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.
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.
“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 on the JN Circle Catch Up aired live on Thursday, April 16 via The Jamaica National Group’s Facebook page.
The JN Circle Catch Up is a six-part social media series targeted at providing information to JN Members and the public to help them weather the effects of the COVID-19 pandemic.
“At least with this pandemic, we hope to get out in a few months or a year or two,” she said.
Ms Smith said, although by law persons contributing to an approved retirement scheme or superannuation fund will not be able to tap into those savings unless they have attained the age of retirement or have been medically certified as disabled and unable to work, they should not discontinue their contributions. Instead, they should adjust their 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,” she advised.
She recommended that persons can look at funds, now not being spent for activities pre-COVID-19 and set aside a portion, 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,” she 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.”