Look back at your salary from five or ten years ago and the difference could be striking. A move into management, a few good bonuses or a share award can change your financial position considerably.
What doesn’t always change is the thinking behind it. You might still be paying the same percentage into your pension, leaving substantial savings in a bank account or keeping every company share that vests.
None of those choices is necessarily wrong. But they may have been made at different stages of your career, without much thought about how they work together today.
For higher earning professionals, wealth management becomes less about individual accounts and more about how savings, pensions, investments and family commitments fit together.
Where Does the Extra Income Actually Go?
A pay rise can be surprisingly easy to absorb. The mortgage is larger than it used to be, perhaps, or family expenses have increased. What once felt like a significant jump in income soon becomes the amount you expect to see each month.
Enjoying that extra financial freedom is part of the reward for doing well. It’s still useful, though, to know what has happened to the difference. How much of your recent pay rises has gone into regular spending, and how much has helped you build savings for the future?
Bonuses deserve a decision of their own. You might use part of one for something enjoyable and put the rest towards your pension, mortgage or another priority. That’s easier to do before the money has quietly become part of your everyday spending.
The Pension You Haven’t Looked At in Years
With pensions, doing nothing can sometimes feel like doing the right thing. The contribution leaves your payslip every month, your employer adds its share and you receive a statement now and again.
But the details deserve a look. You may have several old pensions from previous jobs. Your investments could still reflect choices you made in your 20s or 30s, and you may never have worked out what income you’re likely to need when you stop working.
Before moving or combining pensions, check the charges and benefits attached to each. The option that appears simplest isn’t always the best, especially if an older arrangement carries valuable benefits that could be lost through a transfer.
For higher earners, tax relief is another consideration. In Ireland, Income Tax relief on personal pension contributions is subject to limits based on your age and an annual earnings cap of €115,000. If you earn considerably more than that, the cap matters when deciding how much extra to contribute.
The aim is to know what your pension is on course to provide, rather than relying on the fact that contributions have been happening for years.
Company Shares Need Their Own Plan
Share awards are another area where a successful tech career can complicate the picture. Restricted stock units (RSUs), share options and other equity arrangements may form a valuable part of your remuneration package, sometimes more valuable than you expected when they were first granted.
The difficulty is that a growing shareholding can leave your salary and a sizeable portion of your assets dependent on the same employer. There are also the rules around vesting, selling and tax to deal with.
Before simply holding on to your next award, there are a few questions worth asking:
- How much of your wealth is tied to one company? If a large part of your investments depends on your employer’s performance, you could be more exposed to changes in its fortunes than you realise.
- Which shares can you actually sell? Unvested awards aren’t the same as shares you’ve already received, and trading restrictions may apply even after vesting.
- What tax might be due? The treatment of RSUs, share options and other awards varies. Further tax may arise when shares are sold, depending on the gain.
- Could the money be more useful elsewhere? Selling some shares may provide an opportunity to diversify your investments or fund another financial goal.
There may be good reasons to retain your company shares. Equally, holding every award without considering your wider financial position is a decision in itself.
How Much Cash Is Enough?
There’s a certain comfort in having a healthy bank balance. The money is available when you need it, and you don’t have to worry about daily movements in investment markets.
That matters if you’re planning a house move, renovation or a period away from work. Savings set aside for those purposes need to be accessible when the time comes.
The Competition and Consumer Protection Commission’s guidance on investment readiness recommends having emergency savings covering at least three months of living expenses before investing. Some households may need a larger buffer, depending on their circumstances.
Once you have that covered, the question changes. How much of the remaining money will you need in the next couple of years? How much could stay untouched for longer?
Inflation can gradually reduce what cash will buy, while investing brings the possibility of losses, fees and tax. Finding the right balance depends on your plans and how comfortable you are with investment risk, rather than simply how much is sitting in your account.
Check What Your Employer Actually Covers
A generous salary often comes with a good benefits package, but it’s easy to assume the protection is more comprehensive than it actually is.
Income protection, for example, usually replaces only part of your salary and may not begin paying immediately. Death in service cover could provide a valuable payment to your family, but it’s generally linked to your employment. Change jobs and the terms may change, or the cover could end altogether.
If your household depends heavily on your earnings, take a look at the actual policy details. Waiting periods, exclusions and the amount insured matter more than the headline list of benefits in your employment contract.
You may already have sufficient protection in place. The important thing is knowing what would happen if you were unable to work, rather than finding out when you need to make a claim.
What Do You Want Your Money to Make Possible?
Eventually, it helps to stop thinking in terms of individual financial products and ask what you’d like your money to achieve. The answer may have little to do with retiring at a particular age.
You could be working towards:
- Working fewer hours: Moving to a four day working week later in your career without a significant drop in your standard of living.
- Becoming mortgage free sooner: Reducing your monthly commitments and giving yourself more financial flexibility.
- Supporting your family: Helping children with university expenses or a deposit for their first home.
- Having more career choices: Building enough financial security to take an extended break, change direction or start your own business.
Each of these ambitions comes with its own timescale. Money you hope to use in three years calls for different decisions from savings intended to support you decades from now.
Getting specific about your priorities gives you a better basis for deciding what to save, where to invest and which financial commitments deserve attention first.
Make Your Financial Progress Count
None of this means you need a new pension, another investment account or a complete change of direction. A worthwhile financial review may simply confirm that much of what you already have is working as intended.
Rockwell Financial works with senior professionals and executives across Ireland, helping them assess their pensions, investments, financial protection and wider plans for the future.
You’ve put years of effort into advancing your career. Giving some attention to what those earnings are making possible outside work seems a sensible next step.