Educate Jamaicans about importance of retirement planning

OTHNEIL BLAGROVE, senior manager for sales and marketing at JN Life Insurance, wants more to be done to educate Jamaicans about pension planning, especially among those who are self-employed.

Blagrove said that with the number of Jamaicans being eligible for a pension upon retirement being low, especially with the country’s ageing population, more education is needed.

“Investment experts say you need 40 years or more to plan for your retirement. Consequently, if you are above a certain age, no matter how much you save now, you will never be able to live 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.

“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.

Blagrove explained that outside of personal benefits, being a part of an approved pension scheme is beneficial to the Jamaican economy. He said pensions provide a pool of lon-term funds which can be used to invest in public infrastructure, rural and urban development, and ultimately, increases the wealth of the country.

He also underscored the need for persons who are planning for retirement to ensure they had a ready source of funds to cover their daily expenses.

“You may be saying that I have just paid down on a house and I am going to put a room to the back. Or you might say, mommy or daddy has a piece of land and I’m going to build something on it, and that is my retirement. Nothing is wrong with that, but it 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.

The senior manager maintained that currently, approximately 40 per cent of Jamaicans are self-employed, with many not being contributors to the National Insurance Scheme (NIS). He added that many self-employed persons were at risk of their lives being plunged into poverty in the event of an injury or other circumstances.

“For example, some self-employed persons may find that the profession they are involved in is not that welcoming of mature persons, and younger clients are not keen to utilise their services. In all cases, it’s not because they will lack the skill, rather, there is the perception that a person at that age may not be in touch with the latest trends. Consequently, there is the possibility that that person may be forced to retire before 65,” he added.

Blagrove further noted that for those who contribute to the NIS, there is a pension benefit, but this amount would not be enough to give them a comfortable retirement.

“NIS benefits are currently averaging $13,600 monthly which, based on the 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.

He therefore urged Jamaicans to educate themselves about pension and become enrolled in a pension scheme.

“Retirement planning is not ‘ole people suppen’. Also, neither is it a monthly stipend from your adult children when you are no longer able to work. Retirement is a lifelong decision to save and invest smartly so you can enjoy your golden years. And, while some people start later in life, you can start planning for retirement right out of university, or even high school – and you should. Therefore, I urge Jamaicans to educate themselves about retirement and plan adequately for it,” Blagrove urged.