Take a look at your current financial situation
Where and how do you spend your money? What debts should you have paid off before you retire and how can you do that? Take stock of your spending now and decide what adjustments can be made to save money or reallocate it to pay off debt. Options include doubling up on mortgage payments and taking control of your credit card spending.
You might be surprised at what money-sucking habits you can easily change. Do you really need all of those magazine subscriptions? Could you make coffee at home every day rather than buying a morning cup? A little saving can go a long way.
Establish (or update) a will
Believe it or not, close to half of Americans over 50 don’t have a will. It’s likely that we Bermudians are the same; it’s a task that we promise to get around to, someday. If you are turning 50, someday is now. You need to prepare a will to determine how your estate will be distributed upon your death.
There are several options for writing a will, including online services and apps, but those will most likely be specific to other countries relevant laws so you should not assume they automatically work in Bermuda. The best approach is to work with a lawyer. A professional will ensure your will is comprehensive and legally sound.
Review your Health Insurance Plan
Take a moment to review your Health Insurance plan and confirm that it is the right one for your needs. As we get older, our medical needs change. Ensure that you have enough coverage to protect you from possible medical needs due to ageing. Once you retire, you might also need to establish an individual health insurance plan if you have been covered under a group plan.
The importance of Life Insurance
Life insurance increases in importance as you age. Considerations to keep in mind with your life insurance policy include the amount of debt you still have to pay off, how much you want to leave to your spouse, child(ren) and/or other family members and the amount you would like to donate to charitable causes. It’s never too late to consider your options in life insurance.
Update your beneficiaries
If you have a life insurance scheme or pension benefit in place review it regularly, preferably every year. Ensure your beneficiaries are up-to-date and instructions are appropriate for the ages of children, abilities of beneficiaries and other considerations.
Understand your pension
Argus works with our members to ensure that they understand their pension options and have chosen the best solution for their needs. Our 24/7 pensions portal allows access to balances and contributions, so you can keep retirement savings on track.
Our online pension tools are designed to meet the needs of Bermuda residents to plan retirement savings, find an ideal investment strategy, plan for children’s education and understand the effects of compounded returns on long-term investing.
The level of risk to consider for your pension fund should reflect your personal investment philosophy, as well as when you plan to retire.
If you prefer a stable return with no price fluctuation, the Guaranteed Account offers a set rate of return with no downward movement in the value of your account.
The Argus Select Funds offer a range of investment types that cross the risk spectrum. The Conservative Fund is a lower risk option with limited exposure to equities. Risk exposure increases with the Moderate Fund, which presents moderate growth with a meaningful exposure to equities and the Balanced Fund which has primary exposure to equities. The Growth Fund provides significant exposure to equities and for those with high risk tolerance or those with several years until they plan to retire, the Aggressive Fund has full exposure to equity markets and risk based assets.
Complement your pension income
We estimate that on average, to live comfortably in retirement, you will need 15 times your annual salary (watch our retirement planing video). That means you need to be saving now! Of course, your pension will provide you with money once you stop working, but you may also want to think about other sources of income. In Bermuda, many people take advantage of the rental market to make extra cash. If your kids have left home, consider the option of renting a room or unit as a way to save extra for when you do decide to stop working.
Take these steps, and then enjoy! As they say, the best is yet to come! Enjoy your ‘golden’ years.