FOR many Jamaicans the notion of gaining wealth is an ideal that is a focus, whether through entrepreneurship or employment. However, without proper planning this could easily take a turn, leaving older persons with no income or resources.

Shamar Clarke, executive financial advisor at Sagicor Life, said that “retirement planning and estate planning are two interconnected aspects of financial management”.

“Once persons are earning an income they must prioritise securing their future, and that of their loved ones. Both retirement planning and estate planning play crucial roles in ensuring financial stability, preserving assets, and maintaining the quality of life that a person wants during retirement and beyond.”

He said retirement planning involves setting goals, saving systematically, and investing wisely to build a nest egg that can support the desired lifestyle after a person stops working. It is essential for each person, he said, to start retirement planning early in order to take advantage of the power of compounding and allow their investments to grow steadily over time.

“Having a clear retirement plan in place, persons can estimate how much money they will need to cover living expenses, health-care costs, and other financial obligations during their golden years,” said Clarke.

Retirement planning, he said, can provide financial independence and security after the end of an active, income-generating career. In most countries, government pension systems generally cover basic living expenses, however, relying solely on this source may not be sufficient to meet all retirement needs. By saving diligently and creating a diverse investment portfolio individuals can have peace of mind knowing that they have built a financial cushion to support their desired lifestyle and allow them to pursue their dreams during retirement.

Estate planning on the other hand, he stated, is the process of arranging for the disposal of one’s assets and investments after death. It involves creating a will, establishing trusts, and designating beneficiaries for various assets. Estate planning ensures that a person’s wishes are honoured so that their assets are distributed according to their desires, Clarke noted. “Unfortunately, not many people think of or plan for their own death but it is an important part of the financial cycle to make [sure] that all the debts and expenses are covered and that your loved ones are clear on how you want your assets to be transferred.”

Said Clarke: “One of the primary benefits of estate planning is that it minimises disputes and legal battles after death. Estate planning also allows individuals to protect their assets from excessive estate taxes and ensure that their beneficiaries receive the maximum value from their estate.

“Moreover, estate planning enables individuals to choose guardians for their minor children, establish provisions for dependents with special needs, and set up charitable donations to support causes that are important to them. Estate planning is not just for the wealthy – it is a necessary step for individuals of all income levels to safeguard their assets, protect their loved ones, and leave a lasting legacy.”

He said that both retirement planning and estate planning are crucial components of a comprehensive financial plan. “Retirement planning ensures that individuals can enjoy financial independence and maintain their desired lifestyle during their golden years. Estate planning, on the other hand, allows individuals to preserve and protect their assets, minimise family disputes, and secure their beneficiaries’ future. By prioritising both retirement planning and estate planning, individuals can achieve long-term financial security, peace of mind, and leave a legacy for their loved ones.”