Hello learners! We have talked about earning money, banking, and taxes. Now, we need to talk about the future. And I do not mean next week, or even next year. I mean forty years from now. Retirement. I know, when you are young, being sixty-five feels like a million years away. You are thinking about buying a car or the latest phone, not grey hair and rocking chairs. But ask any grandma or grandpa in Jamaica, and they will tell you: life moves faster than you think. If you want to be sitting on a cool verandah in Mandeville or by the beach in Negril, drinking coconut water without a worry in the world, you have to build that life today. We call this building the Three Pillars of Retirement.The first pillar is the Government support, which is the National Insurance Scheme, or N I S. We mentioned this before, but now let us get into the gritty details. N I S is the safety net. Everyone who works in Jamaica must contribute. It is a partnership. You pay three percent of your salary, and your boss pays another three percent for you. That is mandatory. Now, listen closely because this is where people get left behind. To qualify for a pension for the rest of your life, you need to have made contributions for at least ten years, or five hundred weeks.If you work for nine years and then stop contributing, you do not get a full pension. You only get a one-time grant, a small lump sum, and then that is it. The money runs out. Also, the retirement age in Jamaica is gradually moving to sixty-five for everyone. So, do not just assume your boss is paying it. Check your pay slip! Go to the N I S office and ask for a record of your contributions. Ensure every week you worked is counted. This is your right, do not let it slip away.The second pillar is where the real wealth is built. This is your Work Pension or Private Pension. In Jamaica, we have two main types. If your job has a pension plan, it is often called a Superannuation Fund. If you are self-employed or your job does not have a plan, you open an Approved Retirement Scheme, or A R S. Here is the magic secret: The government wants you to save. So, they let you put up to twenty percent of your salary into these plans Tax Free.Let me explain why that is huge. If you earn one hundred thousand dollars, and you save twenty thousand in a regular bank account, the government taxes you first. Income tax, education tax, all of it. So you might only really have fifteen thousand left to put in the bank. But with an A R S or pension plan, the full twenty thousand goes in before the tax man touches it. Over thirty years, that extra money compounds and grows into millions more. It is literally the only way to legally hide your money from taxes and keep it for yourself later!Wait, there is another secret weapon called Employer Matching. If your job offers a pension plan, join it immediately! Usually, if you put in five percent of your pay, your employer will match it and put in another five percent. That is literally free money! It is a hundred percent return on your investment instantly. No bank in the world gives you that. If you do not join the plan, you are basically telling your boss, keep that money, I do not want it. Do not do that! Take the free money!But, be careful about something called Vesting. Vesting means how long you have to work there before you get to keep the money your boss put in. Usually, in Jamaica, it takes five to ten years to be fully vested. If you leave your job after only one year, you get your money back, but you might lose the money your boss put in. Always check the vesting rules before you quit a job. Sometimes staying just one more month can mean keeping hundreds of thousands of dollars.Now, let us talk about the silent killer of wealth: Inflation. Think about the price of a beef patty. When your parents were kids, a patty was maybe two dollars. Today? It is two hundred and fifty dollars or more! Now imagine when you are sixty-five. A patty might cost one thousand five hundred dollars! If you just keep your retirement money in a regular savings account or under your mattress, it will not grow fast enough to keep up with the price of patties. You will have a pile of cash, but it will not buy anything. That is why pension funds invest in stocks, real estate, and bonds. They aim to grow your money faster than inflation so you can actually afford to eat when you retire.This brings us to a very serious topic in our culture: The Sandwich Generation. In Jamaica, many adults are caught in the middle. They are taking care of their aging parents financially, and they are also taking care of their own children. They are the meat in the sandwich, being squeezed from both sides. It is stressful, and it drains your bank account. The best gift you can give your children is to take care of your own retirement. If you are financially secure, your children will not have to stress about taking care of you. You break the cycle of poverty. You allow them to focus on their own families. Being independent in your old age is the ultimate act of love for your family.And do not forget the tax breaks for seniors! When you finally do retire, the government gives you special treatment called Exemptions. Currently, pensioners get a Pension Exemption where a big chunk of your pension income is tax-free. At age sixty-five, you get another break called Age Relief. When you add all these up, a senior citizen in Jamaica can earn a very healthy monthly income without paying a single dollar in income tax. That is your reward for planning ahead.And one final bonus! Remember the National Housing Trust, the N H T? We told you that you can get refunds after seven years. Well, when you retire, you get a Special Refund. This is a lump sum of all the contributions you have made that you have not collected yet. It is like a nice retirement gift to yourself. So even if you never bought a house, that N H T money comes back to you eventually.Your future self is begging you to start today. Do it for them! Secure your bag for the long term.See you in the next lesson, learners!
