The words ‘retirement’ and ‘pension’ are relatively familiar words, easily recognised by the average person. Yet, for some reason, these concepts are still shrouded in some amount of mystery within our local context.
Victoria Mutual Pensions Management (VMPM), in its latest YouTube video series, tackles this phenomenon, by partnering with social media personality and vlogger, Rushane ‘RushCam’ Campbell. The series, dubbed Debunked, features RushCam taking to the streets of Kingston to unearth popular opinion on varying pension-related myths from the unsuspecting public.
The result is the perfect medley of secret agent intrigue and meme-worthy interactions, quickly followed up by the impressive myth-busting skills of VMPM’s, Kandice Stewart.
Each episode in the series poses the question to the viewer: What are your retirement plans and what’s stopping you from meeting them? Well, we want to help you clear any hurdles in your path, so we are sharing some myths from Debunked and how they got busted!
Myth 1: I am too young to contribute to a pension plan.
Fact: Anyone 18 years or older, who is employed, can start contributing to a pension. The earlier you start, the better!
The Annual Retirement Scheme (ARS) , which is a personalised pension plan for self-employed, professionals and contract workers, is suitable for individuals between 18 and 65 years old and offers a tax-advantaged way of saving for retirement.
Myth 2: I must contribute to my pension plan every month.
Fact: You don’t have to contribute every month to your pension plan. In fact, you can contribute weekly, fortnightly or even once a year in a lumpsum deposit. This lump sum payment should be between five to 20 per cent of your annual salary.
Myth 3 – The National Insurance Scheme (NIS) and a Pension are the same.
Fact: NIS is the Government-mandated insurance scheme for employed persons. The contributions are minimal and unlikely to cover your post-retirement expenses. Private pension plans allow you to deduct up to 20 per cent of your salary for saving for your retirement. Together, your returns from both, along with other savings and investments, should help you to maintain the lifestyle you desire after leaving the formal workforce.
Myth 4 – It is better to contribute to an investment account than a pension plan
Fact: Having an investments account can be a wise financial choice, however, this should be supplemented by your pension plan, as you prepare for your retirement years.
In fact, your pension returns are a result of your pension plan’s investment in a range of investment products, such as stocks and unit trusts, by expert fund managers. The type of pension plan you choose will determine the value of your returns upon retirement.
The Approved Retirement Scheme (ARS) has four different portfolios to accommodate varying risk appetites. So, that should be a key part of your conversation with your pension advisor.
We hope we have cleared up things for you as you consider your retirement goals. Its important to chase the facts wherever they are and to take the steps you need to secure your future. Your Future Self Will Thank You!
Check out our Debunked series on YouTube, as we bust many more myths!
You may contact the VM Pensions Unit via email at firstname.lastname@example.org or by telephone at (876) 754-7265.