Gone are the days that you did not need to plan for your retirement because no one lived to retirement age
 

If you retire today at age 65, you can expect to live another 20 - 30 years.  As such, you need to start planning as early as possible to ensure that you will have sufficient income to support you in your many years of retirement.  According to the 2000 census, the median age for the total population was 36.9 years.  By 2030 the median age is projected to increase to 43.2 years. This means that by 2030, half of the total population will be over 43 years.

Due to advances in medical technology and an increase in health 'consciousness', life expectancy is increasing and will continue to rise.  The birth rate is declining.  There were 1,138 live births in 1950 and 838 live births in 2000.  So, what is the message?  We have an ageing population, longer life expectancies and lower fertility rates.  In order to deal with these challenges, we, as a country and each of us personally need to reflect on how these factors will impact upon our future. 

Various studies suggest that you will need an income of at least 75% of your salary at retirement in order to maintain your standard of living.  So, if you are used to eating out once a week and travelling every other year, you will need to receive an income of at least 75% of what you earned before you retired.  You should really aim for the total replacement of your income. 

The pension plans that have been established to provide us with retirement income include. Contributory Pensions Act 1970 (Social Insurance) All persons over the age of 16 who are gainfully employed for more than four hours per week are required to contribute.  The current maximum benefit, assuming that you have contributed from 1968, is $1,137 per month (or $13,600 per year).  The benefit you receive is based on the number of contributions made and your years of participation in the plan.  National Pension Scheme (Occupational Pensions) Act 1999 In order to ensure that employees have additional retirement income, it became mandatory in January 2000 for employers to establish an occupational pension plan for their employees. In order to receive an adequate pension, contributions should be made to a pension plan over the course of your entire working career.   

We are facing challenging times ahead.  In order to ensure that we will have adequate income to enjoy a long and comfortable retirement, it is important for us to plan ahead.  You have a huge part to play in determining how well you will enjoy your retirement years by contributing 10% of your salary to a pension plan from the age of 30, you could expect to receive a pension that is about 45% of your final salary at retirement based on reasonable assumptions about growth and inflation to age 65. If you start contributing at age 40, your contributions may only provide you with a pension of about 27% of your final salary at retirement.  As you can see, this demonstrates that starting earlier makes a significant difference in the amount of pension you will ultimately receive.

Will you be able to afford Christmas gifts for your grandchildren or just a card?  Will you be able to travel regularly or just every once in a while.  Plan early.  Start now.  With determination, discipline and commitment, you can achieve the retirement that you want.