Plan to build wealth

Plan to build wealth and provide for your future.

By Johnny McNamara, Director, MCN Associates

In order to build wealth it is vitally important that you put plans in place that will provide for your future needs both in the short term and in retirement. However, very rarely do people put adequate plans in place to ensure that their future needs are covered. Pension planning is a key component in providing for your future however, with all of the uncertainty that has been created in recent times, many people are now shying away from contributing to pension.

Once you break the habit of contributing to a pension on a monthly basis it is often hard to restart as there will always be some other need that comes up to cause you to delay. This is undoubtedly going to create a crisis in future years where the State will be under pressure to provide the old age pension.

To make matters worse, those people who are early in their careers and possibly have the greatest need to plan for their retirement and build wealth may not be contributing at all. The main reason for this is due to cash flow worries and fear of what the short term future holds

The most efficient ways to build wealth and provide for your retirement

While pensions are the most efficient ways to build wealth and provide for your retirement due to the tax relief, the fact that the pension is locked away until retirement means people naturally worry that they will need to get access to money before then. These are reasonable fears to have given the uncertainty in the economy and the rising costs of things such as children’s education however there are ways to manage this.

A great way to overcome this problem, is to start a savings plan in to which a regular monthly contribution is made.

Savings plans work in very much the same way as a pension plan in that you can invest in much of the same funds and on a very similar low cost charging structure. Therefore you will be able to take advantage of growth and the compounding effect of having the money invested just like you would through a pension.

Obviously you don’t enjoy the tax relief that you would with a pension contribution but neither are you taxed in the same way on accessing the money. The savings plan allows build a fund just like you would with a pension but the fund can be accessed in the short term.

It also means that you are not missing out on the years of investment that are so crucial to build wealth and fund for your future.

The savings plan allows you to get in to the habit of putting money aside each month while building a fund that can be accessed in the short term if and when the need arises.

The saving plan allows you to Build Wealth and plan for your future

Once you get used to having this regular amount of money going out each month it is then far easier to, at a suitable time in the future, redirect the money to a suitable pension plan and take advantage of the tax reliefs. This will mean that you have your short term needs covered through the funds in the savings plan which allows you to start providing for your longer term objectives.

By planning in this way, it will have addressed a number of areas which are key to planning for your future:

-          You will have become used to putting money aside each month.

-          You will have taken advantage of the compounding effect by having your money invested in the same assets as a pension.

-          You will have provided for any short term needs that may arise in the short term.

-          You will be building a fund for your retirement.

Please feel free to contact MCN Associates at any stage and we will be happy to assess your own situation and put together suitable plans for you and start to build wealth for your future