I recently had a discussion with a senior citizen who is retiring without a pension. She is in her 60s and just a few years from the normal retirement age of 65.

Her concern was how to survive in retirement without a pension. Being unemployed and with a small sum to invest, she needs advice on how to use the little she has to create income in retirement. Her husband is the breadwinner and she relies on him for financial support. But what if her husband dies early? Are they both insured? Interestingly, she lamented that insurance is expensive and unaffordable at their age. Do they have any savings, pension, or investment? These were the relevant questions asked to be able to provide a solution to her retirement concerns. We were able to solve her retirement challenge, which showed that having an experienced, trained, and licensed financial advisor is crucial in planning for your retirement.

Steps to take

With nearly 80 per cent of Jamaica’s working population having no formal pension plan, pension poverty is likely to increase. Some retirees are discovering that their National Insurance Scheme (NIS) or social security benefits are woefully inadequate to meet retirement needs. If you are working and nearing retirement but have no savings and no retirement plan in place the steps below should prove beneficial:

• Cut back on spending.

• Consider working longer or obtaining a part-time job (you could work remotely via an online platform).

• Open an approved retirement plan (ARP) and delay retirement

• Make the maximum contribution of 20 per cent to the ARP

• If you are a homeowner, consider downsizing or selling your home for a smaller one or moving in with adult offspring. A smaller home is less expensive to maintain. The sale of a larger home can provide much-needed funds for retirement. It’s best to downsize before retirement.

• Use the home as a source of income by renting the whole or part of the residence.

• You may need to consider a vehicle that is less costly to operate.

• Plan to work while in retirement (for retirees who maintain good health). Employers are seeking retirees to work more than ever before because of their loyalty, dedication, and reliability.

• Reduce or pay off debts before retirement.

Persons who are not willing to make the sacrifice may find that they will spend all their lives working and retirement is not delayed but aborted because they did not save enough. A recent survey by US-based Clever Real Estate revealed that 65 per cent of retirees in America say they are not financially secure and 30 per cent of retirees have no savings in retirement. It shows how important it is for everyone, wherever you are located to plan for retirement. People are living longer in retirement. Financial experts recommend that you should have eight times your annual income for retirement. For individuals who find themselves in retirement but without savings, the following steps are worth considering:

• Find a part-time job and work remotely if you can.

• Create new streams of income – eg monetising your hobby. What is it you enjoy and are good at that can be of benefit to others? What new skills can you learn and use to generate income? Explore income-generating opportunities online and offline. There are companies whose employees can benefit from the skills and experience you gained in your career. Why not be a consultant?

• Do you have assets that you can sell? What about the extra car in the driveway? Check around your home for items of value that can create extra income if sold.

• Relocation may be an option if it saves money and offers security. Downsizing your home and invest savings from the sale of the larger residence. Moving in with adult children could be a viable option. But remember your peace of mind is important, so weigh your options

• Reduce expenses. Can you still afford the gym membership? You may need to jog, go for long walks, or exercise right there at home.

• Pay off credit debts and avoid new debts.

If you retire today without a pension remember there is still hope. “Retirement is a blank sheet of paper. It is a chance to redesign your life into something new and different,” according to Patrick Foley.

Grace G McLean is financial advisor at BPM Financial Limited. Contact her at gmclean@bpmfinancial and visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com