Reasons Why Early Planning for Retirement Makes Sound Financial Sense

It is essential to plan early for life after retirement if you want to remain financially independent and maintain a comfortable standard of living when you stop earning.

A general observation in the pensions industry is that most people retire earlier than planned. This is usually due to health issues, redundancy/layoff, or family circumstances such as caregiving for an elderly spouse or relative. But few of us take these facts into account when thinking about our golden years.

Since 1998, all employers in the Cayman Islands are required to provide pension benefits to their workers. Silver Thatch Pensions was specifically set up to meet the requirements of this National Pensions Law. While the scheme goes a long way to providing security through a national contribution pension plan in the Cayman Islands, there is still a lot that the individual can do to prepare for a seamless transition from employment to comfortable retirement without financial worries.

A lack of preparation can mean retirement can be very stressful for you and your family. It’s a time when your expenses often climb just as your income drops, and without forward planning, your independence and security are at risk.

Before you can even start planning, you need to work out your goals – both financial and personal. How do you want to spend your time in retirement? Where do you want to live? Do you want to give up working completely? Answering these questions will give you some answers about how much money you are likely to need to enjoy your Cayman Islands retirement.

Retirement planning is different for everyone and changes over the course of our lives. Youngsters should be encouraged to save often and early. Thanks to the wonders of compound interest, the earlier you start saving, the less you need to save every week and the more you will eventually get back in compounded interest. Young people may not have a lot of available money to invest, but they do have time to let investments mature, which is a critical and valuable piece of retirement saving.

According to experts, even if you can only put aside, say, $50 a month, it will be worth three times more if you invest it at age 25 than if you wait to start investing at age 45, thanks to compounding.

A Cayman Islands retirement pension plan started early will also ensure lower premiums for greater long-term benefits. This is important in later years when marriage, children, education and other expenses start to mount up. Maintaining an existing retirement plan is a lot less expensive than starting a new one later in life, especially when you have a family to support and money can be tight.

Our 30s and 40s tend to bring a number of financial strains, including mortgages, student loans, insurance premiums and credit card debt. However, it’s critical to continue saving at this stage of retirement planning. You still have time to lock in that compound interest that makes these years excellent for aggressive savings.

Once the family is raised, the children have left and are beginning to support themselves, middle-age concerns begin to come to the fore. You should probably accept that when you reach your 50s you are probably at your peak earning capacity. There will never be more money coming into your household than at this stage of life. Many of your previous family expenses have either disappeared or been massively reduced, so it makes sense to put as much of this income away as possible to prepare for the future.

At this stage, you should also think about your life insurance needs and possible disabilities as you get older. Can your spouse and family survive financially without using up all your retirement savings should something unexpected happen to you? long-term care insurance will help cover the costs of a nursing home or home care should you need it in your advanced years. Health-related expenses can eat up all your savings in a very short time if not properly planned for.

Still unsure? Everyone has hopes for their retirement. But don’t be unprepared for what the future may bring. Silver Thatch Pensions is here to ensure that you have enough in your Cayman Islands pension plan to enjoy a better life ahead. With monthly payouts and competitive yields, we can help you look forward to a retirement where you can live life on your own terms.