This is not a fairy tale: it does not begin once upon a time” Once upon a time, a frail elderly woman asked her daughter “do you think my money will last until I die?”.” The daughter did not know how to answer.” A few weeks ago, I sat in on a discussion when the question was posed “Can people live too long?”” The surprising answer was yes they could, if they outlive their money.” Of course these questions and answers raise other questions. How much money is enough money to put aside? And where should we put it? And how long will it last? And how long will we live?” Do we run the risk of suffering the fate of the rich fool in the Bible? When, during our dialogue with people about social security benefits, we tell them about pension at age 62 (or higher), they almost all tell us that they would not live to see pension age, as if they knew when they were going to die, while secretly wanting to live a long healthy life.” Some people do die before pension age, but not if they can help it.” And again, the evidence suggests that most of us will not only live to see 62, but that our life expectancy has increased, especially if we follow wellness programmes that are everywhere these days. I have a friend who claimed to have been perfectly healthy all of his life until he became 69 and then he had a myocardial infarction. Turns out, he was not healthy, he was merely ignoring the signs his body was giving him while he pursued enough money so he could outlive his money. We need to be careful not to confuse healthiness with ignorance!”” His quest for healing took him first to the UK and then to Trinidad. He found treatment in the latter, but one treatment cleaned out one of his savings accounts and started on another.” He is still alive and his pension is now his mainstay. I am told that the elderly want three things ” one is to be as independent as possible for as long as possible (I don’t want to be a burden to my children), another is to outlive their bank accounts, another and the third is not to linger and to have a good send off when their turn comes. When, after seven years of providing self-employed coverage, we conducted a survey and asked respondents about their financial plans for their future, 35% of them said they are banking money, 10% said they are investing in real estate, 17% had access to a pension, but 16% were making no plans!”” Indeed, even now, only one in every three self-employed person bothers to keep their Social Security current.” So what do you intend to do when and if you get sick and the interest on your savings along with the savings itself is insufficient to take care of you?” What will you do when you want money and you cannot get the property sold?” What will you do when the rent from the property is coming at a dribble while the bills are stacking up like pancakes?”” I have seen many persons end up being public charges who owned enough property to live decently. They pass their property on to friends and sometimes even to relatives on condition that they be cared for until death. And as soon as the transfer is complete, the friends and the relatives disappear. Social Security does not provide direct sickness benefits to pensioners ” at the moment. But you have an opportunity to tell us if you want it and at what conditions (including costs). What we do provide is an income, a steady income in the form of a pension.” This income could well provide some of the breathing space needed to maneuver for the sale of the property, or allow the fixed deposit to mature.” Or that space may provide time while you await the cheque from your insurance company ” or the deductible determined by the insurance company. The point is, there is room for all of the above ” private investments, life (and other insurance) and pensions.”” I have already made the point that some people, by virtue of their preparations in the earning stages of their lives, end up having greater disposable income post retirement. It is also true that post retirement, and despite the nation’s best efforts at providing affordable care, spending on health increases considerably. There are some pension systems that are similar to bank accounts in that they maintain individual accounts for members.” They too have to be concerned about life expectancy but their response to it is slightly different to our system. For the individual, our system becomes bottomless ” we must find a way to pay at the promised level or better. In the other system, the payment may vary and it may run out before the member dies, unless some godfather voluntarily steps in. The greater point though, is that there is room for all of us in a Social Security system.” Pensions matter!
