Retirement Education Series - Developing a financial plan

Magdalena Cooper-de Neuze, Contributor

When a financial plan is being developed, it usually includes the obstacles which may be encountered; hence the prudent planner will include the strategies which should be employed to overcome these obstacles. However, many of us believe that the goal can only be achieved alone. Today's advertisements are all about 'my'. Don't be fooled into thinking that financial planning is only about YOU. Here's the great news, it's about the 'we' factor. Why? Because one or more of the three D's will impact your retirement plan: disability, death or divorce. There's a Jamaican saying which highlights the importance of the 'we' factor: 'one han caan clap'. The three D's are best overcome when there are strategies around a clearly defined 'we'.

Disability: This can be temporary, partial or permanent. Have you ever felt so ill that when someone visits you experience 'good health' in that moment of fellowship? Recovery from a disability is a team effort: 'we'. Even if you had maximum income to pay for medical treatment and other services, you will need someone to assist you through your period of disability.

Death: There's a saying in the insurance industry that 'life insurance is for the living'. The purchase of life insurance is not motivated by an 'I' strategy but the 'we' factor. The 'we' factor avoids one's assets being frittered away, and strategies will be put in place to provide enough liquid assets which pay for those final debts, provide an income for heirs, and there will be a properly executed will and/or trust.

Apart from individuals, persons who own businesses must also think of the 'we' factor. One such organisation that readily comes to mind is Jamaica Money Market Brokers (JMMB) ... everyone knows who Joan Duncan was. Clearly, her vision was not only a successful JMMB but it included the 'we' factor. The outcome is that not only her heirs have benefited but most importantly the people of Jamaica. A 'we' factor leaves no room for family squabbles over 'ded lef' but focuses on preserving the inheritance for future generations.

Divorce: When one gets married the minister usually pronounces that the two are now one. From here on, the parties should end their 'I' approach and start a new thinking towards life. Therefore, the word 'we' becomes a major factor in financial planning. When a marriage ends in divorce, some individuals see it as an opportunity to legally claim all the assets for themselves: a sense of 'I' satisfaction. Others see it as an opportunity to act in an equitable manner: 'we' factor. Even in divorce there's a 'we' factor which needs to be planned for, especially where children are involved.

Arguably, your financial plan does have an 'I' status but only as it refers to defining your responsibilities. Otherwise, it's the 'we' factor which makes planning worthwhile. In your retirement plan, have you identified who belongs to your 'we' category?

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