Personal Development

The current crop of younger workers may not have access to a State pension comparable to today’s offering. With that in mind, Simon Shirley shares his tips to help you prepare adequately for retirement. The state welfare system in Ireland and other European countries provides the main or sole source of income for many in retirement. However, the long-term sustainability of these systems is questionable given countries’ enormous unfunded pension liabilities and future demographic challenges. This is known as the ‘pensions timebomb’. The simple reality is that the proportion of the population in retirement is steadily increasing. Recent projections highlight that, at present, Ireland has five workers (aged 15-64) for every senior citizen (aged 65+). By 2050, we will have only two workers for every one senior citizen. Over time, this trend will likely increase the percentage of State resources being spent on healthcare and pensions for older people, with potentially insufficient tax revenue from the working population to support this. To ensure an adequately funded retirement, individuals must pay attention to pension planning on a consistent, ongoing basis. Here are some of the key pension issues you need to know. How much money needs to be saved for retirement? The answer is usually between 25-35% of lifetime earnings. However, workers often ask how this level of savings can realistically be achieved even if employer contributions are paid into their pension plan. I suggest the following: Determine how much of your after-tax earnings you can afford to pay into your pension plan each month. The gross pre-tax contribution amount will be higher due to the tax relief that applies to pension contributions. Increase the contribution by between 1-2% of gross earnings each year, if possible. Depending on your age, this simple move could double – or even triple – the value of your pension plan at retirement. Also, consider paying bonuses or commissions into your pension plan (subject to annual contribution limits for tax relief). Where does the money go? Many pension plans hold hundreds or even thousands of individual investments worldwide to generate a return while reducing the risk of overexposure to any particular investment and/or region. The market value of these investments can fluctuate significantly in the short- and medium-term, and thus the value of pension plans can also fluctuate significantly. However, pension plans often hold investments for a very long period. Accordingly, short- and medium-term fluctuations in investment values in pension plans are less relevant for individuals who have ten or more years to retirement. Contributing to a pension plan is more of a marathon than a sprint. What happens to the money in retirement? The time we spend in retirement is likely to be at least half the time we spend working. However, many are unclear about what happens to our pensions when we retire. Here are the key things you need to understand: You do not have to stop working to withdraw money from your pension plan. In some circumstances, you can withdraw money from age 50 onwards. You can withdraw the money by making a lump sum withdrawal – most, if not all, of this lump sum can be tax-free. Then, spread out the balance to provide an ongoing income in retirement. This income is taxable, though many individuals in retirement have an effective tax rate of under 15%. If you die before retirement, the value of your pension plan will be used to pay benefits to your dependants/next-of-kin. If you die during retirement, benefits can continue to be paid to your dependants/next-of-kin, depending on the options selected at retirement. You may be able to withdraw money anytime on the grounds of serious ill-health. You do not need to live in Ireland to withdraw money from your Irish pension plan. For young Chartered Accountants, my general guidance is not to assume that the current level of State pension payments will automatically apply at retirement. The prudent approach is to begin a private pension today. Simon Shirley FCA is Managing Director of Simon Shirley Advisors and author of A Practical Guide to Pensions and Life Insurance.  

Ariful Bhuiyan ACA, Financial Accountant in Bank of Ireland Group, shares five tips on how to stay in the black and wait out a second lockdown. COVID-19 has already impacted business, education, health system, sports, entertainment, and environment. Moreover, it has left people worried about their current financial plans and how they should approach their day-to-day finances. Here are some smart ways you can manage your bank account during this crisis.  Suspend major spending If you were planning to buy a home or looking at purchasing an expensive car, this is not the right time. We don’t know when this pandemic will be over, nor where it will drive the economy. For now, it would be prudent to hold onto some of your savings to give yourself breathing room if any future uncertainty arises due to unemployment, illness, etc.  The best approach is to observe and react. For example, the property market can be volatile for the next few months, and you may benefit if the house prices fall in the future.  Reassess other expenses If you have cable service, Netflix, Amazon Prime videos, or any other streaming subscriptions, it is high time you look at which is best suited for you. For instance, if you are subscribed to a cable service just for sport, think about suspending your service as many sporting events will be on hold for the foreseeable future. It's also a good idea to check the phone plan and utility bills to see if these make sense for you and your family. Look for better offers from competitor companies.  No panic buying With Christmas right around the corner, you might be tempted to jump in and buy all your gifts right now – and this is reasonable given that shops will be closed until the beginning of December. However, when people panic buy, they can check out before they even realise what they are buying or for who. Does Aunt Mary really want a shawl, a bath bomb and wool slippers – or were they the first thing you saw online and put straight into your basket? Make considered purchases. Improve your saving profile and invest in undervalued stocks Most of us would have booked holidays and parties over the summer if the situation were normal. Due to the lockdown, many have been lucky enough to save some extra money.  Try taking advantage of the situation by building your saving profile. If you are continuing to work and earn your full income, it is a good opportunity to buy undervalued stocks. The valuation of many companies went down in April/May, and there is a chance that it may fall again in the coming months due to the surge in numbers. Take suggestions from the brokers and invest in some companies to make a good return in the future.  Avail of the reliefs available to you The government has implemented financial relief for people and businesses. Keep in mind that you might be using utilities for work purposes. It was just announced in Budget 2021 that some of these employment costs could go towards tax credits. 

Accountancy Ireland Extra has partnered with the team at SpunOut.ie to bring you some top nutrition tips for the exam season. Eating well is good for both your mental and physical health. When it comes to exams and studying, you want to be at your best – that means eating the right foods to ensure your concentration levels are where they need to be. We have put together some tips to ensure that you can eat your way to exam success. Avoid skipping meals No matter how rushed you are, try to avoid skipping meals – especially breakfast. Starting your day with breakfast gets your body going and maintains your concentration for the day. Eat plenty of fruit and vegetables It might sound like hard work, but try to add fruit or vegetables to every meal if possible. Simple ways to increase your fruit and veg intake include smoothies, adding banana to toast, and adding fruit to porridge or breakfast cereals. Drink plenty of water Try to drink eight glasses of water per day to keep your body hydrated. By drinking enough water, you’re also less likely to be hungry. If you’re not a fan of water on its own, add a sugar-free diluted squash. Opt for healthy snacks It can be tempting when studying to reach for unhealthy snacks. Snack foods such as cakes, biscuits, chocolate and sweets can be high in sugars and saturated fat, and low in certain vitamins and minerals. Instead, keep fruit such as apples, blueberries or bananas on hand for those moments you need a snack. Check out our article on swapping your favourite snacks for healthier alternatives. Wholegrains The brain cannot function without the right energy, and it needs a constant supply throughout the day to ensure it functions correctly. Achieve this by eating wholegrains with a low glycaemic index (GI) such as brown pasta, brown rice or brown bread. Things to avoid… Avoid sugary snacks as they will result in a short-term high that will eventually come crashing down, leaving you feeling tired. Don’t overdo the caffeine. Coffee and soft drinks such as Diet Coke may give you a short-term energy boost but in the long run, it will result in an energy crash that just isn’t worth it. Avoid energy drinks like Red Bull, as they will result in a caffeine and sugar rush that won’t do your body any favours. And lastly, when you’re studying, alcohol is not your friend. It will dehydrate you, disturb your sleep and wreck your concentration the next day. Not worth it! This article was produced by Spunout.ie, Ireland’s youth information website. Five great brainfood-based snack ideas The last thing you need right now is to spend time researching what to eat in the run-up to your exam, so we’ve done the hard work for you! Here are our favourite brain food snacks, all of which are quick and easy to prepare... Hummus and carrot/celery sticks. You could make both from scratch or – to save time – pick up the end-product in your local supermarket. Apple slices with almond butter. The latter can be pricy but you’ll pick up a bag of apples for less than a euro, so it all balances out. Natural yogurt with chia seeds, banana, blueberries and nuts. This can also be a full breakfast, but it’s a superfood bonanza for the brain. Smashed avocado on wholegrain toast. A big snack that’ll keep you going for a couple of hours. Dark chocolate. A daily portion of dark chocolate has been found to improve blood flow to the brain, so treat yourself!

Sometimes you are presented challenges where you find you cannot cope. While we might not be able to change the amount of work that has to be done in a day, we can change how we react to it. I describe stress as being the scenario where the challenge you are facing seems to exceed your capacity to cope. We can feel threatened, overwhelmed and like we’ve lost control of the situation. While it seems odd to be sitting here writing about stress when it’s a warm, sunny summer’s day outside, stress doesn’t take the summer off. Learning how to deal with stress is a year-round task. The day from hell To illustrate an overwhelming challenge and our difficulty in coping, I thought we’d start with a really difficult day in work – the day from hell. While a small amount of stress can be a good thing – it provides a sense of urgency and it gets us moving – this is bigger than that. It took off like an out-of-control rocket, we are being pulled beyond ‘useful stress’ into a more manic orbit, and we end up in the ‘too much to cope with’ zone for too long.  When this happens, we lose three things: energy, short-term memory and the ability to problem solve or think creatively. We become quite primitive and it feels like we are in survival mode. We just want to survive the meeting, the phone call, or the afternoon. In summary, ‘stress eats energy’. 60-second recovery In reality, there’s very little we can do about the pace of a really hectic work day but we can do something about our response to it. For this, discipline is our most useful strategy. For those days from hell, we need to build ‘recovery breaks’ into the day. It only needs to be about 60 seconds, but – and here’s comes the discipline – the break should be once per hour throughout the day. Discipline eats stress Here’s your challenge: take a deliberate recovery break for one minute out of every 60. This will require a certain amount of discipline and mental toughness. In fact, you should be doing this even on good days. Remember, you’re doing this to ensure that you stay mentally fresh for as long as possible throughout the day. You are also doing this to ensure that you leave work with energy for what’s after work – life! When you create this discipline, and you stick with it for a week, it means you have energy to burn at the weekend. Otherwise, you spend that downtime in survival mode, dreading the return to work the following week. Recovery actions What do you actually do for the 60-second recovery? That depends on what you need. Sometimes it will be something simple that gives you a sense of control back, other times it will be something that slows down your mental traffic, and other times it will be something that energises you. Here are some examples: tidying, filing, reading, chatting, stretching, walking, improving your posture, and, the best one of all… breathing. Increase capacity If you’ve been following my well-being series, you will have come across  references to mental fitness. I am in the fitness business and fitness is about increasing capacity. Stress management is not about reducing stress in work and life, it is about increasing our capacity to cope with whatever is coming next. And when it comes to increasing capacity, discipline is your best friend.   Physical is the new psychological As you can see from the above, almost all of the strategies for stress management and mental health are physical and not always mental. It’s always beneficial to go out do something. Your body has the answer: calm the body and the mind will follow. Stopping is not recovering Leaving work and going home does not count as recovering. If you just crash into bed, you will still feel exhausted in the morning. Doing something that absorbs you – that energises you – is recovering. Finding the discipline to go for a short walk rather than watch television is recovering. Going to your yoga class is mental toughness and recovering. Remember: discipline eats stress. The key to resilience is working really hard, stopping, recovering properly and then working really hard again. Work success So far in this series I have been focusing on an operational level – how to have high self-worth, how to operate on the edge of comfort, how to have great habits and how to manage stress better. In the remaining two articles, I will be taking a more strategic approach.  See you then.

Anxiety can strike anyone, anywhere and at any time. With exams just around the corner, here are some tips to help you keep anxiety at bay and – should you need to – deal with an anxiety attack when it arises. Words by Dawn Leane “His palms are sweaty, knees weak, arms are heavy; there’s vomit on his sweater already, mom’s spaghetti; he’s nervous, but on the surface he looks calm and ready to drop bombs; but he keeps on forgetting what he wrote down...” Ok, so you’re facing your professional exams, not a rap battle… but under certain circumstances, anyone can be visited by anxiety and panic. A healthy lifestyle and good study practice are essential in the lead-up to the exam. On the day of the exam, however, apart from a few practicalities, your psyche is really the only thing within your control. Anxiety causes cognitive processes to believe negative self-talk such as “I haven’t done enough”. In such a scenario, a cycle of physical reactions and heightened anxiety quickly becomes established. This cycle can be broken with practised interventions and it’s important to prepare these in advance. These strategies can be carried into your future career and will benefit you in interviews, presentations and public speaking. Before the exam On the day of the exam, avoid studying any new topics as this may impair your ability to remember what you’ve learned. Don’t study for the last hour before the exam and most importantly, keep away from other anxious people. Take a bottle of water, some nuts or fruit, and a slow release carbohydrate into the exam. Avoid sugary snacks that will lead to a quick high followed by a slump. In the exam hall It’s natural to feel nerves prior to starting the exam, but excessive nervousness is counterproductive. Give yourself time to settle and use a breathing exercise to calm yourself before you turn over the exam paper. Take time to read through all the questions and instructions carefully. Make sure you get a firm grasp of the questions and what’s required of you. Then, prioritise what needs to be done, divide your time according to the importance of the questions, and answer the easiest questions first. This will guarantee marks in the least amount of time and help build your confidence. Don’t rush through the exam and regularly check the time. When anxiety strikes… If panic sets in or your mind goes blank, close your eyes and take several long, slow and deep breaths. This will help calm your entire nervous system. Then: Identify the feeling and own it; remind yourself that your panic will end; Set aside three minutes to divert your attention away from the panic; think about something unrelated to the exam; Use the mini-relaxation exercises you have been practising; Think positive and repeat coping thoughts such as, “I know I can deal with this”;  Remind yourself of a similar situation which you survived; Remind yourself of your past successes, especially exam achievements; and Visualise yourself feeling more relaxed and able to get through the questions. If you still can’t remember the information, then move on to another question and return to this question later if time allows. If you feel unwell, on the other hand, call the invigilator. They are there to help you and are experienced in dealing with such situations. And remember, it’s only an exam! Of course you want to do well, but it’s not a life or death matter. In fact, resilience is a key component of leadership. Behavioural psychologist, Albert Bandura, suggests that “if people experience only easy successes, they can come to expect quick results and are easily discouraged by failure… the route to high attainments is strewn with failure and setbacks. Success is achieved by learning from mistakes.” If you suffer from anxiety, cognitive behavioural therapy (CBT) can really help. Further information and support is available from Reachout, Spunout and Chartered Accountants Support. Dawn Leane is Director of People and Resources at Chartered Accountants Ireland and Coordinator at Chartered Accountants Support.