How (and when) To Start Planning For Retirement (Part Two)

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Remember when the age 60 was practically a manifesto that a person was to be put out to pasture? This was in our grandparents’ time, when a few years after retirement it wasn’t strange to find a retiree had passed on. Aren’t you glad those days are gone? There are countless role models we know in their sixties. Take, for instance, bankable celebrities like Oprah, Denzel Washington, Eddie Murphy, and the iconic model Beverly Johnson. And I’m sure you know other people in your real life who are members of that very active over-60 club and are showing no signs of slowing down. As some of these people will tell you: Age is really just a number, and it is a youth-obsessed society that thinks that older people have outlived their usefulness.

And yet there are so many people who are terrified of ageing. Which is one of the reasons why they don’t like to speak about retirement. They see this period as one of uncertainty, especially as it relates to income. Without a guaranteed monthly salary, how will they survive? Especially in the cold light of inflation, which is already robbing said pay cheque of value.

As per a United Nations life expectancy outlook, the average life expectancy of a Jamaican is around 75, provided that individuals manage their health, and so on. It is certainly possible to exceed that projection. The fact is, life expectancy has been steadily increasing globally due to, among other things, improved access to medical care, sanitation, housing and education. So, if a person decides to retire at the age of 60, or 65, which is the recognised age of retirement here, there is a distinct possibility that that person can be looking at many years living without the cushion of a monthly pay cheque. This can fill many pre-retirees with dread, especially if they keep delaying planning for retirement.

Returning to the workforce

We have already spoken about retaining the services of a financial advisor to start you on a path toward serious saving if you haven’t already done so, by way of a diversified investment portfolio, which simply means that you reduce your risk of a cracked nest egg in your retirement years by having a collection of investments, like stocks from different industries, risk profiles, and countries — not just Jamaica — bonds, commodities and real estate in order to earn money on your money.

A nest egg in your golden years is not an unattainable goal if you start planning now, to give your savings time to grow and earn dividends.

But what if retirement is imminent, and you don’t have 10 years in which to earn significant dividends on your investments?

An option that many retirees are exploring is returning to the workforce while growing their savings and investments so they can live comfortably later. Maybe it’s not even about the money; rather, you might not have close family nearby, and the thought of living in an isolated way is unappealing to you. Why not kill two birds with one stone? Continue earning even whilst alleviating potential loneliness.

More retirees are feeling young for longer and so are returning to the workforce more than ever before. At your workplace, would they be willing to bring you back as a part-time freelance contractor? Or is there a company that would be interested in employing you in a consultancy role that you can apply to? After all, with your years of experience, there is much that you can impart to a younger generation of workers.

Work for yourself

What about a side hustle, project, or a hobby, really, that you have been contemplating turning into a business? Let’s say you’re passionate about plants and have a green thumb and are always helping your friends with restoring their orchids. From the comfort of your backyard greenhouse you can parlay a hobby into something that has the rewarding benefits of earning you a living on your own terms.

Options abound. Formulate a plan now rather than sit frozen in fear about the future.

Bottom line

The time to think about your retirement is now, regardless of your age. The time goes quickly by and all too soon you’re staring down your golden years. But you have the power to not be forced into deciding when you should stop working if you’re not ready. The Government can prescribe a certain time that you should leave the workforce, but it is up to you to decide if you’re ready or not and creating the terms under which you decide what you want to do. But, also, don’t let fear of your financial future catapult you into staying longer than you want to. After retirement, life goes on and financial options are yours for the choosing. If you haven’t already, start saving today so that you will be ready when that golden time of your life occurs and you can do the things you truly want to.

Lamar Harris, vice-president, wealth management, NCB Capital MarketsRLA