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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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Kerry base confirmed for Rás Mumhan

By Sean Moriarty Preliminary details of the Rás Mumhan have been announced by Cycling Munster. The four-day international cycle race will, once again, be based at the Riverisland Hotel in […]

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By Sean Moriarty

Preliminary details of the Rás Mumhan have been announced by Cycling Munster.

The four-day international cycle race will, once again, be based at the Riverisland Hotel in Castleisland and will run from Good Friday until Easter Monday.

The final route has not yet been revealed but it is expected to follow a similar path to the 2022 edition.

Last year, due to organisational difficulties, the Rás Mumhan committee asked local clubs to take charge of each day of the race.

Killarney Cycling Club hosted the Easter Saturday leg of the race, including managing the stage start in the town centre, the Category One mountain climb at Bealach Oisin Pass and the stage finish in Sneem.

“We are looking forward to seeing everyone at Easter and we wish all the riders the best of luck in their preparations for the event. Further details to follow as they are confirmed,” said Race Secretary Sinéad Moriarty.

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Showcasing Killarney to an influential audience

Kerry’s hospitality professionals turned out in style for the Skal President’s Dinner on Saturday night. It’s the social highlight of the year for professional tourism and travel organisations and it […]

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Kerry’s hospitality professionals turned out in style for the Skal President’s Dinner on Saturday night.

It’s the social highlight of the year for professional tourism and travel organisations and it was also a perfect opportunity to show the best of Killarney. Held in the Plaza Hotel, it was hosted by Kerry Skal President Michelle Rosney who used the occasion to highlight the best of Killarney’s performing arts talent, cuisine and locally produced drinks. There were special performances on the night by singers and dancers from St Brigid’s Presentation Secondary School and the West End House School of Arts who brought The Liberator, Daniel O’Connell, back to life for one night only to deliver a passionate dramatisation of a famous speech. Skal is the largest international hospitality networking organisation in the world with 13,000 members in 308 clubs in almost 90 countries. Fáilte Ireland Chairman Paul Carty said in his speech that the contribution Killarney has made to the Irish tourism industry should not be underestimated. He added that the tourism industry supports over 3,500 jobs in Killarney and over 7,000 in the rest of Kerry. He said the hard work put in by tourism professionals in Killarney over the years is paying off and when Fáilte Ireland surveyed hundreds of domestic and international tourists, at the height of the season last August, they couldn’t speak highly enough of their experience with 97 percent saying they were very satisfied. “The national figure is 90 percent so Killarney is actually seven percent higher than the national average and that’s truly exceptional,” he said. Over 55 percent of visitors to Killarney also spend time in other parts of Kerry and towns, like Dingle, Kenmare and Tralee, and really benefit from the spin-off.

INDUSTRY CHALLENGES

The Fáilte Ireland chairman said his organisation is acutely aware what Killarney has faced in recent years and the challenges it currently faces and every support possible will be provided to help.

Mr Carty said Fáilte Ireland last year launched a destination experience and development plan for Killarney and that will see the town reach its full potential through sustainability and the development of year-round tourist attractions.

He said costs were also a big concern with energy bills, in particular, going through the roof and putting businesses under serious pressure.

Staffing was another serious problem for the industry as so much talent was lost during the pandemic.

“An awful lot of great people left our industry and they’re not coming back, so there is a great shortage,” he said, adding that Fáilte Ireland was working hard to overcome the difficulties being experienced.

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