5 Top Questions about Saving

    Saving is a crucial part of financial planning and it is an area that we receive a variety of questions about. Here Anne O’Doherty looks at the top 5 questions about savings that we frequently receive from clients and the answers we guide them through

    What is the difference between investing and saving?

    Saving and investing are two different ways to handle your money. Saving is generally when you put a set amount of money aside on a regular basis for a particular period of time. Savings tend to be low risk, easily accessible and shorter term. Investing on the other hand is the term generally used when you have a lump sum that you can put away for a medium to long term. It is more geared towards wealth accumulation and achieving longer term financial goals.

    How do I decide how much to save?

    One of the most common questions we are asked is how much an individual should save each month. The answer often depends on an person’s financial situation and their goals. A general rule of thumb is to follow the 50/30/20 rule. This means allocating 50% of your income to necessities, 30% to discretionary spending, and 20% to savings and debt repayment. This 20% can be further divided into short-term savings, like an emergency fund, and long-term goals, such as retirement. This will of course vary depending on a person’s financial priorities.

    Should I pay off debt before starting to save?

    This is a common question especially with clients who may have high-interest debt. While we would always suggest prioritising paying off high-interest debt, we do also believe that it is important to have some money put aside that is easily accessible, in case of emergencies.  We all know how unpredictable life can be and a financial plan should include provision for an emergency fund to avoid accumulating debt should unforeseen circumstances arise. It is possible to balance debt repayment and savings by allocating a portion of your budget to both simultaneously.

    What is an emergency fund?

    An emergency fund is a financial safety net and is essential for handling unexpected expenses. Having savings of 3 to 6 month’s worth of living expenses put aside is a good goal. This can be done over a period of time by starting small, making this goal more achievable. Simply setting up an automatic payment to your chosen savings account can ensure that this happens.

    What should I take into consideration when choosing a savings account?

    There are lots of variables to consider when choosing the right account for you. The answer depends on your own specific circumstances and you need to take into account things like what your goal is, how much you will be putting aside, how long you will be doing this, how quickly you may want to be able to access the funds and of course your attitude to risk. You also don’t have to pick just one product. You may have more than one goal and find that mixing products is the best option for you.

    Whether you’re just starting out with your savings journey or would like to ensure you’re on the right path, we’re here to help you. Discussing your savings and understanding the various options available to you is a critical part of any financial plan. We’ll work with you to understand how much to save, where to save, building an emergency fund, managing savings on a tight budget, and balancing debt repayment with saving can empower individuals to take control of their financial future.

    Building your savings can be simple and an effective way to achieve your longer term financial goals. We’re here to help with all your questions about saving. So if you’d like to take a closer look at saving and what kind of plan is right for your circumstances, just get in touch with us at Quintas Wealth Management, because we know what counts.

    The Need for Business Protection

    Running a business is like going on a journey. It’s exciting and rewarding but can be fraught with risks and uncertainty. For most business owners, their business feels like part of their family. You’ve protected them so why wouldn’t you protect your business too?

    Think about it, what would happen your business if something happened to you or one of your key employees? How would your business survive if someone became seriously ill? What would happen their shares if your business partner died? Would your own family be financially protected should something happen to you?

    There are many things that can keep you up at night. But if any of these questions do, then it might be time to consider business protection.  

    What is business protection?

    Business protection a type of financial support, sort of a life insurance for your business. It helps safeguard the most valuable assets –owners, shareholders and employees and helps ensure business continuity. Having the right business protection in place can offer peace of mind and allow you to do what you do best – run the business!


    Benefits of business protection

    • Financial Security

    One of the main benefits of business protection cover is to guard against financial vulnerabilities. These are the things that could jeopardize the viability of a company. In the case of your own or another key individual’s illness or death, business protection can help safeguard financial stability by providing funds to repay outstanding loans and cover any loss to profits. This way businesses can mitigate these risks and gain peace of mind knowing that they are financially protected against the unexpected.

    • Business Continuity

    Employees are the lifeblood of any organization, and their well-being is paramount to its success. However should something happen, having business protection in place may help to alleviate operational issues as well as prevent ownership issues or control disputes if something happens to you or another key employees. This will allow for a smooth transition and succession and the business to continue to operate.  

    • Peace of Mind

    Consider the time and effort you put into your own business. And what could happen to it in the case of an unforeseen event. Then business protection cover becomes not just an optional expense but an important tool. It will help safeguard the long-term viability and success of the business.  The financial security it provides will give you, your family and your business partners peace of mind.

    Next steps

    There are a number of different types of business protection cover that can be considered. The type and level of cover that is right for your business depends on your needs and the business structure itself. No one can predict the future but you can prepare for it. Regardless of whether you’re only recently started your business journey or are long established, your hard work deserves to be safeguarded. We’ve  helped lots of businesses plan for the future. So just get in touch with us at Quintas Wealth Management to start planning today.

    Our easy guide to understanding your retirement options

    When planning for retirement a lot of the conversation is around starting a pension. But what happens after you retire? A pension is a way of saving for retirement but how do you translate that pension into an income in your retirement? What are your retirement options and do you understand them?

    The first thing to know is that you can take a portion of your pension fund as a tax-free lump sum. The second is that you have two options – an ARF or an Annuity – to choose from using the balance to turn it into an income. Which option you choose is down to your own individual circumstances and preferences.

    What is an ARF?

    An ARF (Approved Retirement Fund) is a product that allows you to keep your money invested as a lump sum after you retire. This means you can manage your pension assets in whatever way you prefer and withdraw an income from the fund as you need it. Currently you must withdraw a minimum of 4% of the fund value each year. A big benefit of this type of personal retirement investment fund is that any balance remaining in your fund is payable to your estate after your death. ARFs were only introduced in 1999 but have been growing in popularity since then.

    What is an Annuity?

    An Annuity would have been the more traditional option at retirement to provide a stable income for the rest of a person’s life. It is a simple retirement payment option that guarantees to pay a particular amount every month in retirement. An annuity is purchased from an insurance company in exchange for the accumulated pension fund. There are a range of different annuity types and it’s important to ensure that the one you choose suits your needs.

    Key differences

    When considering your retirement options it’s important to understand the key differences between the two product types:

    1. At retirement, an annuity provides a guaranteed regular income for the rest of your life. An ARF allows you to remain in the investment market.
    2. You receive a regular pre-set income when you have an annuity but with an ARF you can withdraw funds whenever you wish (subject to minimum levels and tax).
    3. An annuity gives you a guaranteed income and removes the risk of stockmarket volatility that is associated with an ARF
    4. An annuity will cease once you die but an ARF generally passes to your estate.

    Which is the best choice for me?

    The answer to this question is down to your own personal circumstances including what other sources of income you may have and your attitude to risk. How you fund your retirement is a big decision and it is important to get advice on the different options and how they work. Just get in touch with us at Quintas Wealth Management if you’d like help in starting to consider your retirement options.

    Pension Auto Enrolment: An Update

    It’s 2024, the year when pension auto-enrolment is due to be introduced. Anne O’Doherty gives us an update on the status of the proposal, the timeline and what considerations need to be considered at this stage.

    What is pension auto-enrolment?

    Auto-enrolment is a new system to try to encourage people to make adequate provision for their income at retirement. It will work by having employers automatically enrol their employees into a workplace pension scheme. It is aimed at those people who currently are not in a company pension scheme. This is to increase active participation of the private sector workforce in supplementary pension provision.

    What is the current timeline for introduction?

    The proposal announced in 2022 had auto-enrolment scheduled to go live from the first quarter of 2024. That means that all employees not already contributing to an existing employer pension scheme and within certain age and earning parameters, will be required to automatically enrol in the new scheme. However, we are still awaiting the publication of the Automatic Enrolment Bill. The commencement date is currently now flagged as the second half of 2024, according to the Department for Social Protections website.

    Who will be automatically enrolled?

    All employees earning over €20,000 per year, aged between 23 and 60, and who aren’t already in a pension scheme will automatically be enrolled into the scheme. Those outside the earnings and age brackets, and who aren’t already in a pension scheme, will not be auto enrolled. However, they may choose to opt in if they wish.

    How does the scheme work?

    The current design is set up so that all employee contributions will be matched by the employer and topped up by the State. The initial employee contribution will start at 1.5% of gross pay, increasing to 3% in year 4, 4.5% in year 7 and a maximum of 6% in year 10. This translates to a total of 3.5% of an employee’s salary in year one (1.5% from each of the employee and employer plus 0.5% top up from the State). On the phased basis, in year 10 this would then be a total contribution of 14% (6% from each of the employee and employer plus 2% top up from the State).

    What do employers need to be aware of?

    • Eligibility Criteria

    Group pension schemes tend to have an eligibility period, often mirroring a probationary period. The average length of time is usually around 6 months. However, now on joining a company, an employee will be automatically enrolled into the new state scheme. This will be until such time as payroll detects an employer’s contribution into an alternative arrangement. There will be circumstances where an employee is auto enrolled and then sometime later is eligible for the existing company arrangement.

    • Alternative Arrangements

    The objective of auto-enrolment is to encourage people to make adequate provision for their income at retirement. What it doesn’t consider is the other options that are available. Some of these might be more beneficial for certain people, particularly those who are higher rate taxpayers. It’s very important that employers seek advice and enable this cohort to be educated in the various options.

    • Existing Schemes

    Auto-enrolment by its nature is not voluntary, whereas most existing company arrangements are. That means that employees do not have to join the company scheme. For employers, with existing schemes in place, this may mean that it will become necessary to adjust these to ensure all employees have immediate, compulsory membership. Again, there is an education aspect required here so that both employers and employees understand their options.

    What do employees need to be aware of?

    • Auto-enrolment

    The scheme will do what it says on the tin. That is all employees earning over €20,000 per year, aged between 23 and 60, and who aren’t already in a pension scheme will automatically be enrolled into the scheme. There may be alternative options available to them and it is strongly recommended to seek professional advice.

    • Opting out

    Employees who are enrolled will have to stay in the system for 6 months. They will then be free to opt out in months 7 and 8 if they so wish. In the first ten years, employees will also be able to opt out in months 7 and 8 after each contribution rate increase. Employees who opt out or suspend their contributions will be automatically re-enrolled after two years. This is once they are still eligible for the scheme.

    Overall, slowly we are getting closer to Pension Auto-Enrolment. But there is still a lot of questions around how the scheme will work in practice. There is an amount of education required for employers and employees. This will help ensure that they are fully informed about all their retirement options. When, and if, the scheme does roll out later this year the implementation will certainly cause some teething problems. In all likelihood this is going to be a far less flexible option than some of the alternatives. Our advice for all employers and employees is to seek professional advice as to the most appropriate option for their circumstances.

    How to get financially fit for your retirement

    Introduction

    Retirement marks a significant milestone in life, a period where you can finally take a step back and unwind. But financially preparing for retirement is extremely important. People are living longer and leading more active lives in retirement. As a result, it is more important than ever for you to think about where your income will come from when you retire. Here are a couple of the essential steps we advise in ensuring you are financially fit for your retirement.

    1. Start Early, Save Wisely

    One of the golden rules of retirement planning is to start as early as possible (but it is also never too late!). The power of compounding works wonders over time. Even small, regular contributions to your retirement fund can grow substantially over the years. Remember there is significant tax relief on pension contributions that you can also avail of.

    2. Set Clear Financial Goals

    Determine your retirement goals – where you want to live, what activities you want to pursue, and the kind of lifestyle you wish to have. If you have a clear vision, it will help you estimate how much money you need to save for a comfortable retirement.

    3. Create a Budget and Stick to It

    Budgeting is crucial at every stage of life, but it becomes even more more when you’re preparing for retirement. Track your expenses, identify unnecessary costs, and allocate funds towards your retirement savings. You need to ensure that you are putting something aside on a regular basis in order to fund your retirement.

    4. Diversify Investments

    Diversification is key to managing risk. Spread your investments across various asset classes like stocks, bonds, real estate, and mutual funds. Diversification can help you achieve better returns while mitigating potential losses. Many pension plans offer access to multi-asset funds at different risk levels which can help you diversify.

    5. Clear Debts Before Retiring

    Entering retirement with debt can put a significant strain on your finances. Prioritize clearing high-interest debts like your mortgage and credit cards. Being debt-free allows you to enjoy your retirement without the burden of monthly payments.

    6. Consider a Part-Time Job or Hobbies for Income

    This is something that we get asked about a lot. Retirement doesn’t necessarily mean you have to stop working altogether. Many more people are reducing their hours or switching to a different part-time job or even pursuing hobbies that generate income rather than simply not earning or relying on their pension alone. Not only does this provide financial support, but it also keeps you engaged and active.

    7. Plan for Longevity

    With advancements in healthcare, people are living longer. Plan your finances with the expectation that you might live well into your 80s or 90s. This means ensuring your savings can sustain you for several decades. Retiring at 68 could mean you still have 20 + years ahead of you.

    8. Seek Professional Financial Advice

    If navigating the complexities of retirement planning seems daunting, don’t hesitate to seek advice from Quintas Wealth Management. That’s what we’re here for.  We’ll help you select the right pension for you. Just get in touch to start planning your financially fit retirement.

    Quintas Wealth Management to join Xeinadin Group along with Quintas Accountacy

    Irish accountancy and wealth management firms Quintas and Quintas Wealth Management have announced they are joining Xeinadin Group, one of the leading professional services groups in the UK and Ireland. This strategic move will facilitate the companies’ growth ambitions.

    Speaking about the announcement, Anne O’Doherty, Head of Life & Pensions with Quintas Wealth Management, commented, “This is an extremely exciting development for our business and will benefit our clients greatly by giving access to broader resources and technologies while retaining the ethos and client-focused wealth management solutions that the Quintas Wealth Management team have built. It will be business as usual and there will be no change in how we work with our clients.”

    As Quintas Wealth Management operate in a regulated sector, Xeinadin must obtain all necessary regulatory approvals from The Central Bank of Ireland. The integration process will only commence on receipt of all regulatory approvals which could take up to 12 months to complete in full.

    We will keep our clients updated on a regular basis throughout this process to ensure a smooth transition.  In the meantime, should you have any questions please just get in touch.

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