How soon should you start saving for Retirement?

For many young people, retirement seems to be a long way off and so they fail to make the necessary preparations. The age for retirement in Jamaica is 65 years old. At what age though should you start saving for a pension?

Pension Plans

Well it is important to determine your situation, whether you are self employed or you have a tenured position in a company, it is important to know your pension plan. The National Insurance Plan or (N.I.S) is a monthly deduction from your salary, which adds up to your pension.

According to the information on The Ministry of Labour’s website,   “Persons eligible for Old Age Benefit, must have made the required number of National Insurance contributions and have stopped working.

A female who stops working before attaining age 60 or a male age 65, and does not intend to seek gainful employment, may apply to become a Voluntary Contributor until she/he reaches the age 60 or 65 years, respectively. A retired person may be awarded a pension or grant depending on the number of contributions made.”

Apart from age in order to qualify for a pension a minimum of 156 weekly payments with an average of at least 13 must be paid.  If the contributions are inadequate for a pension, a grant may be awarded provided the contributor had made a minimum 52 weekly contributions.

Benefits

Benefits are paid at the post office of the insured person’s choice or any national commercial bank.  Pensions are paid by pension order books, each of which contains 13 vouchers, each representing payments for two weeks. These amounts will vary but approximately they can range between $2000.00 to $4000.00.

Therefore it is important that this minimal amount is supplemented with another plan for retirement. There are several savings plan offered by banks and credit unions which target long term saving.  These plans are popular as they utilize attractive interest rates and offer consumers a wide range of options that suit their budget.

It’s a good idea to check around and ensure that whatever plan that you choose provides accurate support for your lifestyle.

So what’s a good age to start?

Well once you begin earning a salary, you automatically begin saving for the National Insurance Scheme, so that would be a good time to start.

Don’t let retirement catch you unawares! Start saving early  so that you can enjoy the retirement!

What’s your take on the issue?

Teri Ann Renee Paisley

Gleaner online writer

Tags: pension, retirement