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What is the purpose of an annual review?

The purpose of an annual review is as simple as it says on the tin. A check in, once a year, to make sure that the plan is doing what it was put in place to do and to make any necessary adjustments. Your circumstances can change significantly. That could be in the form of perhaps your marital status, the arrival of children or an unexpected windfall. And even if they don’t, as you manage your monthly budget and work towards your financial goals, it’s helpful to pause every now and then and assess where you are at and where you are going.

What happens at an annual financial review?

A financial review allows both you and your advisor to take a comprehensive look at your finances, evaluate what is working and also what may not be and determine if any changes need to be made. Life events and changing priorities and goals can have a big impact on  your finances and planning. Products and pricing also change and there may be a better option available to you than previously.

What’s covered during an annual financial review?

For us, we recommend an annual financial review as an integral part of any financial plan. It is the step that can make or break the plan. Many people do this as part of their pension and tax planning when the tax deadlines are approaching. But a financial review can be conducted at any time of the year.

The review offers a comprehensive view of all of your finances. Right from your income and expenses to your assets, mortgage, protection and pension plans. Your progress towards savings goals and retirement goals is assessed. Your risk profile will be looked at as this can change depending on both your own circumstances as well as external market factors.

Most importantly, the review gives you an opportunity to take a look at your plan. You can discuss the elements of it and make any required changes. For example, starting a savings fund for your children’s education or changing your target retirement date.

How do I arrange a financial review?

While you can conduct a review of your plan yourself, the best way is to do this with your financial advisor. They will have the knowledge and experience to look at your plan and, if necessary, give you recommendations on. They will also have access to a broad range of up to date financial products and tools. These could be a great fit for you and help you achieve your goals.

Whether you already have a plan in place or would like to start putting together a financial plan, we’re here to help. Just get in touch and we can arrange an appointment at a time and place that suits you.

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Pension planning and protection

Now, with the approaching self-employed tax deadline, many people are focussing on their pension planning. This is very important and a core part of a financial plan. But it shouldn’t be looked at just at one point in time or as a standalone product. Many people don’t consider what might happen if they couldn’t continue to pay contributions to their pension plan.

If you reduce or stop your contributions for any period, it means your pension pot stops growing during that time. Less money put into the pot means you’ll have less to use as an income.

But should something unexpected happen, there is a way you can be prepared for the situation. This will make sure that your financial future is safeguarded.

Safeguarding your pension

How do you protect your pension? It’s something that we often don’t think about. But by taking out an Income Protection plan it can be easily done. In fact, this will go far beyond just protecting your pension contributions. Income Protection pays you an income if you’re unable to work due to any illness, accident, or disability. If you think about it, your income pays for everything else so without it you could be faced with a huge shortfall to cover your cost of living. An income protection plan gives you financial security when you need it most. And with tax relief available on the premiums you pay, this is a very cost-efficient way of protecting what matters most.

Example

Joe is paying €500 p.m. to his pension. Joe decides to take out an income protection policy costing €80 p.m. He then starts paying €420 p.m. into his pension so his total outgoings remain the same as does his tax relief. However, Joe has the comfort of knowing that he is not only building his pension pot but protecting both it and his current income and lifestyle.

If you would like to have a chat about your financial planning needs and how you can protect your pension, please just get in touch.

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What are my pension options?

There are a number of different types of pensions – personal, PRSA, occupational scheme. There is also a new auto enrolment workplace pension scheme due to be launched in 2023. Which type you can use to save for your retirement depends on a number of different factors and a financial advisor can help you understand the options.

How is a pension tax efficient?

There are three unique tax benefits that apply to a Revenue Approved Pension Plan that are not available elsewhere:

Tax Relief on Contributions – The contributions you make to your Pension Plan, within certain limits, are allowed in full as an expense against your income tax. In simple terms, for a top rate taxpayer, each €1000 contribution to your plan reduces your tax bill by €400!!

Tax Free Growth – The investment growth achieved by your contribution is allowed grow completely tax free. This compares with most personal investment vehicles such as deposit accounts and personal savings accounts where any growth is subject to a tax charge as high as 41%

Tax Free Lump Sum on Retirement – On reaching retirement age you can take a large slice of your accumulated Pension Plan as a tax-free lump sum. This can be 25% of the value or up to 1.5 times your taxable income, depending on the type of Pension Plan you have.

Why do I need to think about investment funds?

A pension is a product that uses investment funds to make the most of your money. The investment funds you select will be important depending on the stage you are at. A pension is regarded as a longer-term investment and some risk can be taken. If you are starting later then you will need a more cautious strategy. Many fund managers offer a pension lifestyle strategy. This simply means that how your pension is invested is automatically adjusted. This is done by moving into lower risk funds, as you get closer to your selected retirement age.

We all have a general idea of what we would like to do in retirement. It might be travelling, spending time updating your home or taking up a hobby. However, in order to make those plans a reality we need to ensure we have the financial resources necessary. Relying solely on the State Pension (which is currently €253.30 per week) certainly won’t allow you to do very much.

While your retirement may seem like a long way off, the sooner you start saving for it the better. It’s important to make sure there’s funding in place to help you enjoy those years. With generous tax relief and a lot of investment options, there’s no reason why not to start a pension.

Whether you’re just starting work or are mid-career, just get in touch . We would be happy to have a chat about your options.

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Better rate

Like anything mortgage offerings change. Interest rates and product options are being updated all the time. Now could be a good time to see whether you could save money by switching your mortgage. This could be an opportunity to switch to a product that is more suitable to your current financial situation.

Release equity

Your home may have built up a certain amount of equity since you first drew down the existing mortgage. By switching your mortgage, you could avail of the option of utilizing this for additional cash. This could help with home improvements or even educational fees.

Debt consolidation

Switching your mortgage can provide the possibility of consolidating your debt. Depending on what way you wish to structure your finances, you could have the flexibility to just pay one single monthly payment to cover your debts.

While you may think switching your mortgage will be time-consuming and stressful, it doesn’t have to be. As an independent financial broker, Lifespan Financial Services offers a simple and straight-forward service by doing the hard work for you. This allows us to give you the best options for your circumstances and guide you through the entire process, if it’s right for you.

If you’re interested in having a chat about what your options might be then simply request an appointment through our website or give us a call.  

ALWAYS HERE FOR YOU – CONTACT US TODAY FOR A NO OBLIGATION CHAT

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Your income is your greatest asset. Without it the bills wouldn’t be paid, the mortgage wouldn’t be
paid, the car wouldn’t be there. And there would be no luxuries like gym memberships or holidays.
It can be easy to take your income for granted. But have a think about what would happen if an
illness or injury left you unable to work. How long would you receive payment from your employer?
Do you have savings you could use to sustain your lifestyle?

If you are entitled to it, State Illness Benefit is currently €203 a week. Would that cover your current
outgoings?

Income Protection provides an alternative income while you’re unable to work. This can give you
financial security and peace of mind while you recover. Here’s an easy-to-follow video guide to
Income Protection from one of a choice of product providers:

An income protection plan pays you a replacement income until you return to work or until your
chosen retirement date, if you’re not fit to return to work before then. There are a selection of
product providers and plans with different features on offer. At Lifespan Financial Services we can
help you to select the best choice for your individual circumstances and lifestyle.

ALWAYS HERE FOR YOU – CONTACT US TODAY FOR A NO OBLIGATION CHAT

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Is your money working for you now?

You may have a healthy bank balance but there is always a downside. In this case, it is that although
there is more money sitting on deposit, it is becoming less valuable. We are in a 0% interest rate
situation. That accumulated sum you have on deposit isn’t “just sitting in the bank”. It’s certainly not
earning you any return. In fact, it’s actively losing value due to inflation. It’s all very well having a
small amount of money readily available for “a rainy day”. But to make the most of your money you
need to look at the options to make it work harder.

So, what are the options?

There are currently a wide variety of very attractive regular savings plans and investment bond
options available. In comparison to deposit accounts these offer two main advantages:

• Investment Growth
You need your money working as hard as possible for you. This is possible to achieve through a
medium to long term equity-style investment plan. Although investment markets felt an initial sharp
drop in March/April 2020, they levelled out over the summer and to year end. The US election result
and vaccine roll-out among other political and economic factors are reflected in an uplift in fund
values.

• Investment Options
Although you need your money to achieve strong returns, you should only take on a level of risk that
you are comfortable with. There is a wide range of fund options including readymade portfolio and ESG fund options available. These help to ensure there is a suitable choice regardless of your risk
profile and how long you wish to save or invest for.

Next steps

The next step to take is to talk to a financial adviser – you can contact us here at Lifespan Financial
Services. We will help you decide what your saving/investment goal is. How much money you can
put away and for how long. And we will work with you on how to assess what your appetite to risk
is. Most importantly we will outline the product options and choices that are best placed to deliver
on your goals.

ALWAYS HERE FOR YOU – CONTACT US TODAY FOR A NO OBLIGATION CHAT

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