The Best Time to Start Was Yesterday. The Next Best Time Is Today.

Business owners are generally very good at investing in their businesses. A new employee, new technology, larger premises or additional marketing can all be justified because we can see the potential return. Investing in our own financial future is different: retirement feels distant, there’s always another priority, and the pension contribution can wait until next year. Then suddenly, next year has become five years.

It’s worth pausing on just how quickly that time actually passes. Brexit already feels like a different era, yet the referendum was ten years ago. The Suez Canal blockage, a single container ship jamming global trade for days, was five years ago. Time doesn’t announce itself passing; it simply blinks by. Don’t let 2026 become another year you look back on and wish you’d acted.

One of the most interesting lessons from Morgan Housel’s The Psychology of Money is that building wealth isn’t simply about intelligence or finding the best investment. Behaviour matters. Patience matters. And perhaps most importantly, so does time, which is where the power of compounding comes in.

Take €100,000 invested and achieving an average return of 6% per annum. After 10 years it would be worth approximately €179,000. After 20 years, approximately €321,000. After 30 years, approximately €574,000. The return hasn’t changed. Time has. That’s why starting early is such a powerful advantage.

But there’s a problem with constantly telling people to start early: what if you didn’t?

I regularly meet successful business owners in their 40s and 50s who spent the previous decade doing exactly what entrepreneurs are supposed to do. They built businesses, created employment, supported their families and reinvested profits to grow. Their business may now be successful, but their personal retirement planning hasn’t kept pace, often because they’ve quietly assumed the business itself is the retirement plan. Sometimes it is. More often, a sale takes longer, is worth less, or is more complicated than expected, and the gap only becomes visible once it’s close.

There is little value in looking backwards and wishing you had started ten years earlier. The more useful question is what you can do today, and for company directors, that’s where the mechanics of pension funding actually matter.

A company may be able to make significant employer pension contributions on behalf of a director. Under current PRSA rules, for example, an employer can contribute up to 100% of an employee or director’s emoluments without the contribution being treated as a Benefit-in-Kind, and within that limit the employer can claim a deduction in computing taxable profits. This can give business owners who started later a genuine way to accelerate the process.

There are also occupational pension arrangements where larger special contributions may be made to provide benefits relating to previous service, or to augment benefits already secured. Depending on the size and circumstances, the corporation-tax deduction for these contributions may need to be spread forward, with Revenue allowing for a maximum spreading period of five years. This is an important distinction: you can’t simply take ten years of missed PRSA contributions and automatically “backdate” them. The options depend on the pension structure, remuneration, service, existing benefits and the individual’s own circumstances.

Tax efficiency shouldn’t be the only consideration, either. Locking money away for retirement may be tax-efficient, but a business owner also needs adequate personal liquidity, emergency reserves, appropriate protection and sufficient capital within the company. Weighing all of that properly is really what financial planning is for.

Rather than starting with “what’s the maximum I can put into a pension,” I prefer to start with the bigger picture: where have you come from, where are you now, and where would you love to get to? Once we understand that arc, the gap between where you are and where you want to be becomes clear, and we can work backwards from it.

Starting early remains one of the greatest advantages an investor can have. But if you didn’t, spending another five years regretting it won’t improve the outcome. You can’t compound yesterday. But you can start today.

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This article is for general information only and does not constitute financial or tax advice. Pension and tax treatment depends on individual circumstances and may change.

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