Continuing series on the Bermuda Investment Primer.Aside from seeing relentless withdrawals from your paycheck, assuming that you are checking each month to be sure that your employer is contributing his/her share into your pension fund that’s right ten percent each and every month, how much do you know about your future lifeline?Retirement pension planning is a tough subject for discussion. You know you need a pension, but you really don’t want to give up cash for some distribution point in the future when you could very much use that cash today. Financial independence (a better choice of lifestyle connotation than retirement) is a scary thought. After all, you aren’t sure where you will end up physically, let alone whether you’ll succeed financially to assure a successful retirement.These perceptions, uncertainty, and misconceptions of a natural life progression are called fear of the unknown, fear of getting older, fear of losing control, fear of losing money, fear of not having enough to live a life of dignity and personal reward. Constant stress due to incessant worry about retirement could (and did in those days of no retirement funds) literally shorten your golden years. However, enter government pension programs the world over that sought to alleviate this social anxiety by keeping citizens off the government dole, while mandating that regardless of your feelings or lack of incentive, you as a citizen or resident will be forced to save for your old age. Finally, there would be some sort of a safety net for seniors as they left the workforce.Conversely, retirement is a marvellous word for the advertising media, mass retail marketers, geriatric personal care retailers, pharmaceutical companies, investment advisers, portfolio managers, retirement planners and the like.That is because there are more people close to retirement than any other demographic block today.These numbers represent money: to be made, to be saved, to be spent, to be invested, money profits to gain, and to be lost. Trillions of dollars (dutifully saved in incremental progression by soon-to-be pensioners) are estimated to be floating out there ready to be deployed, if retirement estimates of savings and spending habits are to be believed.Lots of money to be sure, but what really matters most to mature individuals? Healthy lifestyles and medical care costs are the two most important criteria that retirees focus on that they feel they cannot control. Inflation and Investment performance (net of all fees) come in a close number three on informal polls. These are my observations in working for many years within this 40 percent segment of a client’s life. I really can’t take any credit for this astute statement almost all those contemplating retirement express the same views. Yes, it is 40 percent when you consider your life split into phases:Birth to age 14 fully dependent on someone or something to satisfy ones needs.Fifteen to 22 semi- or fully rebellious teenager years well, some exceptional individuals display fiscal maturity and sound reasoning well beyond theirs and their parents’ years.Twenty-three to 64 the young career professionals wending their way towards mature career achievement.The career phase of an individual only covers forty years of a lifespan, today projected to age 95 or above. The thought of starting a life fully dependent on those that generally care about you, then ending up the same dependent way 50 years later (hopefully with someone still caring about you) is completely repugnant to any self-respecting adult. But, it is a hugely embedded fear looming large as we age.Enough on the worry about our physical selves, we know what to do there, absent a serious illness. We just need to elevate off our horizontal planes for some continuous upright activity and cut back on general food consumption (do you really need three large meals a day, no nation eats as much as us democratised Westerners). But, how can we plan more carefully for those uncertain financial factors?Granted, economically, Bermuda is a tough place to live. We love it, but we can’t predict many costs with any sort of clarity. We particularly cannot estimate what it is going to cost us to live here in the future. Inflation and the incessant rise in basic necessities continue to eat away at our dollar purchasing power every single day. The laments, confusion, frustration and in some cases, anger, spilled over into the public domain recently with the debate on the cost of food. We all have to eat something to survive. What we choose to buy and how we spend our money determines our personal inflation rate. What government will assess on every man, woman, and child in tax levy garnishment to reduce our country’s mountainous debt cannot be predicted. It will just be there another detriment to personal savings.We can try to calculate the effect of inflation here in Bermuda on our retirement savings plans.There are so many unanswered questions, assumptions and estimates to consider:How much government will continue to spend and its effect on me and my family?How much will it cost us in increased taxes?How much will it cost us in increased medical and healthcare premiums?Can we control our other household costs?Will my pension and savings take me to where I want to go?What am I invested in?Do I even have a clue what my pension portfolio managers are doing with my pension? Will it be enough?One fact is certain. Inflation is not three percent in Bermuda; you can forget what those statisticians say.Retirement calculators Available for more than 30 years in the US since the inception of the internet, these self-help tools are offered by two of four pension providers in Bermuda. How do they work?Next in the series on investments and retirement: stay tuned for hints on using generic web-based retirement savings calculators. Setting up your own personal inflation rate. Survival retirement budgeting at its finest. Your retirement pension portfolio fees may be eating up your profits. Planning for retirement the old-fashioned way.Martha Myron, CPA CFP (US) TEP is an international Certified Financial Planner™ providing Financial Counsel for Cross Border Living™ on international tax, estate, and retirement strategies for Bermuda residents with US connections, and US citizens living and working abroad. Member of the American Citizens Abroad ProfessionalsTax Advisory Council. www.americansabroad.org Contact mmyron[AT]patterson-partners.com or 296 3528 at Patterson Partners Ltd.