People can have a need for financial advice at any time in their lives but there are key events when it is especially important;
Starting your first job
If you have just started working, either you will be given access to a company pension scheme, in which case you will need advice on how much you need to contribute in order to have sufficient income in retirement, or you will need to set up your own pension. We advise on all types of pensions.
If your employer offers an employee share incentive scheme, you will need advice on how to minimise tax on share sales, how to calculate your Capital Gains Tax liability and how to make the return. You should also be aware of the risk of having a large proportion of your net worth as well as your income, linked to the fortunes of your employer. We can help you to avoid concentration risk.
The task of getting a deposit for a house together has become significantly more challenging than it used to be due to Central Bank mortgage rules and low returns from deposits. Talk to us about your options for getting there as quickly as possible.
When you are drawing down your mortgage you will need a mortgage protection policy. You will generally secure a better mortgage protection policy for lower cost from a broker than you will from a bank.
When you apply for a mortgage you will be approved for the maximum amount which the rules and your finances allow. This may not be the optimum amount of debt for your circumstances. As part of our Financial Planning offering we can advise you on your optimum level of debt for your situation. If you need to reduce your debt we can show you a number of options for how to do this without putting undue pressure on your finances.
Birth of a child
Did you know that if you invest your children’s allowance in an equity based instalment savings plan it could accumulate sufficient funds by the time the child is aged 18 to fund their third level education in full?
In order to make sure that your children are supported through primary and secondary level education you may consider taking out term life cover to protect against the death of an earner.
Immediately after you get married is a great time to plan for your future. You are likely to have objectives which you need to fund for – kids, trading up to a larger home, third level education, a career break or a significant holiday, or maybe you just want to know how best to organise your finances in order to accumulate wealth. We provide a full financial planning service.
If you are a member of a company pension scheme and you are considering leaving your current employment, you should have your company pension reviewed by a competent adviser in advance. A good adviser will be able to tell you if there are any good tax planning opportunities available in your circumstances. If you approach an adviser to do this and the first thing they address is whether you want to transfer the pension out to a product under your own control (a bond or a PRSA), then you are talking to the wrong kind of adviser; there are more pressing issues and they have to be handled before you leave the employment so time is of the essence.
Setting up your own business
If you decide to establish your own business we can advise on how the various structures work, ways to protect the value of the business and how to extract wealth tax effectively.
When the kids move out
At this point your disposable income should increase which will give you the ability to ramp up your progression towards achieving any objectives which were previously out of reach. This is a good time to consider how you are going to allocate your extra disposable income optimally.
A pay rise
If you are managing ok on your existing income, a pay rise represents a good opportunity to accumulate wealth painlessly.
If you are diagnosed with a serious illness you should let your financial adviser know. You may have cover which will pay a benefit and in addition it may affect the advice you receive regarding other aspects of your finances, especially pensions.
If you have a pension you will need advice in relation to your options at retirement. We can explain your options in easy to understand jargon free language. Even if you don’t have a pension, retirement can present an opportunity for some good tax planning. If you really want to take advantage of the available options the best time to seek advice is at least 10 years before your planned retirement date, especially if you are a business owner, but there’s often alot your can do six months prior to retirement, at retirement and even after you have retired.
Have you accumulated significant wealth, sold a business, inherited money or assets or just become aware that you are going to inherit? Will you have a tax bill? Do you know how to sustain this wealth into the future? In the current low interest rate environment your wealth will reduce each year unless you manage it and invest it in assets which grow by more than the rate of inflation.
If you have more wealth than you will use during your lifetime you will need to plan for passing it on to the next generation in the most tax effective manner possible. It is important that this process be commenced early. Estate Planning can also deal with wills, guardianship, trusts, charitable giving, succession planning, wealth preservation, health issues and death. Everyone should engage in estate planning but obviously the issue is even more important if you have a large amount of wealth.
Most people spend around 2,000 hours a year working to earn money but invest it in financial products which were sold to them by someone with a target to meet, and which aren’t optimal.
If you would like to approach it from a different direction, take a small amount of time to set out what you want to achieve and then use these objectives to draft a plan for your finances, then we can help. Contact us on 01 546 1100, by using the contact form below, or by email to [email protected]
The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision.
© Highfield Financial Planning 18 June 2019
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