Category Archives: Retirement & Estate Planning

How to Work Less and Earn More

With some amount of trepidation, you decide that you’re finally going to get a grip on your budget. Armed with months of bills and receipts, you painstakingly recreate an outline of your spending plan for the year. After adding up all your expenses, you’re shocked to see that the total monthly income needed to finance your lifestyle is way in excess of your current earnings.

“That explains why I’m so dependent on my credit cards every month,” you mutter to yourself. “I’ve got to reduce these expenses if I’m ever going to get out of debt.”

Determined to cut back all unnecessary costs from your overblown budget, you examine each expense category for items that you can do without. Unfortunately, your search reveals that you already exist on the basics – any reduction will only lead to deprivation for you and your family.

Frustrated by your budget-trimming attempts, you decide to take a hard look at the income side. “My salary is just not enough,” you admit. “What I need is a way to make some more money.” Continue reading How to Work Less and Earn More

Saving for Retirement in Jamaica

Last week we examined the high cost of retirement and calculated the amount of savings that would be required to replace your income when you choose to stop working. Although cash is tight in today’s economy, if you delay putting aside some of your money for your retirement needs, it will only cause you more financial distress in the future.

Let’s look at some of the options which can help you to achieve your retirement nest egg targets:

Employer-Sponsored Pension Plans

Pension plans, also called superannuation funds, are retirement saving schemes which businesses voluntarily set up for their employees. Larger workplaces usually offer pension plans, whereby both the employer and the worker contribute funds to create a retirement lump sum for the employee. Staff members are required to put aside at least five per cent of their salary into retirement savings, and this figure would be matched by the employer. Continue reading Saving for Retirement in Jamaica

Is it Practical To Plan For Retirement?

As it becomes increasingly difficult for many companies to finance workplace pension plans, and more persons join the ranks of the self-employed, the number of Jamaicans who are currently investing towards their retirement years is woefully inadequate.

Studies indicate that private pension arrangements are now covering some 60,000 persons of the approximately 1.3 million people in the labour workforce in Jamaica. This means that only about one out of every 22 persons contributes to a savings plan that will help to replace their income when they can no longer earn a living or choose to stop working.

This is a startling statistic, as it indicates that many persons may not have considered the necessity of planning to create an income for their later years. Continue reading Is it Practical To Plan For Retirement?

How To Maintain Your Money

Why do some people achieve long-lasting financial success while others struggle with money for their entire lives? After years of seeking the answer to this mystery, I have discovered that the route to prosperity lies in the knowledge and application of some basic principles that govern money.

We have been examining the three tenets of money success – managing, multiplying and maintaining your money. After making smart use of the money you already have and making determined efforts to earn more, the final key is making plans to preserve your wealth for your lifetime and beyond.

Here are the four essential steps to maintaining your money: Continue reading How To Maintain Your Money

Get Ready to Retire!

“I’m going to retire after working for over 40 years and I’m feeling a little anxious about the future. The way how prices are rising now, I wonder if I’ll be able to survive on my pension. I don’t have any children and I worry what will happen to me if I run out of money.”

Retirement is a big lifestyle change that can bring some amount of anxiety about your financial future. To reduce your apprehension, you have to learn how to assess your spending needs and to calculate if your planned income will be enough to meet them.

If you’re approaching retirement, here are some key considerations that will help you to be fully financially prepared:

How much money will you need to spend each month?

It’s very important to know exactly how much money you’ll need to meet your expenses during retirement. Spend some time to create a realistic budget of your expected income and expenses. Writing these figures down will let you identify if you’ll have enough money to pay your bills, and it will help you to make decisions about how to distribute the money you have. Continue reading Get Ready to Retire!

Passing on Your Money

“Don’t cling to fame. You’re just borrowing it. It’s like money. You’re going to die, and somebody else is going to get it.” – Sonny Bono

Last week we looked at the harsh reality that regardless of our current financial position, one day we will all pass on and leave our earthly possessions behind. Whether the transition of our assets is smooth or chaotic will depend on what plans we have put in place for them while we’re alive.

Although we may not like to think about it, estate planning is an important part of managing our finances. It involves making provisions to administer and transfer our money and property when we have died, so that our wealth is preserved and passed on according to our wishes. Continue reading Passing on Your Money

Till Death Do Us Part

“…to have and to hold from this day forward…to love and to cherish, till death do us part…”excerpt from the Book of Common Prayer

This quotation is taken from the rites for the celebration and blessing of a marriage ceremony. Although the words herald the official union between a man and woman, in some ways they also speak to the relationship that we may have with our money.

For some people the acquisition of money is a passionate pursuit. Once it has been attained, their wealth is paraded like a beautiful trophy wife. Their possessions are held very close to their hearts, and this love affair lasts throughout their lives. Unfortunately this wedded bliss is only for a time, as in death they must part ways with their money.

The reality is whether we have lots of money or very little, whether we hoard money or pass it on charitably, death will come to take it away from us all. While we may physically leave this earth, our wealth usually remains behind, and it makes sense to make proper arrangements to distribute it when we are gone. Continue reading Till Death Do Us Part

Creating Retirement Business Income

Over the past three weeks Your Money has been focusing on retirement planning: helping you to figure out how much money you’ll need to retire comfortably, explaining methods of saving for your nest egg, and hopefully imparting the urgency of starting a retirement plan sooner than later.

Saving a large enough lump sum to meet your retirement income requirement is easier accomplished when you begin saving at an early age. Unfortunately, the reality is that most of us postpone thinking about retirement planning until we’ve bought our own house or sent the children to college. Then, as age 60 looms closer, we start to seriously consider exactly how we’re going to afford to stop working.

Let’s look at a typical scenario of someone who is faced with the harsh reality of retirement costs. Forty-year-old Teresa wants to invest towards a retirement nest egg that will be available when she is 65. Continue reading Creating Retirement Business Income

Getting Real About Retirement Savings

Are you currently saving towards your retirement? If your answer is yes, do you know how much money your pension plan will provide when it’s time to retire? If your answer is no, do you have any idea where you’ll get money to meet your expenses when you’re too old to work?

If you’re worried about your responses to the questions above, it’s time to take a serious look at saving for your future: it’s time to get real about planning for your retirement.

Many Jamaicans have a high propensity to spend, living for immediate gratification with little thought for the future. Some of us would not blink an eyelid to spend J$500 on a fast food meal, but would be hard-pressed to put away that same J$500 into a consistent savings programme.

Some of us have a ‘No Problem, Man’ attitude, where we figure everything will work out just fine eventually. We presume that our children will take care of us when we get old; that we will be able to work forever; or that one day the lottery will come to our financial rescue. Continue reading Getting Real About Retirement Savings

Building a Retirement Nest Egg

In last week’s column, we looked at three retirees who had not made adequate financial plans to ensure that they could enjoy their golden years. To achieve a financially stress-free retirement, you have to create a proper strategy to replace your working income while you’re still employed.

One of the ways to generate retirement revenue is to invest over time to build a nest egg that will eventually provide the income you’ll need. Planning for an event that’s far in the future is not a simple process, so you must seek advice from a financial advisor. Here’s a look at what the retirement planning process entails:

Step 1:   Establish the Planning Parameters

The advisor will need to know your current financial situation in order to estimate the cost of your desired retirement lifestyle. Experts usually approximate 70 percent to 80 percent of your present expenses for retirement income needs; as some costs such as children’s bills, mortgages and car loans should hopefully gone at that time. Continue reading Building a Retirement Nest Egg