The Tribune

By IAN FERGUSON

MAINTAINING healthy finances as you approach retirement is just as important as making your regular visits to the doctor. Are you doing everything you should be doing to get your financial house in order for a comfortable and active retirement?

The research tells us that the average person spends over 20 years in retirement before their life ends. Very few people spend time calculating how much they will actually need during this period, and the new sources of income they will require to meet these needs.

So the all-important questions, then, are: How prepared are you? Or to the business owner: How have you prepared your employees, ensuring them a comfortable life after they retire?

Some attention has been given to educating the workforce about financial planning for retirement, yet research indicates that over 75 per cent of individuals, one year from retirement, are ill-prepared for this eventuality. There are those who will argue that their base pay disqualifies them, and prohibits their ability to secure retirement funding. Studies confirm, though, that the job level or pay scale of the individual does not matter as significantly as the knowledge they have in making deliberate choices towards sound investments and a seamless retirement process.

As a human resources consultant and trainer with some exposure and training in economics, I have been privileged to attend a number of retirement and investment seminars over the course of my career. What I found astoundingly strange was the fact that the majority of persons attending those sessions were within five years of retirement. It was as if the company was saying to these individuals: ‘You’re on your way out, go and see what you could learn before we exit you’. What I generally hear from these participants is even more staggering. Almost with one voice, heart and mind, these veterans leave saying: “I wish I knew some of this 20 years earlier.” Talent development experts now say to us that the retirement and investment message must be delivered to persons 20-30 years removed from retirement age if they are to be amply prepared for the inevitable.

So, to the young people who perhaps today feel immortal, thinking that your career will never come to an end, this advice is especially for you. We leave with you today a few salient tips on retirement and investment:

• Start saving, keep saving and stick to your goals. No matter how small, as you discipline yourself to making sacrifices, you will eventually see your retirement and investment portfolio grow. An important note of caution is, despite how much you are tempted, don’t touch your retirement savings.

• Know your retirement needs. Retirement can get expensive. If you determine you need 70 per cent of what you previously earned, you are better able to devise a plan for attaining that wealth.

• Contribute to your employer’s retirement savings plan. Do not even give this a second thought. If your company has made provisions for a retirement plan, you should be part of it. Remember to find out the particulars if you are no longer with the company. This also includes learning about your employer’s pension plan. If your employer does not have a plan, conduct the research and present it to your company’s leadership.

• Consider basic investment principles. Be sure to put your retirement savings in different types of safe investments. By diversifying this way, you are more likely to reduce risk and improve returns.

• Educate yourself about your investment options. Remember, financial security and knowledge go hand in hand. Find out about your National Insurance and other government benefits. Every little bit helps. You will need a number of different sources of revenue to ‘float the ship’ once you retire.

• Ask Questions. While you have varied resources at your disposal, speak with lawyers, accountants, investment consultants, bankers and others who can give sound advice on important steps you should take.

Take action today and register your team for the Bahamas Chamber of Commerce and Employers Confederation’s Retirement and Investment Summit on Saturday, November 17, 2012. Hear presentations from, and engage, senior executives at National Insurance, commercial banks, Insurance companies and local investment consultants.