Othneil Blagrove, Senior Manager, Sales and Marketing, JN Life Insurance has urged Jamaicans to lessen their dependence on others when it comes to retirement planning and start preparing for their golden years by enrolling in approved retirement schemes.
Mr. Blagrove said the number of Jamaicans being eligible for a pension upon retirement is low, especially with the country’s aging population. He added that although there are more persons beginning to understand the importance of planning for retirement, there was still the lingering belief that children, or even the state were a part of pension planning.
“Some persons may say they have children who are doing well in school and so will earn a good income through their employment, it is not a wise decision, because you do not know if your children will be able to assist you when the time comes,” he stated.
“In fact, some may not even do so for whatever reason. Therefore, having a pension plan with an approved retirement scheme is important when it comes to retirement planning,” he said.
Mr Blagrove explained that outside of personal benefits, being a part of an approved retirement scheme is beneficial to the Jamaican economy. He said pensions provide a pool of long term funds which can be used to invest in public infrastructure, rural and urban development and ultimately, increases the wealth of the country. He added that retirement planning also required persons to have liquid cash during their golden years.
“Some persons may say they have invested in real estate, or extending their homes to be rented and others will say their parents have land so they can utilize it during retirement. Nothing is wrong with that, but is important that you have a source of liquid cash when you retire,” he added, pointing out that this would assist in times of emergencies.
Mr Blagrove noted that for those who contribute, there is the NIS benefit, but this amount would not be enough to give them a comfortable retirement.
“NIS benefits are currently $13,600 monthly which, based on cost of living is not enough to cover basic expenses. This means that there are many persons who will experience financial difficulties upon retirement, or forced to work again, for those who can, for additional income,” he said.
“Investment experts say you need 40 years or more to plan for your retirement. Consequently, if you are above a certain age and started saving in your later working years, it would be extremely difficult to almost impossible to save enough to live and enjoy the same lifestyle in retirement that you lead now because you would have lost some of the years needed to do that investment,” he explained.
He added that with life expectancy increasing, there was need to adequately plan for retirement.
“As more Jamaicans live longer, investment experts estimate that they will need to have enough money to live up to 15 years or more after retirement. Consequently, saving for retirement will ensure you are able to support yourself, as opposed to depending on others,” he stated.
