“I will be 49 years old this year and I’ve always been self-employed. I currently operate a successful salon, but lately I’ve been getting a little tired of working all the time. The problem is that I’ve never really thought about retirement, so I don’t have much money saved up. Is it too late to start a retirement plan?

Perhaps the most discouraging experience for a financial advisor is to meet someone whose financial situation is so grave that you really can’t offer much assistance to fix it. Fortunately, those cases are rare. Unfortunately, when they do occur, they’re usually associated with persons in their retirement years.

Let’s look at three persons who have had negative retirement experiences; where it was just too late to make positive changes:

Sixty-seven year-old Clarence has been the caretaker for a residential complex for over thirty years. He is appreciated by all the occupants, as he is trustworthy and friendly. However Clarence is realizing that the effects of age have diminished his ability to carry out any of his very physical job functions, and he is worried what will happen in the future.

He has no savings, has never contributed to the National Insurance Scheme (NIS), and has no close family left in Jamaica. Even though he would like to take a break one day, Clarence hopes he will have enough strength to continue to work forever.

Winston, a retired civil servant, lives with his daughter and her family in a rural town in Jamaica. After completing over 40 years of stellar service in a Government office, he was happy to settle down into what he hoped would be a blissful retirement. Winston’s only sources of income are his government pension and NIS cheque.

Unfortunately for him, the high cost of living has eroded the purchasing power of his earnings, and he was forced to deplete his small savings account. Once fiercely independent, Winston now feels that he is a burden to his family.

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After a successful career as a senior accountant in a large company, Owen decided to stop working early so that he could really enjoy his retirement years. He had invested over the years and owned a large home, so he thought that he would have enough money to live off for the rest of his life.

Owen sold his house and migrated to Atlanta with his wife, to create a retirement lifestyle that few could dream of. To pay his bills, Owen would withdraw from the interest generated by his investments. However, after only a few years, he had to start taking money from his principal. Owen has now rejoined the work force, as his nest egg has dwindled away.

Although Clarence, Winston and Owen had different working experiences, they all share a common problem in retirement – they are not able to live the lifestyles they desire. These stories of retirements gone wrong can be attributed to one common factor: the lack of adequate financial planning.

Clarence had worked only to meet his immediate needs, and didn’t save towards the time when he couldn’t be employed anymore. Winston depended on his government pension to be enough to meet his retirement needs, not considering the effects of time on the value of his money. Owen invested for the future, but did not get professional advice to determine if his efforts would be enough to fund his desired retirement lifestyle.

So the question is: at 49 years of age, are you also doomed to a bleak retirement with a reduced standard of living; or worse, will you have to work until you die?

Don’t despair – all hope is not lost, as you’re still working and you have time to make arrangements for the future. The essence of stress-free retirement planning is to create a viable strategy while you’re employed, that will replace your income when you choose to stop physically working.

To create a successful retirement strategy, you have to get professional advice from a financial expert. It’s almost impossible to plan for your retirement requirements on your own. How will you know how much money you’ll need in order to live out your twilight years? How will you decide the best way to invest?

An advisor can use financial planning tools that can project into the future, and can also recommend the appropriate investments to help you to achieve your goal. There are several financial institutions that offer free retirement advice in Jamaica.

Over the next two weeks, we will look more in depth at retirement planning by showing you ways to create the income you’ll need to be stress-free not stressed-out when you retire.