Start Pension savings early
Based on Jamaica's economic climate, your financial future can be difficult to predict. For this reason, persons young and old are being advised to start a pension plan as early as possible.
Saving is not a popular practice, especially with young persons. But with discipline, you can put aside a small portion of your income towards retirement.
For the past 15 years, Prime Assets Management Limited has been providing pension fund investment advisory services to a number of corporate entities in Jamaica to steer persons in the right financial direction.
Prime Asset Management Limited, in association with the Private Sector Organisation of Jamaica (PSOJ), recently held its eighth annual pension seminar to raise awareness on the importance of retirement planning for all Jamaicans under the theme 'Changing the Outcome: Bridging the Pension Gap'.
Keynote speaker Kelly Peters, chief executive officer and managing partner of BEworks Inc, of Toronto Canada, introduced, for the first time in the Caribbean, the concept of nudging as one tactic to increase pension participation.
Clover L. Moore, manager, public relations and corporate affairs at Victoria Mutual, noted in a press release that nudging, which has been embraced by British Prime Minister David Cameron, stems from the behavioural economics school of thought and is used to ensure that individuals behave in a certain manner.
According to the release,
"Nudging is centred on the belief that persons do not act in their own self-interest; however, humans can be easily swayed or undone by anxiety and are influenced by their biases and tend to be lazy, which results in individuals being more likely to choose a default option when the need to make a choice arises."
Peters continued with an analogy of a $5 cup of coffee. "If you purchase that coffee every day for a year, it will no longer be a $5 cup of coffee, but a $1,825 cup of coffee. That money could have been used for something more important."
Peters advised that the sooner young people start saving, the more you will save. In addition, pension payment should start with your first pay check. It won't be an easy decision at the time, but it is possible.
Easy ways to
Some will ask if there is really an easy way to save. Yes, even without your monitoring.
Since pension payment should start with your first pay check, a few persons are fortunate to have their place of employ making a contribution for them. This is usually five per cent of one's salary. Take things a step further: Make an additional five per cent payment.
Set up a standing order at the bank where your pay check is being sent for a monthly deposit for a saving scheme such as a partner plan or to an account to which you don't have access, preferably for a long period.
You can also download saving apps to help you monitor your account.