RETIREMENT PLANNING Why, When and some things to Consider……
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Transcript of RETIREMENT PLANNING Why, When and some things to Consider……
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RETIREMENT PLANNING
Why, When and some things to Consider……
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THE JAMAICAN LANDSCAPE
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Some Fun Facts•Total Population
2,700,000
•Working Population1,260,000
•Life Expectancy NowIF JUST BORN 73.0 YearsIF AGE 65 83.0 Years
•Private Sector Pension Planners
80,000
•Public Sector Pension Planners
240,000
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Jamaica’s Population Growth
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Trends
• Aging Populations• Increasing Life Expectancy• Challenging Economic Backdrop
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Aging Populations
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Aging Populations
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Increasing Life Expectancy
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Increasing Life expectancy
AS AT 2004 MEN LIVE TILL WOMEN LIVE TILL
AT BIRTH 71.26 77.07
AGE 40 76.86 80.45
AGE 60 80.45 83.45
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Economic Backdrop
• Inflation and worse…medical inflation• Savings and interest on savings…JDX• Limited access to public health care• Shifting social practices and expectations• Weak social safety nets
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Inflation and Worse….Medical Inflation
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Savings, Interest and JDX• Fall in interest rates of 4.5%
STRAIN ON PENSIONERS RELYING ON INTEREST FOR INCOME
•Reduced the life time of pensioners savingsSAVINGS PUT ASIDE FOR RETIREMENT NOW WILL NOT LAST AS LONG
•30% fall in retirement income that can be supported by workers pension savings for annuitiesTHE AMOUNT REQUIRED TO SUPPORT $100 OF RETIREMENT INCOME CAN NOW ONLY SUPPORT $70
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Limited Access to Public Health Care
• Translation ….expensive private care• Drug supplies relatively well supported through
JADEP and NHF• Hospital care is not well supported• Elective care means long waiting lists• Emergency care relies on availability of hospital
facilities
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Shifting social practices and expectations……
• Relying on children is a thing of the past…often not living in same country
• Shifting from extended family arrangement to institutional arrangements
• Growing need for affordable living options
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Weaker Social Safety Nets
• Weak economy vulnerable to shocks leaving limited funds for social protections
• Worsened by aging populations– Higher demand for medical– Less working population to provide support
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Retirement Planning
…..in the new reality
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Don’t panic
…..now you know what you are up against and so you know what to
prepare for
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What do you need to consider….
• How long you can or want to work to generate income• Lifestyle and quality of life as you age• Having a lifetime income• Protection against inflation• Emergency savings• Health coverage and wellness• Alternative living arrangements if healthy or if in need of
assisted living
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How do you see yourself living…..
DOIdentify your plans during your retirement
DO NOTIsolate yourself without occupation
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Lifetime Income
DO Purchase lifetime income protection
DO NOT leave lifetime income protection to chance
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Protection against inflation…
DOFind ways to hedge against inflation
DO NOTForget that purchasing power erodes with time
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Emergency Savings• Reduce your obligations to the minimum as
you move to retirement
• Maximize your savings and tax efficiencies
• Starting early allows for more interest build up….but…it is never too late….savings provide a cushion
• Make room for savings set backs
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Benefits of starting early
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Health Insurance and Health
DOKeep healthy
DO NOTWait to secure health insurance coverage
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Living arrangements
DO Match your housing to your needs and means
DO NOTKeep a big house just for sentiment
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In closing…..
• Living in an age of uncertainty• Changing and unpredictable landscape• Planning and minimizing uncertainty in retirement
key• If you have not already started planning…..
start NOW