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.