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Changing our Culture – Retirement

Today we live in a society where most people believe that you work until retirement age and the stop working and live off of your pension. This custom is not unique to Jamaica as a survey carried out in the United States some years ago found that 95 percent of Americans who retired had less than one hundred dollars in their bank account. However the reality of today’s world is that a pension is not enough to provide for retirement. This is more evident given that persons are living longer than expected. Advances in medicine have extended person’s lives and thus increased the amount of money needed for retirement. In Jamaica the situation is particularly grim for those whose only pension is the one provided by the National Insurance Scheme (NIS).

Another factor affecting the amount of money that a person has at retirement is the current law that allows a person to get back their pension contributions when they leave their employment. Most people simply spend the money either on paying their bills while trying to find another job or do not have the discipline necessary for saving. People often do not take into account that as they get older they are likely to need more medical attention and health services are extremely expensive. A major illness can use up all of one’s resources especially if there is no health insurance in place.

Adding to the problems of retirement is that many pension schemes have gone bankrupt. These schemes were badly managed and bought investments that were of very poor quality. There have been many cases worldwide where companies have invested the pension funds in their own stock and when the company went bankrupt the pension scheme was depleted at the same time. The laws in Jamaica have permitted companies to withdraw significant amounts of money from the scheme to the detriment of those who remain in it.

We can no longer afford to place our future livelihood in the hands of the government or the pension scheme to which we belong. It is time to recognize that we need to invest more of our resources while we are working to ensure that we can have a better standing of living when we retire. Make sure that you contribute to your pension scheme and that your NIS contributions are paid over by your employed. But in addition make sure that you are saving in other investments which can then be used to supplement your income when you retire.

It can seem like quite a shock to the system when we have to change our culture but I assure you it will be an even bigger shock to discover that we are unable to pay our bills when we retire. Don’t let this happen to you tomorrow, take action today.

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3 Responses to “Changing our Culture – Retirement”

BOB says:

October 30, 2010 at 5:43 pm

To me retirement is for those who are literally on their death bead!..
I would go insane if i was to followed the American system of retirement where one will have to depend on the state for funds to survive!..

i will only retire when I cant lift a straw any more!..
JB says:

October 31, 2010 at 2:33 pm

I feel that there is far too much money spent on lavish funerals, instead of spending on the loved ones such as children, left behind. When someone dies, the expectation is that, one can go to that person’s home get all the food and drink he/she wants. Some never even knew the person that died or even socialized with them. This is not paying respect, this is robbing the family in some way….because most of the time, the average person does not have it and they are left in debt. Com on people, wise up. Instead of seeing the mourning as a time to go get free food/drinks, think of what you can contribute, in terms of cash or kind. Even something from your farm will be helpful….Help each other up, not down…even in he presence of death.
George F says:

November 28, 2010 at 12:55 am

What I find as Jamaicans we sometimes pay too much attention to unimportant things. I’ll tell you what I mean. The single mother who puts herself in extreme debt to buy graduation gown for a child leaving primary or all age school when the child needs that money to bolster his or her sub standard education. She will borrow , throw partner,work extra hours just to put on a show. Then the families mostly the lowre class which can least aford it spends all they have on a casket and all that goes with it to make a big splash or show.They could put that money to more useful purposes for the living. My people don’t know much about money management. I have seen a survey done asking “the man in the street” questions such as:what is a fix deposit?. what is a unit trust? what is a mutual fund ? what are stocks and bonds? what is the effect of compounding? very few persons had any idea of these terms. You have to go up the ladder to those who had tertiary education specializing in finance to get a reasonable answer. But ask about Cash Plus and every hand is in the air to answer.A survey found that contributing $2000 annually from the age of 19 to 26 years and leave that to compound at a mere 8% and did no put another cent in he would have $1,552,739.35. Most people don’t think of the long term. This example is US$ the same principle by substituting say $20,000 per annum. Thats why Einstine said compound interest is the greatest miracle