Pension expert, Sharon Smith, says as difficult a time some people may be experiencing now due to the economic effects of COVID-19, pension contributors should be seeking to preserve their savings.
Speaking recently during a JN Circle Catch Up via Facebook Live, Ms Smith, who is the head of premium financing and pensions at JN Bank, said, whether contributing to an approved retirement scheme, superannuation fund or simply a personal savings plan, the focus should be on how to maintain those contributions and grow one’s personal pool of funds.
- Your retirement will last a lot longer than this pandemic
“If you think of your own financial situation now, as in today during this pandemic, especially those persons who might have been laid off temporarily…, and you think about how difficult it is to survive financially, in some cases not being able to purchase food. Just think about this seriously: any financial discomfort or pain that you are feeling today because of not having savings, think about how that pain will last for all your retirement years, which could be 10 or more years,” she painted a picture for contributors, as she spoke with broadcaster Dahlia Harris.
“At least with this pandemic, we hope to get out in a few months or a year or two,” she said.
- You won’t be able to tap into your retirement funds before retirement
If you’re contributing to a pension scheme or a superannuation fund, by law will not ve able to tap into those savings unless you are now at the age of retirement, which is 60 for women and 65 for men; or have been medically certified as disabled and unable to work
- Don’t discontinue your contributions. Instead, adjust your savings.
“If you have been laid off, you should start back your savings as soon as you start to work again. And, if you are earning less when you resume a job, you have the option to reduce your contribution to bring it more in line with what you are earning and what you can afford to save,” Ms Smith advised.
- Look at how you can save from funds, which you would have allocated to activities pre-COVID-19, no matter how small.
“If you are earning monies now, whether you are part of a formal pension scheme or not, your focus should be on saving. During a recession, cash is king. So you should be putting aside some monies. If you have children, you may be saving some money now, although the food bill may be going up, but when you think of your other expenses, such as your transportation, or extra lessons for some parents, you are not paying those now, so my advice is to put some of those monies towards your retirement plan,” Ms Smith said.
“It’s going to be very difficult, but we will have to pinch pennies and think very carefully about our future, because your retirement is not about your age, it’s about that time when you can no longer earn a living.”
