Retirees can live purposeful and active lives by getting involved in social or charitable activities.
How to live comfortably on a low retirement income
Everyone has different goals and lifestyles. Some people may question how anyone can live comfortably on a low retirement income. The truth is there are retirees receiving small monthly pensions and are living comfortably.
Poverty among the elderly in Jamaica remains an issue of concern. According to Planning Institute of Jamaica, 18 per cent of Jamaicans aged 60 and older are living below the poverty line.
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Some years ago I attended a business event and the presenter disclosed that he was dismayed by the pension cheque payouts that were made to pensioners by his institution. He said the majority of the pensioners received monthly pension income below $150,000 after working for many years. It was a wake-up call for him as well as the attendees. He encouraged the audience to participate in business opportunities that can assist them with retirement income.
Last week one of my clients requested an update on her long-term investment. She shared an interesting story of her investment and retirement journey. She worked for over 20 years as an office attendant and retired at age 63. Upon retirement, she chose to receive a refund of her pension contributions which totalled $2 million. At age 65 she received the employer’s portion. She opted for the 25 per cent lump sum and a reduced monthly pension. The lump sum was a measly $500,000 and her monthly pension is $10,000. This seemed rather curious. When I asked the reason she selected a reduced pension, she responded that, without the lump sum, her pension would be $12,000 monthly. She decided that it would be wiser to invest the lump sum of $500,000 in a managed equity fund for the long term. Interestingly she also invested the $2 million pension refund in a diversified long-term fund.
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I was struck by the disciplined approach this retiree took with the little that she had. How has she coped since retiring seven years ago?
Her monthly workplace pension plus National Insurance Scheme (NIS) pension benefit totalled $34,000. It would be reasonable to think that she would be miserable in retirement, especially at times of high inflation. On the contrary, she was happy to inform me of her debt-free status. A homeowner without a mortgage, she seeks to help her son purchase his own home. Her pension income covers her utility bills and provides food for her home. Her long-term investments are aimed at providing a safety net for emergencies, such as medical expenses and major home repairs.
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I am pleased to see more retirees or adult seniors encouraging their children to invest early and use their financial resources to give the younger generations a head start in life.
The aforementioned retiree used the opportunity of the current tariff war to rebalance her investment portfolio. As I have stated repeatedly, it’s never the amount of salary earned, occupational status, or intellect that an investor possesses, but the qualities of being disciplined, persistent, patient, and having a long-term mindset that will yield financial success.
If you are retired but not satisfied with your pension, there are things you can do and actions that can be taken to make retirement enjoyable and stress-free:
* Eat at home more often and enjoy the occasional dining out.
* Avoid or manage debts, especially credit card debts.
* Buy wholesale and curtail expenses.
* Be vigilant when shopping and buy quality items at discount prices and during a sale.
* Downsizing may be necessary for some retirees who still live alone in family-size homes.
I also had the pleasure of meeting with a retired teacher. He has re-entered the job market as self-employed. He now works in the tourism sector and continues to invest regularly. His pension was not sufficient to meet his needs and he is now very happy to take tourists around the island. He enjoys a comfortable lifestyle as a retiree.
Retirees can live purposeful and active lives by getting involved in social or charitable activities. The Caribbean Community of Retired Persons (CCRP) provides an excellent social network for retirees. This organisation encourages seniors to make meaningful contributions to their community and the nation by using their time and resources wisely while enjoying a quality way of life. CCRP provides diverse benefits for members such as health insurance, property insurance, membership discounts from their discount partners, outings, social and wellness activities.
Having an exercise routine is helpful. Simply going for walks daily can boost one’s health. Backyard gardening can be useful, pleasing, and rewarding. Retirement provides the opportunity to enjoy the simple joys of life; they don’t cost much.
As Oprah Winfrey says, “If you look at what you have in life you will have more. If you look at what you don’t have in life, you will never have enough.”
Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com.
Grace G McLean
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