Othneil Blagrove, Senior Manager, Sales and Marketing, JN Life Insurance has urged self-employed persons to think seriously about having a solid pension plan because of the risks associated with some of the professions.
Senior Manager, Sales and Marketing
Mr Blagrove maintained that currently, approximately 40 per cent of Jamaicans are self-employed with many not being contributors to the National Insurance Scheme (NIS). He added that many self-employed persons were at risk of their lives being plunged into poverty in the event of an injury or other circumstances.
“In other cases, some persons employed in the cosmetology sector may find that as they mature in the profession, they sometimes find that younger clients are not keen to utilise their services. In all cases, it’s not because they will lack the skill, rather, there it’s the perception that a person at that age may not be in touch with the latest trends. Consequently, there is the possibility that persons may be forced to retire before 65,” he added.
Mr, Blagrove noted that for those who contribute, there is the NIS benefit, but this amount would not be enough to give them a comfortable retirement.
“NIS benefits are currently $13,600 monthly which, based on cost of living is not enough to cover basic expenses. This means that there are many persons who will experience financial difficulties upon retirement, or forced to work again, for those who can, for additional income,” he said.
He added that the number of Jamaicans being eligible for a pension upon retirement is low, especially with the country’s aging population. He said more education is needed especially for those who are self-employed.
“Investment experts say you need 40 years or more to plan for your retirement. Consequently, if you are above a certain age, no matter how much you save now, you will never be able to live the same lifestyle in retirement that you lead now because you would have lost some of the years needed to do that investment,” he explained.
“As more Jamaicans live longer, investment experts estimate that they will need to have enough money to live up to 15 years or more after retirement. Consequently, saving for retirement will ensure you are able to support yourself, as opposed to depending on others,.” he stated.
He also underscored the need for persons to ensure they have a ready source of funds to cover their daily expenses during retirement.
“You may be saying that I have just paid down on a house and I am going to put a room to the back. Or you might say mommy or daddy has a piece of land and I’m going to build something on it and that is my retirement. Nothing is wrong with that, but is important that you have a source of liquid cash when you retire,” he added, pointing out that this would assist in times of emergencies.
Mr Blagrove explained that outside of personal benefits, being a part of an approved pension scheme is beneficial to the Jamaican economy. He said pensions provide a pool of long term funds which can be used to invest in public infrastructure, rural and urban development and ultimately, increases the wealth of the country.
