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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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Top 10 Essential tips for Leaving Cert Students in lead up to June 5

The final weekend leading up to the Leaving Cert exams can be very tough, as you try to balance last minute revision with much needed rest after a long, exhausting […]

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The final weekend leading up to the Leaving Cert exams can be very tough, as you try to balance last minute revision with much needed rest after a long, exhausting year.

The natural anxiety felt by students is often heightened by the annual media hype around the state exams and it is really important that you do your best to manage that stress effectively, so that you are ready to perform to the best of your ability once the exams start. The following tips may help to keep you focused and a little calmer in the lead up to June 5.

1. Review, don’t cram – Focus on summary notes, flashcards, or mind maps. This reinforces what you’ve already studied. Prioritise areas where you feel less confident, but don’t try to learn new material.

2. Practise past papers – Review marking schemes and time allocation for each question you will need to answer on each paper. Practise a sample of questions against the clock. This will maximise your scoring potential.

3. Organise your materials – Check the exam timetable and highlight your own exams. Prepare the stationary that you need, gather pens, pencils, calculators, and so on. Pack your bag the night before to avoid last-minute stress.

4. Maintain a healthy balance – Aim for 8 hours of sleep each night. Proper rest is crucial for memory, concentration and stamina. Eat well, include proteins, healthy fats, and complex carbs in your meals to maintain energy levels. Drink plenty of water, hydration is essential.

5. Try to manage stress – Schedule short breaks during study sessions and do something enjoyable and relaxing, like a short walk, playing or listening to music. Get fresh air and some light exercise. Use relaxation techniques like breathing exercise, mindfulness and meditation.

6. Focus on a positive mindset – Focus on your strengths and remind yourself of your preparation. Concentrate on what you know and not on what you think you don’t! Try to avoid negative self-talk and steer clear of discussions that heighten anxiety, such as comparing how much you’ve studied with friends.

7. Plan your weekend – Create a realistic timetable for the weekend, balancing study sessions with breaks and relaxation and don’t overdo the study. You need plenty of energy for the exams.

8. Stay connected – Talk to friends and family, if you are feeling overwhelmed reach out and get support from loved ones. If it’s helpful, have a short, focused study session with friends to clarify doubts.

9. Keep things in perspective – The Leaving Cert is important but won’t define you and regardless of what happens you have several options open to you. Try to reframe the media hype as the whole country getting behind you, for what they know to be a tough time for you.

10. Get Set for exam day – Double-check the venue, seating arrangements, and required materials for the day of the exam. On the evening before the exam, do a light review of key concepts but avoid heavy studying. Ensure you know how to get to the exam venue and plan to arrive early (at least 30 mins on the first day). Decide what you’ll wear to avoid rushing in the morning and have your water and snacks ready to go.

Above all else, give the exams your best shot! Once they are over you have a lovely ‘study-free’ summer and bright future to look forward to. Go n-éirí libh ar fad, the very best of luck to each and every one of you!

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Disability toilets for Killarney Library

Works to build new toilet facilities for people with disabilities should commence later this year. Cllr Marie Moloney tabled a motion at a recent Kerry County Council meeting. She said: […]

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Works to build new toilet facilities for people with disabilities should commence later this year.

Cllr Marie Moloney tabled a motion at a recent Kerry County Council meeting.
She said: “Application has been made for funding to the Department. As soon as the funding is approved, work will commence on the provision of Disabled Toilet Facilities.
“While ramps are installed for accessibility, it is unacceptable that any public building be without disabled toilet facilities in this day and age.
“I am aware of several people with a disability who constantly use the services of the Library and are very happy with the staff and the services that Killarney Library offers but are disappointed at the lack of disabled toilets.”
“I will be keeping the pressure on to have these facilities provided as soon as possible.”

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