WHEN SHOULD I START PLANNING FOR RETIREMENT?

Knowing how much you should save for retirement is critical. But what if you are late getting started? The longer you delay, the shorter the time that compound interest can do its magic on your savings. It is typically recommended that you save 15% of your take-home pay each year.


Money in the bank isn’t compounding. Therefore you should invest your money in an age appropriate portfolio, such as an Approved Retirement Scheme and rebalance regularly. Make sure your investment choices have low fees and expenses.

Assuming you start at age 25, you should have sufficient assets to retire at age 65 after 40 years. Short term market volatility should not deter long term investing.

Beginning at age 25 and retiring at 65, the appropriate savings rate is 15.4%. But starting just five years earlier, you could reach the same goal by saving just 11.1% each year. Starting early is more important than saving more.


Deferred consumption is the definition of capital. When a family defers consuming and saves and invests instead, they put that capital to work. Having more money invested early means their investments are making money and adding to their savings, which reduces the amount they need to add. Money makes money.


Starting at age 15 is even better. For students who work summers and start saving, the safe lifetime savings rate is only 8.04%. Starting early is so beneficial that you can lower the rate you need to save each year. Thus every sage investor suggests beginning as young as possible. The same is true of retirement planning. The later you start in life, the higher the percentage of your lifestyle you must save. Starting at age 25 you should save 15.4% of your lifestyle each year to reach financial independence by age 65. For every year you delay, add about 1% in your 20s and 2% in your 30s.

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5 REASONS TO DRINK GREEN TEA

I’m pretty sure that every Jamaican had a mother or grandmother who insisted that they drank tea every morning. Believe it or not the benefits of drinking tea are quite vast. And what, if you had to choose, would be the best tea you could drink? Green tea. Hands down. Asian cultures have known about the medicinal benefits of green tea since ancient times. Only recently however, have its medicinal properties been investigated scientifically. And below are 5 scientific reasons everyone should start drinking more green tea, 3-4 cups a day to be exact!

DIABETES: By balancing blood sugar levels, epigallocatechingallate (EGCG), a powerful anti-oxidant found in green tea, improves insulin use in the body preventing blood sugar spikes and crashes that can result in fatigue, irritability, and cravings for unhealthy foods.

HEART DISEASE: Scientists think green tea works on the lining of blood vessels, helping keep them stay relaxed and better able to withstand changes in blood pressure. It may also protect against the formation of clots, which are the primary cause of heart attacks.

CANCER: It can reduce the risk of esophageal cancer, but it is also widely thought to kill cancer cells in general without damaging the healthy tissue around them.

ANTI AGING: EGCG appears to be 200 times more powerful than vitamin E at destroying skin-damaging free radicals. Free radicals react with healthy cells in the body, causing damage so lessening their numbers may help reduce wrinkling and other signs of aging.

WEIGHT LOSS: Green tea increases the metabolism. The polyphenol found in green tea works to intensify levels of fat oxidation and the rate at which your body turns food into calories which could lead to weight loss.

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9 Reasons to drink green tea
Miracle of green tea

THE RELATIONSHIP BETWEEN STRESS AT HOME AND STRESS AT WORK

There is mounting evidence that work-family stress is related to higher absenteeism, lower performance, and higher job and family stress. New research points to significant links to occupational safety and health and work family stress, according to the Oregon Healthy Workforce Center. In order to reduce work-family stress, employers should help their staff to achieve better work-family balance by observing the following:

v      Training managers and supervisors to be more supportive of work and family. Recent evidence shows that employee support from managers and supervisors for family and work balance leads workers to report better health, improved job satisfaction, and lower intentions to leave the company.

v       Giving workers more control over their work hours. Increased control over when, where, and how work gets done is related to improved health behaviors.

v      Creating a resource guide for employees and their families.

v      Being a role model. Take some time off to be with your own family to show your employees you know this should be a priority for them as well.

v      Encouraging and supporting flexible schedules. Help employees to come up with creative solutions for child care coverage during holidays and school vacations such as working a compressed workweek, when possible.

Since the working environment has such a strong influence on employees and their families, employers should ensure that the working environment is one that encourages balance between work and family, facilitates employees’ health, and reduces injury risk. This will benefit everyone.

NIOSH

How high will the retirement age go?

In June, Robert Benmosche, the chairman of the insurance giant American International Group, said an increase in the retirement age was unavoidable. "Retirement ages will have to move to 70/80 years old,"
Benmosche told Bloomberg. "That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth." Currently, Americans are eligible for early retirement at 62, and full retirement at 66. The loss of retirement funds during the economic downturn forced many to acknowledge that they would have to work longer. But Benmosche's statement shocked many. Will people really have to work a decade or more longer than they expected to make ends meet in retirement? The answer is yes, according to some retirement experts. A number of factors, accelerated by the Great Recession, are now forcing people to change the ways they save for and think about retirement.


Vernon, the president of Rest-of-Life Communications, a company that helps people adjust the way they save for their post-work years says there are two primary reasons for the change:

• Workers don't have enough saved to meet their needs after they stop working, so they need the
additional income.

• People are living longer and want to be more engaged with life.

According to Vernon, this change will happen to all workers, not just those in lower-income brackets. Even people with healthy retirement savings likely don't have enough to maintain their lifestyle. Tresidder says this change does not have to be a bad thing. People can work in fields that engage them and provide personal satisfaction. Just because a person's first career was a grind doesn't mean the second one will be the same.
"People are really embracing (working later in life) because it's really about fulfillment," he says. But the question remains: How long will someone have to continue working to achieve a secure retirement? Unfortunately, it's impossible to answer conclusively, because it depends on individual circumstances and needs.

How high will the retirement age go?

HOW TO FIND A LOST PENSION

When Gladston Williams retired last year, he expected to live on his monthly pension of J$30,000.00, but then he remembered he was eligible for a pension from a former employer. The 66-year-old Williams worked at a company from 1969 to 1982 and lost track of the company after it went through several mergers and ownership changes. "I completely forgot about it," he says of the pension. "You never think you will get to retirement age."

Williams’ experience isn't unusual, especially in today's economy, where workers change jobs often and companies frequently are bought, merge or simply shut down. For former employees, staying in touch becomes more difficult as the changes multiply over time. The odds of record-keeping errors also grow as companies change hands - and pension plan sponsors have trouble keeping track of former workers who might have moved, changed their names or died. Unlike an IRA or NIS pension, unclaimed pension benefits

simply stay in the pension plan. In Jamaica, the Financial Services Commission (FSC) requires Pension Administrators to file a schedule of Unclaimed Benefits each year detailing the names and amounts in the fund due to members who are no longer employed to the company. Finding unclaimed pension benefits could make a huge difference to many people.

Williams was luckier than most. He had an old letter about the pension, but wasn't sure how to collect it. Eventually he was able to locate the relevant authorities. He received a J$116,400.00 payment retroactive to his pension's start date in late 2010, and now receives J$9,700.00 a month. "It might not seem like a lot of money, but it helps me pay the bills," he says.

Of course, the best strategy is to not lose track of potential pension benefits. If you do have a pension at a company that was sold, contact its current human resources department immediately to find out about the pension plan. If the company has gone defunct contact the Financial Services Commission to find out the status of your pension.

HOW TO PREVENT LOSING TRACK OF YOUR PENSION:

1. Ensure that you keep good records of your employment and earning history, these include:

v       Income tax returns forms

v       P-24 forms

v      Annual Benefit Statements

2. If you do leave a company before retirement, ask for written verification of your vested status with the plan administrator before you leave. Make sure pension managers know where to contact you, and keep them up to date if your contact information changes. Ensuring that you keep proper documentation of your files will help establish histories in case a successor plan administrator's records are incomplete or in error.

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Find a lost pension

Financial Services Commission Jamaica

February 1st kicked off the beginning of Black History Month, a time to celebrate the many contributions and successes of Blacks around the world!

What we now call Black History Month was originated in 1926 by Carter Godwin Woodson as Negro History Week. The month of February was selected in deference to Frederick Douglass and Abraham Lincoln who were both born in that month. Below are some important milestones and fun facts about influential black figures, inventors and barrier breakers

Did you know without these inventors, your favorite sandwich (peanut butter and jelly), the Super Soaker and even the stop light wouldn't be possible?

     Without George Washington Carver-- PB&J sandwiches would just be jelly-filled. Born a slave, Carver went on to develop several uses for the peanut (including Peanut Butter, soap, mayonnaise and adhesive) and 400 plant products according to Scholastic!

    Next time you sit in a foldable chair, think of inventor Nathaniel Alexander. He designed the chair to be used for large gatherings at places like schools and churches.

    Thinking about corrective or cataracts eye surgery? You owe Dr. Patricia. E. Bath a big thanks! Bath was not only the first African-American woman doctor to receive a patent for a medical invention. She developed an eye surgery that utilizes laser devices to make incisions more precise.

 In 1992, Mae C. Jemison became the first female African-American space traveler in the United States, according to NASA.

     Ever print something off your laptop, computer or smart phone? IBM computer engineer Mark E. Dean is the mastermind behind the technology that lets you do that!

    Think you could invent an improved sewing machine, but also the first traffic light and WWI gas mask? Garrett Morgan was a man of many skills and the inventor behind all of those!

The list continues with more incredibly talented black inventors: Dr. Charles Drew (the doctor behind the blood bank), Wallace Amos (the baker behind Famous Amos chocolate chip cookies); Lonnie G. Johnson (the man behind the Super Soaker water gun) and Dr. Shirley Jackson (the female scientist behind fiber optics cables and caller ID).

Did you know? Black History Month Edition

THE IMPORTANCE OF MAKING VOLUNTARY CONTRIBUTIONS

VOLUNTARY CONTRIBUTIONS

Voluntary contributions are contributions which are made by the members of a pension plan in excess of their compulsory or basic contributions, which is normally 5% of the individual’s pensionable salary.

THE IMPORTANCE OF MAKING VOLUNTARY CONTRIBUTIONS

v     The more you can set aside now for your retirement, the greater your retirement benefit will be

v     Your voluntary contributions is used to secure additional pension at Normal Retirement Age

v     Your voluntary contributions are usually refundable upon termination prior to attaining Normal Retirement Age without having to forfeit the pension owed to you on behalf of the employer’s contributions if vested.

v     Pension Contributions are tax deductible. The more you contribute towards your pension, the less tax will be deducted from your salary.

             The table below highlights the tax advantages of making 

                              voluntary contributions:

	BASIC CONTRIBUTIONS 5%	BASIC + VOLUNTARY CONTRIBUTIONS 10%
Gross Salary	$2,000,000 p.a. or $166,666.67 p.m.	$2,000,000 p.a. or $166,666.67 p.m.
Pension Contributions	$100,000 p.a. or $8,333.33 p.m.	$200,000 p.a. or $16,666.67 p.m.
NIS	$24,999.96 p.a. or $2,083.33 p.m.	$24,999.96 p.a. or $2,083.33 p.m.
Income Tax Threshold	$441,168 p.a. or $36,764 p.m.	$441,168 p.a. or $36,764 p.m.
Taxable Salary	$1,433,832 p.a. or $119,486 p.m.	$1,333,832 p.a. or $111,153 p.m.
Income Tax Paid	$358,458 p.a. or $29,872 p.m.	$333,458 p.a. or $27,788 p.m.
Annual Tax Savings  by contributing 5% Voluntary		$25,000

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STAYING FOCUSED ON YOUR GOALS

Staying focused on our goals can be very difficult especially when faced with the numerous challenges life  throws our way. The most important key to achieving successful outcomes is consistency and creating the progress, momentum, and ultimately, the successful accomplishment that we so desire. The following are ways we can employ to maintain focus, energy and optimism while pursuing our goals. 

                                                                                     Have Powerful Reasons

With a strong enough reason you will find the wherewithal to achieve your reward. Reasons in addition to belief keep you motivated. When you're excited about your goal, it does not seem like work. If you are not excited, your efforts will require more discipline and energy. Make sure it's YOUR goal. If the purpose is big enough, then the how always takes care of itself. Failure is not even a consideration.

Write Down Your Objectives

This is a critical step. “Don't think it, ink it”. When you write your goals down, they appear not only on paper, but they become indelibly written upon your consciousness.

Visualize

Nothing can withstand the power of a clear, multi-sensory vision of what you intend to achieve. What does it look like? What will people be saying about it? How will you feel? The more detailed and real you can make your vision, the more powerful it will be.

Maintain a Support System

Surround yourself with people who will encourage and challenge you. Be accountable to someone other than yourself. Working on your own can be very isolating. Take the time to connect with one or two individuals with similar goals and keep each other motivated.  Read positive books and review past successes.

Focus On Only a Few Goals at a Time

You can achieve anything you desire, but probably not everything. Concentrate your efforts and your energy on just a few. You may have dozens of goals and projects, but try to keep a maximum of three key goals in the forefront of your mind. By concentrating on one or two goals at a time, you are more likely to get what you need to do done in a methodological and organized way.

Create and Celebrate Milestones!

Setting one huge goal can be daunting and a bit discouraging. By trying to break your goal up into several smaller, easily achievable goals, you can work, complete, regroup and keep going. Mark your successes and acknowledge yourself for your progress. As you achieve one goal, you can see better and believe more easily in the accomplishment of others. You deserve to succeed and you deserve to celebrate your successes!

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The Top Ten Ways to Stay Focused on Your Objectives

THREE MAIN REASONS TO PLAN AND PROTECT YOUR RETIREMENT SAVINGS

Have you started thinking about and saving toward retirement? Is it difficult for you to put aside money each month for retirement? Will you be able to afford the type of lifestyle that you desire after retirement? If these are not questions you have been taking into consideration, we have compiled a list below of some main reasons why you should start doing so.

Spiraling Health Care Costs:

It is no secret that many Jamaicans cannot afford the type of health care that they need, and to make this reality even more striking, is the rising cost of health care. With a longer life span, managing health care costs can be a critical challenge for retirees. Consider putting aside a portion of savings for health care and purchasing long term care insurance, this can make your retirement a healthy experience.

People are living longer!

There are many healthy 65-year-olds who will live well into their 80s or even 90s, resulting in another 20 or more years of retirement income. Underestimating how long you will live can be a major pitfall to your retirement years. Make use of every opportunity to maximize your retirement savings, such as making the maximum voluntary contribution.

Inflation:

Inflation can eat away at the purchasing power of your money over time. This affects your retirement income by increasing the future costs of goods and services. Even a relatively low inflation rate can have a significant impact on a retiree’s purchasing power. Again, making use of opportunities that will increase your retirement savings is critical.

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The 5 Biggest Threats to Your Clients’ Retirement Nest Eggs