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Are you saving too much?

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By Michael O’Connor

Working in the finance space, I get a lot of questions about savings such as am I saving enough, how much do I need to save for retirement, and how can I save more?

And I get it; uncertainty around money can be one of the leading causes of stress.

According to Northwestern Mutual's 2018 Planning & Progress Study, 48% of US adults experienced "high" or "moderate" levels of anxiety around their level of savings.

Increasing your savings can be a sure-fire way to provide the peace of mind necessary to alleviate this stress.

But is there a downside here?

Does our preoccupation with savings inhibit other areas of our lives and at what point does saving money have diminishing rates of utility?

The allure of early retirement cannot be denied; paying your mortgage off a few years early is compelling, but continuously foregoing what you want now in the name of saving for 'the future' may not be as necessary as we think.

Despite the anxiety and focus around saving, the evidence suggests that many individuals seem to be saving too much.

Recent studies from the Investment and Wealth Institute have shown that only one in seven retirees are withdrawing principal from their retirement within a given year. The remaining retirees live off of their investments or even less.

According to a study by United Income, 'The average retired adult who dies in their 60s leaves behind $296k in net wealth, $313k in their 70s, $315k in their 80s, and $238k in their 90s'.

In short, retiree wealth tends to go up, not down, with age.

This suggests that more people should be asking, "Am I saving too much?" rather than "Am I saving enough?"

Stop guessing and make a plan.

Financial planning is not simply about blindly saving as much as possible. Your finances should facilitate your life, not perpetually inhibit it until such time as you have saved an arbitrary amount that you deem adequate enough to allow you do the things you want.

So, where do you start?

Unfortunately, there is no one-size-fits-all answer. It depends on your own personal situation, your income and your lifestyle.

With that said, there are general benchmarks that can be used when assessing your savings levels.

Start saving 6% at age 25 and ramp up savings by one percent each year until reaching an appropriate level, typically around 15%, including any employer contributions.

Savings of between 1 and 1.5 times your current gross wage at age 35 is a solid target to aim for.
Most people looking to retire around the age of 65 should aim for assets totalling between seven and 13-and-a-half times their pre-retirement gross income.

These general numbers won't apply to everyone, and a more robust financial plan is essential, but this should help to get the ball rolling.

A more in-depth financial plan should incorporate future project earnings, inheritance, the progressive compounding of your investments over time and the reduction in your spending rate over time as you move away from your most capital-intensive years.

It is essential that you take the time to figure out what you are truly saving for. Clarity around your exact requirement will ensure you strike the balance between spending in the present and saving smartly for the future.

To learn more about how to get started go to www.theislandinvestor.com.

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Beaufort Film Night returns with French drama-comedy

Beaufort Film Night will return on Friday (October 17) at Cullina National School, with a screening of the French drama-comedy The Marching Band. The film tells the story of Thibaut, […]

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Beaufort Film Night will return on Friday (October 17) at Cullina National School, with a screening of the French drama-comedy The Marching Band.

The film tells the story of Thibaut, a successful conductor recently diagnosed with leukaemia. A search for a bone marrow donor reveals that he was adopted and has a brother, Jimmy, a cafeteria worker.
The two meet, discover a shared love of music, and form a strong bond through an unexpected collaboration with Jimmy’s workplace band.
The Marching Band (French title En Fanfare) will screen at 8.30pm. Admission is €7, cash only, and will cover the motion picture licence fee.
The film has a 12A rating and is in French with English subtitles.
Beaufort Film Night is a non-profit community group that screens cultural English and international films that usually do not receive general release in Kerry.
The event is supported by Kerry County Council Arts Office and Access Cinema. Cullina National School is providing the venue.
Further details are available on Beaufort Film Night’s Facebook page @BeaufortFilmNight.

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Tributes to Paudie O’Callaghan of the Fáilte Hotel

The town of Killarney and the wider Kerry community have been mourning the loss of Paudie O’Callaghan, who passed away peacefully over the weekend after a long illness. Paudie, pre-deceased by […]

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The town of Killarney and the wider Kerry community have been mourning the loss of Paudie O’Callaghan, who passed away peacefully over the weekend after a long illness.

Paudie, pre-deceased by his father Dermot and his brothers Donal and Dermot, was deeply loved by his family and friends. He is survived by his wife Valerie, his daughter Megan, granddaughter Rubie, his mother Eileen, his brothers Michael, Colm, and Niall, sisters-in-law Noreen, Eliza, Carol, and Kathy, and extended family, including nieces, nephews, brothers- and sisters-in-law, relatives, neighbours, and friends.
Paudie was widely recognised as a true gentleman and a cornerstone of Killarney’s business and social life. Minister Michael Healy-Rae TD paid personal tribute, saying: “This week brought very sad news with the passing of my great friend, Paudie O’Callaghan. Paudie was one of life’s true gentlemen, full of life, laughter, loyalty, and heart. He was a man who’d do anything for a friend, and I was blessed to count him as my very best. Even in difficult days, Paudie’s strength and spirit never left him.”
Minister Healy-Rae recalled meeting Paudie every Saturday in Killarney, walking the town together, meeting people, and enjoying the simple but meaningful moments that defined their friendship. He also noted the pride Paudie had in becoming a grandfather, a joy that brightened his final weeks.
The Killarney Chamber of Tourism and Commerce also paid tribute to Paudie’s contribution to the town. A statement from the Chamber said: “Paudie O’Callaghan played a very active and progressive role in the business life of Killarney and was always willing to lend a hand and contribute positively to whatever projects the town was engaged with. He spearheaded the Killarney Vintners Association for many years and was a very able and influential representative for that sector. His enormous contribution to the sporting and social life of the town is already well documented, and he contributed hugely to the town he loved in so many ways.”
Paudie reposed at the Fáilte Hotel on Monday evening. The funeral cortège arrived at St Mary’s Cathedral,on Tuesday morning, followed by burial at Aghadoe Lawn Cemetery.
Tributes highlighted Paudie’s warmth, loyalty, and dedication to family, friends, and the Killarney community.
Minister Healy-Rae summed up the sentiment shared by many: “People come and go throughout our lives, but every so often, someone truly special comes along who makes life better just by being part of it. That was Paudie. I’ll miss him dearly.”

Photos by Eamoon Keogh

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