Fortress Encourages Barbadians To Take Retirement Seriously
For most individuals the thought of planning for retirement is often seen as a daunting one, however, Barbadians are being encouraged to take this issue seriously with a view to ensuring life in their later years is made much more comfortable.
Fortress Fund Managers Limited (Fortress), Barbados’ leading manager of mutual funds, is taking the lead in educating the Barbadian population about the importance of this process and the relatively simple instruments they can employ to achieve a peaceful retirement.
At their recently held second annual Investment Forum, officials of the 15 year old firm made the point that the loss of a regular income stream after retirement has a direct impact on the ability of individuals to maintain the quality of life they were accustomed to when employed, unless they have accumulated a significant level of savings.
Rene Delmas, Pension Director at Fortress Fund Managers Limited, also added that relying solely on the provisions made by the National Insurance Scheme (NIS) is no longer seen as the best course of action given its limitations:
“NIS has its limitations, one example being the lack of coverage for individuals on part of their salary in excess of Bds$4,090 per month. The maximum you can get from the NIS is 60% of the above limit and the reality is benefits could be further reduced in the future if there is deterioration in the financial strength of the scheme. We therefore ask individuals to consider why they would wish to retire on this minimum pension when they can save during their lifetime and have more income to help maintain a higher standard of living.”
Delmas pointed to a Registered Retirement Savings Plan (RRSP) as being one of the best instruments to use when looking to save during one’s lifetime for the inevitability of retirement, noting the superior earning gained as opposed to holding money in a saving account:
“The returns on a RRSP, particularly one managed by Fortress are superior to the interest gained when holding one’s money in a savings account. Additionally, placing your money in a mattress or saving account means that you face the risk of inflation “eating away” at your purchasing power over time as inflation rates tend to be higher than that of savings rates.”
The experienced Pension Director also made the point that with the Government’s removal of the mutual fund tax allowance, RRSP’s remain the only instrument through which this benefit can be attained, however, just as with mutual fund contributions, this must be done by December 31, 2011.
Fortress operates an innovative, low cost RRSP with flexible investment options allowing the owner to choose how best his/her contributions are to be invested. Options available include combinations of the Fortress Caribbean Growth Fund (Equities) and Fortress Caribbean High Interest Fund (Bonds), both well managed funds with a history of positive performance, generating annual compound returns of 10.7% and 5.7% since inception in 1996 and 2002 respectively, according to September 30, 2011 figures.