To put it into perspective, if you are a recent entrant into the workplace this represents your entire nursery school, primary, high and university life combined. On the other hand, if you are close to your second quarter milestone, that period may be longer than your entire professional career thus far. In short, it is going to be a long time. We say it’s time to start planning for it.
Getting retirement ready is easy with our 3-pillar system.
How much money will you need for your retirement?
Ideally you will need the equivalent of up to 70% to 80% of your pre-retirement salary to enjoy a retirement lifestyle that is comparable to your pre-retirement lifestyle. Adequate retirement savings allows to meet your basic needs – food, shelter, and increased health care costs – at a minimum. Get retirement ready with Jamaica’s 3-pillar pension system.
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The National Insurance Scheme (NIS) is the state’s social security scheme. Many people discount its value, but, with benefits such as old age pension, employment injury benefit, invalidity pension offered in case of illness before retirement age, funeral grant, and widow’s and widower’s pension among others, it’s nothing to be dismissed.
The good news is that whether an employer offers an employer-backed plan or not, all working Jamaicans between the ages of 18-69 now have an equal opportunity to benefit from retirement savings plan either through an approved superannuation fund or approved retirement scheme.
This means that you can save up to 20% of your GROSS INCOME in a tax-advantaged investment vehicle. In so doing, you can benefit from a monthly reduction in taxes and from the accumulation of wealth in an expertly managed fund.
But those are not the only benefits to saving for retirement. Among others, it is one of the most rewarding savings plan options available. You’ll enjoy the compounding interest, and, in the event of your death, your savings can be transferred to you designated beneficiaries.
Multiple streams of income are just as important in retirement as it was when you were working. Therefore, we encourage you to supplement your pensions savings and NIS benefits with any of the many investment options on the market – e.g., stock, bonds and, real estate.
Most importantly, we encourage you to seek professional guidance to make your big, bold retirement dreams come true. Your retirement planning approach should be tailored to you.
It is important to save for your retirement years because: Life Expectancy is Increasing: People are living longer and leading more active lives in retirement. It is important to ensure that you make adequate preparations to live an independent and dignified life in your retirement years.
Reduction/Loss of Income: When people retire, they will experience a reduction in or complete loss of income. They may have to live entirely on what they have managed to save for the retirement years. Therefore, one must be informed, intentional, practical, and proactive in saving for this period of life.
Unexpected Circumstances: Life is unpredictable, and anything can happen, such as illness or disability.
Inflation: Inflation may reduce your retirement savings. What this means is that your dollar will buy a lot less in the future than it does today.