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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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Ted Healy Properties wins DNG Small Branch of the Year

A Killarney estate agents has received a national award at the DNG National Conference and Awards, which took place at The Curragh Racecourse last week. Killarney estate agent DNG Ted […]

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A Killarney estate agents has received a national award at the DNG National Conference and Awards, which took place at The Curragh Racecourse last week.

Killarney estate agent DNG Ted Healy Properties was named the ‘Small Branch of the year’ at the awards sponsored by the Irish Examiner.

The Conference and Awards ceremony was attended by more than 150 delegates from offices across Ireland where a range of topics from Ireland’s property market outlook to DNG’s recent partner affiliation with Hampton International and the role of DNG in the residential and commercial sectors, were discussed.
Delegates were entertained by guest speaker Ireland Rugby legend and La Rochelle coach Ronan O’Gara.

The judging panel of industry experts, included Peter Dargan of Irish Times, Adrian Bushnell of Pan Research, Ross Killeen of Media Pro and Keith Lowe, CEO of DNG.
The panel praised DNG Ted Healy for the high standard of service to customers and the team’s use of Social Media to enhance their business.

A native of Killarney, Ted Healy officially opened his estate agency practice in March 2006 and has gone from strength to strength ever since providing a highly professional and competent residential and commercial estate agency service to the people of Killarney and its surrounds.

“We are so grateful to be recognised as the DNG Small Branch of the year. The whole team at DNG Ted Healy has strived towards excellent for the last 12 months, and this only motivates us to continue exceeding expectations and delivering excellence to our clients,” said Ted Healy.

The awards celebrate the hard work carried out across the DNG Network and recognise the successes of individuals within the organisation, rewarding the high standards of service, business acumen and professionalism that are demonstrated in each DNG branch.

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Fassbender ready for second Le Mans appearance

Local Hollywood A-lister Michael Fassbender is in the final preparation stages for his second appearance at the legendary 24 Hours of Le Mans. The iconic endurance race is celebrating its […]

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Local Hollywood A-lister Michael Fassbender is in the final preparation stages for his second appearance at the legendary 24 Hours of Le Mans.

The iconic endurance race is celebrating its 100th edition next weekend.

The Fossa star has already arrived in the famous French twon where he is involved in a week-long series of engagements including drivers’ parades, autograph sessions and more serious appointments like car safety checks, practice and qualifying.

Like last year, when he finished 16th in the LMGTE Am class, Fassbender has been entered in to the event by the German Proton Competition team with Estonian Martin Rump and the Austrian Richard Lietz.

Fassbender dreams of following the trajectory of fellow Hollywood actors Patrick Dempsey who was second in LMGTE Am class in 2016 and Paul Newman who finished second overall in 1979.

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