is to accumulate as much as you can while you’re young and take advantage of the tax relief offered on pension contributions. It’s a no-brainer.
Don’t be afraid to take risks: While a pension should be your first port of call, remember you usually won’t have access to this until you’re at least 60. Life usually decides to show up for most of us in our 30’s – marriage, kids and houses are the biggest life decisions you make and most of them are carried out in this busy decade so wouldn’t it be nice to have access to some money to help with all that?
While saving always helps, the interest rates on savings and deposit accounts have been very low in recent years. Investing currently gives a much better opportunity for growth than deposit accounts. There is however an element of risk and the possibility of loss. Look for investment products that will cater for your appetite for risk – so you are fully aware going in of where you stand. A regular investment product is a good starting point.
In your 40s
Keep planning: Just because you’ve done the hard graft in getting to here, doesn’t mean you should take your eye off the ball when it comes to your financial planning. Make sure you review your pension investment – read your annual benefit statements and make sure you’re on the right track.
If you’re concerned, use online calculators to calculate your shortfall and how much extra you should be putting aside, or talk to your financial adviser. You might want to consider Additional Voluntary Contributions – these will help bulk up your pension pot and will give you additional retirement benefits.
In your 50s
Re-focus your investments: If you’ve found yourself with more financial freedom having (hopefully) paid off a mortgage, or put kids through school, it might be time to put some focus on your investments. It might be a while since you last thought about investing, so it’s worth speaking with a financial adviser to look at your options. It’s an exciting chapter.
Consider down-sizing to make savings: If you’re experiencing empty nest syndrome, it might be worth looking at downsizing your home. If it suddenly feels too big, it might just be. Newer, smaller homes tend to be more energy efficient too so you could make more savings than you think. Consider your own needs though, it might not be the answer but it’s one worth exploring.
In your 60s
Enjoy yourself: They say Irish people are happiest from age 60 (Source: Irish Life, 2014) so congratulations – you’ve mastered the pursuit of happiness. Now is the time to start making plans for what you’re going to do when you retire and what you’re going to do with your pension. Engage in conversations with your financial adviser, you might still need more education on all the options available to you at this point. But above all, enjoy yourself, you deserve it.
Stay ambitious: You probably still have ambitious plans for your future, or your children’s future, or your grandchildren’s future. Keep your mind and body active as much as you can and continue to work towards your financial goals. Life doesn’t stop at age 60, so neither should you.
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