How to get children saving early \u2013 and why prize bonds aren\u2019t the answerOpens in new window<\/a>\u00a0]<\/p>\nTime is something Whelan values given his own brush with missed savings, pension contributions and compounding.<\/p>\n
\u201cIn 2008, when the financial crisis hit, I was 31, and like so many others, I took a significant salary cut just to stay employed,\u201d he says. \u201cA few years later, at 35, I was made redundant, so I started a business at yet another pay cut. This meant, for nearly a decade, I didn\u2019t go back to my 2008 salary level because I was focused on survival. <\/p>\n
\u201cIt\u2019s why I can relate to those in their 30s now who are worried about the effect of missing out on getting on the property ladder, as I know the real cost. It isn\u2019t just the money you didn\u2019t earn \u2013 it\u2019s the wealth you don\u2019t build.<\/p>\n
\u201cI meet a lot of clients between the ages of late 40s and early 50s, and the difference between those who managed to avoid the worst of the recession and their peers is significant. These were workers in tech or pharma, or sectors which weren\u2019t really affected by the downturn, and got wage rises when people were getting pay cuts, or bonuses when others were just happy to have a job. So if you have the opportunity to build on your wealth, you should do it.\u201d<\/p>\n
But where you save, what access you need to funds and what returns you might get on those savings are just as important, says David Funcheon, a financial planner at Ask Acorn, a personal and business financial company in Galway.<\/p>\n
\u201cIf somebody needs access to cash in the short term, which we define as three to five years, it should be in an on-demand deposit account, but if it\u2019s going to be longer, they should be saving into an account or a fund that\u2019s going to yield them a return equal to the risk you\u2019re willing to take to get that return,\u201d he says. <\/p>\n
\u201cWe have a serious amount of money being invested in traditional banks and current accounts and deposit accounts that are returning little to nothing. <\/p>\n
\u201cA lot of these accounts are returning 1-1.5 per cent, with inflation around 2 per cent, so the buying power is being significantly affected. If people can save in a facility \u2013 whether an equity-based fund or a managed fund through a life company set-up \u2013 then you can expect to get a return of 4.5-5 per cent over the medium to long term because the effect of inflation is negated by the rate of return. <\/p>\n
\u201cSaving in equity-based funds over traditional banks also has the benefit of gross return or \u2018gross roll-up\u2019, where the tax is applied on these funds every eight years, whereas traditional bank accounts are taxed on an annual basis.<\/p>\n
\u201cSomeone in their mid-to-late 20s with the goal or expectation that they might be able to save \u20ac20,000 or \u20ac30,000 over a 10-year period could actually benefit from the compound gross roll-up year in, year out for eight years and then be taxed on that rather than on an annual basis.\u201d<\/p>\n
You need to get your basics right \u2013 get a roof over your head, keep your debts low, and then move on to your investing<\/p>\n
But all is not lost for people in their 40s and 50s who want to enhance their pension funds now because some additional disposable income is finally available to them. <\/p>\n
\u201cI would be looking at how they are fulfilling their requirements in relation to the amount that they can save equal to the threshold of \u20ac115,000 based on their age,\u201d says Funcheon. <\/p>\n
\u201cIf someone in their 40s can save 20 or 25 per cent of their income \u2013 most people are probably saving on through pension return of about 6-8 per cent \u2013 there is huge scope to make up that difference through additional voluntary contributions [AVCs]. <\/p>\n
\u201cThe benefit from that is the tax relief, because if they\u2019re earning over \u20ac44,000 a year, they\u2019re getting a 40 per cent return on it. So there\u2019s a huge advantage to doing it because it\u2019s then supplementing the retirement income.\u201d <\/p>\n
Bruen\u2019s advice for people her own age and younger is to start saving immediately and be realistic about what you want in the short term before planning for the longer term.<\/p>\n
\u201cI think a lot of young people get caught up on TikTok and Instagram and come out with all these ideas around how to make money fast and invest in certain things like Bitcoin and stocks on Revolut, and these are not the places to be saving your money,\u201d she says.<\/p>\n
\u201cIf your goal is a house and you want to do that in the next five years, then you need to be looking at banks, at deposit accounts that offer cashbacks, then that\u2019s a good place to get started. You need to get your basics right \u2013 get a roof over your head, keep your debts low, and then move on to your investing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"When Teresa Bruen and Brian Redmond were aged 24 and 25 respectively, they bought their first home \u2013…\n","protected":false},"author":2,"featured_media":32766,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,25004,2512,9611,131,132,25005],"class_list":{"0":"post-32765","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-for-you","13":"tag-investment","14":"tag-pension","15":"tag-personal-finance","16":"tag-personalfinance","17":"tag-the-juggle"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/32765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=32765"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/32765\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/32766"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=32765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=32765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=32765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/07\/1750666492401-6cb3202b-4696-4e36-8ac6-ab150db37133.jpeg\"\/)
How to manage your pension in these volatile times<\/p>\n