Finance: Making Your Money Work Harder

Kevin Gorman, Head of Financial Planning at Fairstone Tralee, says for those with significant cash savings or those approaching retirement, professional pension advice can ensure that money is not just preserved, but positioned to grow securely for the years ahead.…

For many people, savings left sitting in a bank account may feel like a safe option.

Yet, with interest rates still modest and inflation steadily eroding purchasing power, money held in deposits often fails to deliver meaningful growth. In effect, your savings could be quietly losing value over time.

Consider a simple example: €100,000 placed in a bank account earning little or no interest. With inflation running at 3% annually, the real value of those savings shrinks by about €3,000 each year.

While the balance on paper remains the same, the purchasing power behind it steadily declines.

This is why more individuals are looking at alternatives. The most effective way to counter inflation and put money to work over the long term is through investment.

Options such as equities, bonds, or property have historically provided stronger returns than cash savings, though they come with varying levels of risk.

Before considering any investment, however, there are key financial foundations to address. An emergency fund should be prioritised, ideally covering at least three months of living expenses.

This ensures that unexpected events, such as job loss or unforeseen bills, can be met without disrupting longer-term plans.

It is also important to set aside accessible funds for shorter-term goals, such as a wedding or home purchase, so that these commitments are not reliant on market performance.

Once these essentials are in place, longer-term savings — typically funds not needed for at least five years — can be allocated to investments designed to deliver growth.

While this introduces an element of risk, it also opens the door to compounding returns: reinvested gains generating further growth over time.

Savings accounts and investments serve different purposes. Savings provide security, liquidity, and protection under deposit guarantee schemes, but offer limited returns. Investments, by contrast, can carry risk but provide the potential for higher earnings and a path to long-term wealth creation.

Navigating this balance requires careful thought. Every investment decision should reflect personal goals, time horizons, and comfort with risk.

This is especially true when planning for retirement, where pension choices play a crucial role. Tax treatment, contribution structures, and fund selection can make a significant difference to future outcomes.

Seeking expert advice is essential. A qualified financial advisor can assess individual circumstances, recommend appropriate options, and provide guidance through market uncertainty.

For those with significant cash savings or those approaching retirement, professional pension advice can ensure that money is not just preserved, but positioned to grow securely for the years ahead.

• Fairstone Tralee is located at Beechgrove House on Strand Street. Please contact 066-7185723, email tralee@fairstone.ie or visit  https://www.fairstone.ie/location/fairstone-tralee-office/