Gerald Simons from the Argus Group shared his thoughts on the subject:  Retirement in Uncertain Times

On the economic front things are not very rosy.  In the National Economic Report of Bermuda 2008 the Bermuda Ministry of Finance points out that, in the USA, our major trading partner:  Gross Domestic Product might fall 2.5 per cent in 2009; The recession could last for as long as five quarters; Unemployment is rising (from 6.2 per cent in September to 7.2 per cent in December 2008), and some 2.6 million jobs were lost in the USA in 2008, the most in any year since World War II.  A similar story is told in much of the developed world.  Only a few emerging economies such as China and Brazil are expected to achieve positive growth in 2009.  The report also states that in Bermuda: Gross Domestic Product might decline by between 1.0 and 1.5 per cent in 2009 with a recovery in 2010; GDP growth was 4.6 per cent in real terms in 2007 and is estimated at 2.0 to 2.5 per cent in 2008; There could be a fall in employment income, retail sales and construction in 2009, and Inflationary pressure should ease in 2009 with the fall in oil prices

            Given all the doom and gloom what is a person to do?  The Argus Group has been actively encouraging people in Bermuda to take responsibility for their physical and mental health and well-being since we launched the Argus Wellness Programme in 2005.  What is good advice in good times is even more important in bad times.  People who exercise regularly, get enough rest, watch what they eat and take time to nourish their mental and spiritual health are better able to withstand the stress of the difficult days, and possibly years, ahead.

            In a similar fashion, now more than ever is the time to take care of one's financial health and well-being.  People who have a financial plan, follow their budget and have clear investment goals will feel more comfortable even as markets decline. Those who have put something aside for that proverbial rainy day will feel more secure.  If you do not have the time or skill to develop a financial plan, seek professional advice from an accountant or financial planner.

            Further, to improve one's chances of retaining a job or getting a new one, one should invest in training and development.  Yes, performance matters.  Employers will make every effort to retain their high performers especially in hard economic times but those with less skill will be the first to go if job cuts need to be made.  In a competitive job market it is the strong who survive.

            Today, it is not only the wealthy who are exposed to equity markets as was largely the case a generation ago.  Nearly everyone who is a member of an occupational pension invests in the stock market, usually through mutual funds.  Pension statements for the year ended December 2008 show declines of over 25 per cent in some cases.  While the Argus Group is pleased that its funds, the Argus Select Funds, have not declined as much as many of its peers in Bermuda, the unrealized losses experienced are unsettling.  Persons approaching retirement ask: "What should I do"?

            First of all, don't panic and refrain from making hasty decisions.  Maintain a long-term perspective when it comes to investing as the markets experience ups and downs on a regular basis.  If you are going to need the funds within one or two years, you might want to reduce your exposure to equities.  Determine if your current investment profile is appropriate and change it if necessary.  Just because the value of your investments falls, it doesn't mean that you have actually lost money.  You lose money only when you sell an investment at a price that is lower than when you bought it.  Make sure that your portfolio is diversified and professionally managed.  And take the time to educate yourself about investments.  Read the Wall Street Journal, Barrons or The Financial Times.

            You may also consider delaying retirement to accumulate more and to allow time for markets to recover.  Working part time is an option for some.  Others start small businesses in their retirement as many taxi drivers in Bermuda have done.

            For those who have assessed their situation and developed their plans to survive A poster that helped the people of London to survive the Blitz in the dark days of World War II seems appropriate during the current financial and economic crisis.


             The poster reads: "KEEP CALM AND CARRY ON".