Retirement: what are your concerns?
This new monthly series on retirement, will be featured in the third week of every month.
Retirement is a big deal everywhere. Longevity in so many countries has produced long-tailed retiree populations of epic proportions.
Governments, the last resort for individual social care, worry about oldster statistics, periodically posting their concerns relative to maturists, generally, around the accountability time for actuarial estimates of their unfunded pension liabilities.
Globally, in my humble experience, it is extremely rare today to read of any government, state, municipality, or commercial entity that has fully funded social pension programmes.
These social concerns were minimal decades ago; ancestors before our current group of geriatrics — actually don't call us that — often conveniently crossed the golden border to their maker way ahead of ripe old age. Certainly, very few going concerns had the financial wherewithal or were given legal, moral, imperatives to offer retirement pensions.
How our ancestors managed then without pensions is beyond me, although between early mortality, dependency upon larger family support, and the abhorrent “poor house” tales of those days — indications were that these were not times of serenity for the retiree or their families. Back then, you did what you had to do and hoped for the best.
In our current decade, anecdotal comments indicate that individual retirement in Bermuda has not been the golden sunset of idealised media projections for certain individuals either.
In some instances, it appears that individuals are coping with difficult financial straits, have lost, or can no longer keep, jobs that brought in survival-comfort cash, and have or will need to be heavily reliant on relatives and friends just to survive.
Another refrain, as noted by both our politicians and the general populace in local press, is that individuals and families, close-to, or retiring have left, or are planning to relocate from the island.
Bermuda statistics reports state that our retiree population is growing and will be the largest age segment in the near future. According to Bermuda's Population Projections 2010-2020, the indicator of ageing is the old-age dependency ratio which estimates Bermuda society's capacity to maintain the quality of life of seniors.
In 2010, the old-age dependency ratio was 19 and by 2020 it will soar to 30. This means that in less than two years, there will be 30 seniors, 65 years and older, for every 100 people of working age, 15 to 64 years (https://goo.gl/HvLCGQ).
This is a dominant fact in many neighbouring countries also: United States, Canada, United Kingdom, Europe and so on. To read more on this topic, see “The Greatest Retirement Crisis In American History” in Forbes magazine, by Edward Siedle, March 20, 2013 (https://goo.gl/buLeKj).
Facing these facts head on, we know that Bermuda retirement is, and will be, a growing challenge for all: those individuals in that age group, government providing support, families challenged, employer / employee relations tested, and communities expected to give more.
Moneywise wants to start an open dialogue regarding these challenges.
So, to illuminate these retirement and related family situations, hopes and plans, I invite readers to anonymously submit their retirement questions, concerns, and experiences.
This is your opportunity, readers, to describe (and share anonymously) retirement anxieties, challenges, issues, and hopefully some success stories.
When we read of shared experiences it helps everyone facing the same, or even tougher, challenges to anticipate now better planning along with contributing to stronger community connections.
Statistically, we know that hundreds, but more probably, thousands of Bermuda residents are planning for (or are in retirement now) in the near future.
Moneywise will provide answers, reference sources where available, along with current information on retirement protocols, products, support services, investments, pensions, and trends.
I want to hear your stories. Please write to me, or send me an e-mail with your thoughts, concerns, or a personal story. All reader information, as always, is kept strictly confidential.
The “Bermuda Realistic Retirement™ Reviewer” will be featured the third week of every month in The Royal Gazette. This retirement series will be linked where applicable with Pondstraddler Life™ Financial Perspective planning given that retirees are relocating, investing, or linking to relatives abroad.
Here are some questions, and concerns that have trickled in from readers, including a group of volunteers from a few years ago who shared their retirement challenges with me. I do thank them profusely. As well, I will include my observations of more than 30 years in the international financial planning environment spectrum.
• Does any firm audit my Bermuda National Pension Scheme for investment allocations, appropriateness for me and so on?
• How do I know if all my contributions are there and will my pension administrator notify me if amounts are missing?
• What is a minimally satisfactory lifestyle in retirement?
• How do we know if we have enough money?
• I don't know if we can stay in Bermuda.
• We are totally financially stretched to afford health insurance. Should we just go “bare” and do without?
• What is my biggest retirement concern?
• My children said they would take care of us. Should we give them our home?
• What is an annuity? Can I wait until interest rates are better?
• What is the difference with a drawdown account — is that a better withdrawal choice?
• How are annuity payments calculated?
• I will lose my house if I can't pay the remaining mortgage. Why can't I get back all of my Bermuda National Pension in a lump sum? The UK has changed their pension regulations, why can't we?
• I want to work until I drop because I need the money. Can my employer make me retire?
• What will happen to me if I run out of money?
• We have too much debt — in our late 50s — how are we going to survive retirement?
• How do we plan for long-term care?
• If I relocate to a cheaper jurisdiction, can I still get my Old Age Contributory Pension from Government?
• My spouse has passed on. Finances are messed up. Will I still get his pension?
• Are we ever going to have reverse mortgages in Bermuda?
• We do not really understand our pension investment statements.
I am willing to bet, readers, that you have additional questions and information to share!
• Martha Harris Myron CPA JSM: Masters of Law in International Tax and Financial Services. Dual citizen: Bermudian/US. Pondstraddler* Life™, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond and The Bermuda Realistic Retirement Reviewer™. Personal financial columnist for The Royal Gazette. Contact email@example.com