Experts in pensions planning, retirement, social security and investments are encouraging all working adults to pay closer attention to pension planning, stating that data has shown that the population is largely under-pensioned and unprepared for life following retirement.
This was revealed during “Let’s Talk”, an online webinar hosted by Sagicor for online participants of the Eastern Caribbean recently. All of the panellists at the webinar agreed that for the most part, people are not well prepared for life following retirement, and it is important that persons consider developing multiple income sources even prior to their retirement date.
Stephen Robinson, Vice President of Strategic Projects at Sagicor Life Inc said, “All the research and data I have read suggests that the vast majority of people aren’t prepared for retirement. A typical long working life is about 40-45 years. Most people do not understand, until they are in it, that supporting yourself for those 15 years or so of life following retirement at age 65 is not an easy task.”
Michael Millar, Head of Wealth Management at Sagicor Asset Management Inc. agreed stating that people are usually shocked and disappointed when presented with their letters on preparation for retirement. He said, “People tend to procrastinate to begin the process: young people think they have a lot of time, and older people may think they have more time than they actually have. All generally may feel some level of trepidation because of varying levels of financial literacy. I think I speak for all on the panel when I say that it is best to begin early to afford the greatest opportunity of success. You don’t have to know it all or be absolutely correct at the beginning. Start by looking at a couple of things: Look at desired lifestyle, income sources, accumulated assets. Factor in when you plan to retire, as this has implications for accumulation. Consider how long you hope to live and then you just need to implement your plan and stay the course.”
Donna Gibbs, Manager of Client Relations at Sagicor, who oversees company Group Pension plans counselled that individuals should ensure they know as much as possible about the pension plans at the organisations at which they work so they aren’t surprised when it’s time for retirement. She said, “It’s more than likely that your company’s pension plan will not provide 100 per cent of what is needed for your retirement income – this is a supplemental income, it’s not all. I would encourage employees that are part of a company’s pension plan to find out what is the projected percentage of your final income that this plan will provide, so you know if you stay with that company until retirement what you will be leaving with.”
David Matthias, Head of the Social Security Scheme in Antigua and Barbuda, provided great insight from the public sector perspective. He said, “The misconception that a lot of people have is that social security is all you need to survive in retirement, but the unfortunate truth is this is not so. How you live today is dependent on your salary; it’s important to understand that social security only replaces a portion of that salary. Therefore, how you live post retirement is immediately affected by the decision to retire and receive a pension. The simple rule that we at social security like to tell people, is that what you require to live today, is what you must plan to generate and more in order to live well over your expected lifetime. Anyone who is going to retire, should not consider social security the be all and end all – insurance is important, an aggressive investment and savings plan, these are all necessary from early in one’s working years.”
The webinar also introduced the types of savings and investment ideas individuals should consider and also encouraged young people in particular, to get started as soon as they begin working. The webinar panel was rounded off by St Lucian motivational speaker and entrepreneur Anya Charles and Tavia Hunte, Principal at the Shivas School of Dance in Antigua and Barbuda, who reinforced that the matter of retirement was especially dear to them as they understood that being fully prepared for retirement was a full-time personal responsibility given their entrepreneurial status.
Let’s Talk: Are you under pensioned, hosted by Sagicor is the first in a series of quarterly webinars which will discuss financial topics of interest to all in the Eastern Caribbean. The intention is to host a panel of subject matter experts from in and out of Sagicor as well as interested local guests to explore the topic in detail. The next webinar is scheduled for July 2023.