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Growth & Jobs | Plan for Retirement in 2018

Published:Tuesday | December 19, 2017 | 12:00 AM
Sharon Smith, senior manager with responsibility for the JN Individual Retirement Scheme at JN Bank speaks to members of the Non-geographic Formation Branch 02 of the Jamaica Constabulary Force during a financial planning seminar at the Knutsford Court Hotel in New Kingston last week.
Deputy Superintendent Renford Rowe makes a point to Sharon Smith (right), senior manager with responsibility for the JN Individual Retirement Scheme (JNRS) at JN Bank and Rose Miller (second from right), grants manager, JN Foundation during a financial planning seminar at the Knutsford Court Hotel in New Kingston last week. Also getting his attention is Superintendent Hillary Williams. Both Deputy Superintendent Rowe and Superintendent Williams are members of the Jamaica Constabulary Force's Non-geographic Formations Branch 02.

As 2017 draws to a close, the JN Group's pension and money management advisers are encouraging Jamaicans, especially those due to retire soon, to take preparation for their retirement seriously in 2018.

Speaking recently during a financial management seminar at The Knutsford Court Hotel in New Kingston, Sharon Smith, senior manager with responsibility for the JN Individual Retirement Scheme (JNRS) at JN Bank, urged Jamaicans to prepare for retirement now; and to implement good practices to manage their finances.

"Proper money management practices are an essential part of planning for retirement," she advised.

"You need to ensure that you are managing the money you earn in the best possible way. And, you must understand that your pension savings alone will never be enough for a comfortable retirement, unless you started with your first pay cheque in your early 20s, which most of us did not do," Smith advised.

She stressed that Jamaicans need to budget carefully and to ensure that they manage their retirement plan effectively.

"You should also increase your financial IQ; prepare a will; get solid advice from a good financial adviser; and take care of your physical and mental health," she advised.

With less than 10 per cent of the population having access to a pension on retirement, Smith underscored that if more Jamaicans plan for their golden years, families and the economy will benefit from their good habits. She noted that retirement planning reduces poverty, as persons who plan for their retirement do not become dependent on the State or family members to meet their costs.

A prudently managed pool of retirement savings can also be used by the Government to finance infrastructural projects to spur development and improve healthcare, she pointed out

"Retirement is not an age. It can come at any time in your life, because retirement is simply that time of your of life when you can no longer earn an income," the licensed pension adviser reminded Jamaicans.

She said, therefore, planning now for retirement is the best option.

Include real estate in retirement portfolio

Rose Miller, grants manager at the JN Foundation and financial literacy adviser, believes that preparation for retirement begins by managing one's income prudently.

She encourages Jamaicans to adopt the 10-10-80 rule to manage their income, which means: save 10 per cent; give away 10 per cent to someone in need, or to a charitable cause; and use the remaining 80 per cent to cover your expenses.

However, Miller advised that saving alone will not generate the wealth most people aspire to achieve, but it is a starting point which leads to investment, to gain higher returns.

"And, if you do not have funds saved, then you have nothing to invest," she said, underscoring the importance of savings.

In addition, people should also use their professional skills to earn additional income, she noted; and carefully invest in real estate, as well as a family indemnity plan.

"In your retirement portfolio you should have a pension plan, which gives you a monthly cheque from your employer; and you should include some kind of real estate, whether your home, or an expanded home to earn rental income," she advised

"And, also, the final item in your portfolio should be your National Insurance Scheme (NIS) benefits," she said, explaining that although NIS by itself is not enough to cover one's expenses in retirement, the twice monthly payments are useful for small expenditures.

Miller also recommended that Jamaicans spend more time reading and accessing financial empowerment information online, or seek out a financial adviser, to educate themselves about financial planning.

"It's education and information about money management that will help you to identify opportunities and prepare yourself to take advantage of them," she advised.