Margaret Jennings reports on why it’s important to manage your money well so you don’t get caught out.

APATHY, ignorance, and telling ourselves we have no time are three reasons why we end up floundering about our financial situation as we age. 

But given that we are living longer than ever before, it’s becoming a burning issue, warns financial adviser John Lowe, aka The Money Doctor.

We are apathetic because we think financial issues are boring, we end up ignorant as a result, and then claim we have no time because we put our priorities elsewhere — like engaging with family, friends, and hobbies.

“It’s really only when it hits most people square between the eyes, that they have to do something about it,” he says.

Yet earlier this year the results of research carried out by life investment and pension company Irish Life revealed that fear of not having enough money in retirement was a major concern for Irish people.

At the time, Gerry Hassett, managing director, Irish Life Retail, said: “Overall 55% of those interviewed were concerned that they would not have enough money to retire comfortably, with this of most concern to the group aged 50-64 years (64%). 

"A third of people were also worried about not being able to meet household debt commitments.”

Those interviewed specifically in relation to retirement worries named the cost of care in later life; not having saved enough; the risk of inflation affecting their quality of life and the risk of outliving their retirement savings, being the top issues.

Though we may be turning a blind eye to our personal finances, it’s an issue that is coming increasingly to the fore, as questions arise about how an ageing population, who haven’t sufficient resources, can be funded though the Government’s pension coffers.

There are more than 677,000 Irish citizens over the age of 66. In 10 years that number will be 767,300, which means more than 16% of the population will be in retirement.

If you are currently 55 and live to age 89 — increasingly likely — it is predicted in 2050 you will be among the 1.8m living here aged over 66.

You can see why the government got rid of the transitional State pension and increased the pension age entitlement to 66 with further hikes to 67 years in 2021, and 68 in 2028.

Further evidence of the government’s concern over the cost of changes in life expectancy were highlighted recently with Minister for Public Expenditure Paschal Donohoe recommending that the private sector allow employees to continue working beyond age 65, as a result of the report of the Interdepartmental Group on Fuller Working Lives.

People need to get with the programme warns Lowe, who himself is in his late 50s and has over 30 years’ banking experience.

On a very basic level of taking responsibility for our finances, now though, he says, we should:

  • Draw up a budget at the beginning of each year and then put two hours aside every month to sort out money issues and see where we can save. Ask ourselves two questions: “Do I need it?” and “Is there a better or cheaper alternative?”

  • Ensure we have a rainy day fund — three to six months’ annual income — in an accessible and best interest-bearing account and at best interest rates.

  • Use the internet for managing our accounts and cut down on our banking bills. Don’t presume an institution is loyal to us. Yesterday (or 40 years ago) we were a prospect, but today we’re a client. Shop around. Visit the Competition and Consumer Protection agency’s website where we can do comparisons of costs for our bank account fees and get financial advice.

  • Get professional independent financial help and check in with him or her twice a year and every time we have a major financial decision to make. Prioritise this as we would any health or lifestyle expertise in our life.

  • Check and recheck our interest rates regularly on both borrowings and savings.

  • Diversify any surplus cash or savings across different sectors.

  • Don’t leave surplus cash in a current account or low interest bearing deposit account.

  • Don’t exceed our credit card limit. Pay on time and never take cash on the card. Be careful using the card in non-EU countries as it will cost.

  • Don’t invest in a project if we don’t understand it fully or it’s too good to be true.

  • Respect your commitments and don’t try and keep up with the Joneses.

Overall, taking responsibility and putting the time aside to focus on our income, is number one tip, says The Money Doctor.

If we remain apathetic and ignorant — only we will suffer.

* John Lowe, is the author of The Money Doctor 2016: 100 Ways To Save Cash, €12.99, published by Gill Books.

The 12th edition is due out in November. 


Read for life

Ageing with attitude: Planning for a good bill of financial health

We all know what a feelgood feeling it is to cuddle up with a good book. But US research suggests reading could even add two years to our lives.

Researchers at Yale University School of Public Health examined the data over 12 years of 3,635 men and women who were part of the health and retirement study — a nationally representative sample of US adults aged 50 and older.

The participants self-reported their reading habits and those who read books survived almost two years longer, over the 12-year follow-up; those who read for up to 3.5 hours weekly were 17% less likely to die, compared to those who did not read at all, while those who read for more than 3.5 hours weekly were 23% less likely to die.

Metabolic health

The Hormone Reset Diet: Heal Your Metabolism to Lose Up to 15 Pounds in 21 Days, Sara Gottfried, €13.51

Ageing with attitude: Planning for a good bill of financial health

As we age we can blame our hormones for everything, and this book suggests that in fact they play a crucial part in how we feel, but that we can control their effects by what we eat and drink.

The US author, a Harvard-educated physician, pinpoints the hormones cortisol, thyroid, testosterone, growth hormone, leptin, insulin, and oestrogen. 

She argues they are all affected by what we eat and that they govern how and where we store fat.

She claims that with her step-by-step programme we can grow receptors for our seven metabolic hormones, and in the process lose weight and feel lighter and more energetic in just 21 days.

Ageing Quote

Ageing is not lost youth but a new stage of opportunity and strength

— US feminist Betty Friedan

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