It’s the start of a brand new year! Some peoples have already made their new year’s resolutions, but resolutions alone will not be enough to reach your goals.

What is your financial plan for the future and what are your goals? It’s time to tell your money where to go, instead of wondering where it went. Start the new year with specific goals and do not lose sight of your long-term goals.

Last week I had a chat with a civil servant who has decided to take the necessary steps now to achieve her retirement goals. She is 21 years from retirement and has witnessed retired civil servants who are struggling to make ends meet. These retirees have now re-entered the job market because their monthly pension is just not enough to meet their needs. Some of these retirees had little or no investments to supplement their pension income. This is the reason streams of income are important for retirement. Therefore, saving and investing for the retirement years should be considered a major priority.

I encourage that planning for retirement starts early, and if you are nearing retirement without a plan in place, now is a good time as any to start. Every working Jamaican can start a pension plan. Superannuation plans (group pension) and retirement schemes (personal pension plans) are available. If you are self-employed, an entrepreneur, or working within an organisation where there is no pension plan in place, don’t delay planning for your retirement. Do your research on pension products that are available in the market. Get a clear understanding of how pension funds are administered and invested. Expert advice is necessary in making the right decisions about your retirement goals. Learn how to keep track of your pension fund performance and review your annual pension statement.

Having a written financial plan is good but, without action, the best plans will fail. James Clear, author of Atomic Habits, shared some valuable nuggets on taking action. He said: “If you haven’t started, then taking action is more important than finding a better strategy.”

Clear noted that people are reluctant to take action because they “want to learn more”. According to him, “The best way to learn is often by taking action.”

Renowned motivational speaker Les Brown said, “Do what is easy and your life will be hard. Do what is hard and your life will be easy.” I invite you to think about the plans you had last year. Were they all actioned? If you missed a deadline, don’t change the goal, change the deadline instead. That way you can get started. Taking action is difficult but is necessary for success.

In another quote, Clear said: “Every action you take is a vote for the person you wish to become.” Do you want to become better at saving, investing, budgeting, and planning for your retirement? Planning for retirement consists of many small steps repeated many times.

A collaborated study done by Edward Jones Investments described four types of retirees. These groups were categorised based on retirees’ behaviour, aspirations, lifestyle, and their readiness for retirement. The groups were named:

• Purposeful Pathfinders

• Relaxed Traditionalists

• Challenged yet Hopefuls

• Regretful Strugglers

The study showed that they had a different way of life in retirement. It concluded that how retirees made decisions and implemented strategies during their pre-retirement years will determine the desirable or undesirable outcomes.

The Purposeful Pathfinders lead a very active and productive lifestyle in retirement. They live purposeful lives, are better financially prepared for retirement than the other groups, and generally enjoy good health. Travel and leisure are high on their agenda. They are living their dreams and making generational plans. Eighty per cent of them have made wills. They started saving for retirement earlier than the other groups, at an average age of 34. Interestingly, during the working years, the Purposeful Pathfinders got assistance and advice from financial advisors in preparing for retirement and more than 50 per cent of them worked with financial advisors during retirement. This underscores the important role financial advisors play in every phase of the financial journey.

The Relaxed Traditionalists are comfortably living the traditional retirement lifestyle. They enjoy financial freedom and good health, and they prioritise travel and leisure. Enjoying a hassle-free life is important to them. They started saving for retirement at an average age of 37 and, like the Purposeful Pathfinders, more than half of them use the services of financial advisors. Near 75 per cent of them made a will.

The Challenged yet Hopefuls are health conscious, have very active lifestyles, and prioritise quality time with family and friends. Their financial preparation is found wanting. They believe they have got “wiser and more resilient”. Fifty per cent are concerned about outliving their money. It may become necessary for them to curtail spending or find another stream of income. They have lived helpful lives and are concerned about the next generation.

The Regretful Strugglers struggled financially during their careers and led unsatisfactory lives which persisted into retirement. Whereas some were not able to save or had the benefits of high-paying jobs, the study found that some retirees did not take the necessary steps to plan for a successful retirement. This group has been affected by various setbacks during their careers, such as illness, caregiving responsibilities, death, divorce, and separations. Based on health or financial obligations they were forced to retire early, thereby prolonging their retirement years and truncating years of earnings. Most of them lived a life of regret and anxiety. Forty-nine per cent felt that life has not been kind to them.

The study recognises four significant pillars — health, family, purpose, and finances. For a comfortable retirement, it’s recommended that pre-retirees develop effective financial strategies, health improvement, quality time with families, and prepare for a life of purpose.

I strongly recommend that working adults save and invest regularly and wisely. Make that first step. Chinese philosopher Lao Tzu said: “The journey of a thousand miles begins with one step.” If you have been saving and investing in the right system, and are tempted to give up, remember this saying: “The last thing to grow on a tree is the fruit.” An expert financial advisor can assist you in your retirement planning.

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