“After working for over 36 years in the civil service, I’m going to retire in a few months time. I feel a little confused about how to make sure my retirement money is properly invested. I’m also scared that my pension and savings won’t be enough for my needs. What can I do to feel more secure in retirement?”

In theory, retirement should be a time to relax and enjoy the fruits of your labour. In reality, many persons face retirement with fear, wondering if this change of life will bring better or worse.

One of the biggest sources of concern for retirees is the uncertainty about money- how will they survive without a steady paycheck?

Financial experts tend to give lots of advice on how to plan towards a successful retirement. But what about managing your money in retirement? How can you take control of your funds and be free to enjoy your new-found leisure time? Here are some steps that will help to put you in charge of your finances.

Prepare For Your Pension

Don’t wait for the last minute to make sure that your pension is in order. It’s advisable to apply for your retirement benefits one year in advance, since you work in the government service. This will ensure that as soon as your paycheck stops, your pension will take over.

If you had invested in retirement insurance plans, speak to your agent several months before retiring, to ensure that your investments are on track. If you had been contributing to the National Insurance Scheme (NIS), visit the NIS office at National Heroes Circle to apply for your benefits.

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Budget Carefully

Budgeting is the key to managing your retirement money. It’s important to keep track of your monthly expenses, especially when you’re no longer working. Estimate those inevitable costs like car insurance and repairs that don’t occur regularly, and divide these figures by 12 to get the average monthly cost.

Place spending limits on variable expenses like clothing and entertainment. Make large allowances for medical needs that may increase at this time, and include additional expenditure for healthier foods and vitamins.

Your objective in preparing a budget is to calculate the average amount needed to pay your expenses each month. When you are clear about this figure, you will know if your pension will be sufficient, or if you will need to supplement it with your investments.

Match Your Investments To Your Needs

One of the most important objectives in retirement is the need for current income and liquidity. Your money must be providing steady returns, and should be readily available for any emergency.

If you have problems meeting your monthly bills, it might be advisable to sell any long term assets like land or stocks, and place the proceeds on an account that will pay interest. Speak to your financial institution to get guidance on how to re-balance your investments.

You will also want to invest in low-risk products that give higher returns than regular savings accounts. Once you have identified how much you will need for your monthly expenses, ask your advisor to show you how best to invest your money so that you can get enough interest.

Seek Tax-Free Returns

After years of paying taxes the last thing that retirees would want to do is to continue paying withholding tax on their savings. The government has made allowances for senior citizens to have taxes on income and savings exempted up to certain limits.

Currently there is an automatic exemption of J$193,440 per annum once you are retired, an additional J$45,000 per annum if you are over 65 years old, and a further J$45,000 per annum if you are a pensioner.

Call the Taxpayer Audit and Assessment Department at 922-3470 or visit your nearest tax office for details on the documents you will need to apply for a tax exemption.

Apart from applying for tax allowances, you can also invest in tax-free accounts. Everyone is entitled to invest up to J$1 million each year in a tax-sheltered account and receive interest free of withholding tax.

These investments have to be held for five years to be tax-free, but you can take 75 percent of your interest periodically. The additional 25 per cent is kept back on the account in the event you have to break the five year agreement. So instead of losing this money to withholding tax, in a few years time you will be able to receive this additional lump sum.

These are just some of the ways you can take control over your retirement funds. Next week we look at how retirees can spend less money, and meet their needs by earning more income.