Fi­nan­cial Lit­er­acy 101 pre­sented by Bank of Saint Lu­cia

The Star (St. Lucia) - Business Week - - FINANCIAL TIMES -


The month of Oc­to­ber is des­ig­nated as Fi­nan­cial In­for­ma­tion Month in the East­ern Caribbean Cur­rency Union (ECCU). The 2017 theme is “Re­tire­ment Plan­ning: Mak­ing Your Golden Years Golden.” The theme is aimed at ad­vanc­ing pub­lic sen­si­ti­za­tion on the im­por­tance of pre­par­ing for re­tire­ment - from the very first pay­check and con­tin­u­ing through­out the years of em­ploy­ment.

Re­tire­ment is a dis­tant goal for some or it may be right around the cor­ner. Be­ing ad­e­quately pre­pared will en­sure a good qual­ity of life after em­ploy­ment, the truly golden years. But the ques­tion re­mains, how many of those who reach re­tire­ment age are ac­tu­ally ready for this ma­jor life stage?


Re­tire­ment may seem like many years away for some, but sav­ing now will make it more com­fort­able for you to en­joy your golden years. The key is to have a proper re­tire­ment plan in place and healthy sav­ings. A firm un­der­stand­ing of your re­tire­ment ben­e­fits with your cur­rent em­ployer and an as­sess­ment of whether your cur­rent sav­ings are suf­fi­cient to meet your goals are a good start. Talk to your fi­nan­cial in­sti­tu­tion rep­re­sen­ta­tive to­day for per­son­al­ized guid­ance in iden­ti­fy­ing the best sav­ings prod­ucts avail­able, as well as de­ter­min­ing how much you will need to have a com­fort­able re­tire­ment life. Be pre­pared to plan for the dif­fer­ent phases of re­tire­ment, for ex­am­ple im­me­di­ate re­tire­ment – which af­fords op­por­tu­nity to un­der­take new per­sonal projects or ex­pe­ri­ences like trav­el­ling, start­ing that home gar­den or sim­ply tak­ing up a new hobby. Later in your re­tire­ment years there may be in­creased ex­penses on health and home care, which need to be planned for.

It is im­por­tant to note also that a re­tire­ment plan is not just about crunch­ing num­bers, it is about map­ping out your goals and am­bi­tions.

Out­line your goals

When do you plan on tak­ing re­tire­ment? What do you plan on do­ing?

Crunch the num­bers

Talk to your fi­nan­cial in­sti­tu­tion rep­re­sen­ta­tive How much will you need (Take into ac­count in­fla­tion – cost of goods and ser­vices are likely to be more in the fu­ture) Be re­al­is­tic

Reg­u­larly re­visit and re­view your plan

Goals are not writ­ten in stone, ad­just if needed as cir­cum­stances may change


The truth is that most of us carry some form of debt whether it is by way of credit cards, a ve­hi­cle loan, med­i­cal loan or a mort­gage. As you ap­proach re­tire­ment, the aim is to re­duce your debt. Many tend to fo­cus more on pay­ing off the debt and not on sav­ing. It is crit­i­cal to strike a bal­ance be­tween en­sur­ing that debt is han­dled wisely and ad­e­quately sav­ing to have a re­tire­ment that meets your ex­pec­ta­tions.

Get to know your debt and know the costs of us­ing it. If you have more than one loan fa­cil­ity, list them all in terms of loan bal­ances, in­ter­est rates and min­i­mum pay­ments. It is ad­vis­able to re­duce the debt with the higher in­ter­est rate or the loan which is close to be­ing paid off. Pay your bills on time.

Pay­ing off a mort­gage in full be­fore re­tire­ment is a far less com­mon oc­cur­rence. In­stead, treat the monthly mort­gage pay­ment as if it were a fixed ex­pense in your re­tire­ment plan. Other key re­tire­ment rec­om­men­da­tions are to plan to make life­style changes to ad­just to your new re­tire­ment in­come; track your monthly ex­pen­di­ture; and con­sider hav­ing a con­tin­gency sav­ings fund for un­ex­pected emer­gen­cies or unan­tic­i­pated ex­penses.

Take con­trol of your re­tire­ment plan­ning. Fail­ing to plan is plan­ning to fail!

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