VOL 2, ISSUE 2
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APRIL 2021
Bi-monthly Newsletter from VM Pensions Management Ltd
Financial Health in a Post-pandemic World
Financial Health in a Post-pandemic World After more than a year of pandemic life, many of us have adjusted, or kind of adjusted, to the new normal. With the global deployment of the vaccines under way, there now appears to be a light at the end of the tunnel. Even though the timeline is unclear right now, it’s likely that we will be experiencing postpandemic life sometime in the foreseeable future. The question is: are you ready for it? As disruptive as this period has been, it has also been a learning experience. Our experiences and the trends around us can be a guide for the preparation needed for what may lie ahead. And, while much has been made of mental and physical health over the last 12 months,your financial health is just as important. So, now would be a good time for a financial wellness check. One big lesson has been the importance of an emergency fund. If you don’t have one yet, now would be a good time to get it started. If you already have one, take another look at it now that you’ve seen how drastic an emergency can be, and see if you need to add anything to it. The equivalent of six months’ worth of living expenses is the standard recommendation but you should do what works for you – that may mean more or less than six months of income. Remember to ensure those funds are very accessible. Emergencies can crop up at any time on any day of the week, so keep your emergency fund in an account with little or no fees, from which you can get your money immediately or within 24 hours. For some individuals and families, recent events have also served as a reminder of what’s important. Economic uncertainty and the effects on our personal finances have intensified focus on the difference between wants and needs when it comes to expenses. A consumer survey in the US showed 58% of adults plan to continue cutting back on ‘wants’, a habit that could serve
you well going forward, as any money saved can either be put towards your emergency fund or your pension contributions. Speaking of pension, your pension plan could also use a review at this time. Have your goals changed? Have you accounted for the possibility of another pandemic hitting us during your retirement years? It’s a possibility that might not have been considered when you first mapped out your financial plan, but now that you’ve experienced it, there may be adjustments to be made. If you’re part of a group plan and you’re not yet putting 20% of your salary towards your pension plan, see if you can increase your monthly contributions. When it comes to pensions, more is more – and it’s tax-free. If you have an approved retirement scheme (ARS), your returns may have been affected by changes in the stock market or moving interest rates. You should give your pension administrator a call to discuss whether any changes need to be made. If you have an ARS with VM Pensions Management, talk to your pension administrator/ advisor about reviewing your projected rate of return depending on your time horizon. The pandemic has changed us and the world around us irrevocably. Some changes, like the convenience of being able to buy groceries and insurance online, have been good and some have been less so. In order to gauge your financial wellness at this point, it’s first necessary to take a look at yourself to see if any of the changes have impacted your outlook, your priorities or your goals. The post-pandemic world might be different, but the fundamentals remain the same. You’ll remain in good financial shape as long as you know where you stand, keep your goals in sight and stick to a plan you can adjust along the way.
you’re moving in the right direction. Budget like nobody’s business. Make sure you know how much money you have coming in and make sure you know how you’re going to spend it before the spending begins. You can use a spreadsheet like me, but I’m sure there’s an app for that. As long as you have an accurate picture of money coming in and going out, you’ll be able to control spending and make good decisions about saving and investment. It might be boring or tedious, but think of it like a game where money is the score. Start paying future you. Planning for retirement isn’t for old people. In fact, if you wait until you’re old, it will be too late. The best time to start saving for retirement is with the first pay cheque from your first job. Then make it a habit.
Dear Diane
Notes to Secure Your Future Congratulations on landing your first job! I know you have bigger dreams and this is just a start, so my wish for you is the patience and discipline to stick to your plan while you learn from the journey along the way. I’m so happy and proud to be watching you grow and making your own way as you get the hang of everything adulting brings. Instead of annoying you with my hugs and constant nattering about all the things I think you need to know, I’ve decided to jot them down. That way you can read them when you’re ready and have them with you if you need a refresher years from now. I’ll still be doing the hugs though! Planning your goals is essential. I know you have a plan now, but remember your plan is a living breathing thing. It will evolve as you grow, learn and want different things from life. Keep your plan in a format you can edit and revisit it regularly – I’d say monthly or weekly. And definitely check it whenever a major event happens in your life, like the new job you just got or you win the lottery. Or MUCH later on when my grandbabies are on the way. Targets will be reached, goals will change, but as long as you have a plan you’ll always know when
So, before you get paid this month, find out if your job has a group pension plan and how much you’re contributing. You can do up to 20% of your pay, so max it out if you can – it’s tax free! I know it feels like a sacrifice but think of it as more money in your pocket,especially as it grows interest over the years. You’re really paying your future self. Trust me, you’ll thank you later. If you don’t have a group plan at work, start your own approved retirement scheme (ARS). It’s also taxfree and the same 20% max applies. Set it up as an automated deposit and you won’t even have to think about it again. Knowledge is power. The more you know the better. Read what you can and keep up with events that affect the financial markets. You should also keep your financial advisors close. Talk with your investment advisor or pension administrator whenever you need to make a major decision or change to your plan. Their financial expertise and up-to-the minute knowledge of the markets will prove invaluable on your journey. And last but certainly not least, remember to call your mother. I know we talk a lot, but I’d like to keep it that way. As the years go by, you may need my advice less, but I’ll always be here for you. So, whenever you need to vent, laugh, cry or celebrate, you know where to find me. I may also be up for some babysitting when the time comes, if my blood pressure can take it LOL. Keep these notes safe and let me know how it’s going as you go along.
Love,
Mom
MEET THE TEAM
Natalie Bennett SENIOR MANAGER, BUSINESS SUPPORT
An exceptional and goal oriented individual, Natalie holds an MBA from Edinburgh Business School and a Bachelor’s of Science degree from the University of West Indies with a major in Actuarial Science. Natalie holds the position of Senior Manager, Business Support, where she oversees the day to day operations of the business. Ms. Bennett has spent her entire career spanning almost two decades in the pensions industry holding positions such as of Pensions Administrator, Pension Analyst and Manager Risk and Compliance. There is more to Natalie beyond pensions, in her down time she bakes cakes and other tasty treats; with her favourite being fruitcake (Christmas cake) paired with Bailey’s Rum sauce.
H E A LT H & W E L L N E S S
Uncovering Asthma Misconceptions This year’s theme for World Asthma Day, provides a call to action to address common widely held myths and misconceptions surrounding asthma, when the truth is:
Natalie is an explorer and uses the weekend to check out some of Jamaica’s “’hidden gems”. Natalie’s recommendations – Dornoch Riverhead, Trelawny and Colbeck’s Castle, St. Catherine.
1. Asthma can occur at any age (in children, adolescents, adults, and elderly) 2. Asthma is not infectious. However, viral respiratory infections (such as common cold and the flu) can cause asthma attacks. In children, asthma is frequently associated with allergy, but asthma which starts in adulthood is less often allergic. Click the link below for more facts and some widely held myths and misconceptions concerning asthma. Uncovering Asthma Misconceptions: https://ginasthma.org/world-asthma-daymay-5-2021/
VM Pensions Management Ltd 73-75 Half Way Tree Road Kingston 10, Jamaica
TERMS TO KNOW POOLED FUNDS
Pooled funds are funds in a portfolio from many individual investors that are combined for the purposes of investment. Mutual funds, hedge funds, exchange traded funds, pension funds, and unit investment trusts are all examples of professionally managed pooled funds.
Tel: 876-754-7265 Fax: 876-754-8359 Email: pensions.info@myvmgroup.com