“Pension is for old people” is a sentiment that many Jamaicans still live by. However, let us break that mindset with a practical scenario.

 Meet Andre.

He is 25 years old, recently started working, and makes the decision to contribute $20,000 every month to his pension plan. It seems like a lot at first, but he is thinking ahead and making a commitment to his future self. His pension plan earns a modest 5 percent annual interest, compounded yearly.

By the time Andre turns 65, he’ll have contributed $9.6 million over 40 years. However, with compound interest, his pension savings would grow to over $30 million.

Now meet Sasha.

She is 35 years old when she starts contributing the same $20,000 monthly, earning the same 5 percent interest annually. But she contributes for only 30 years.

 By the time she reaches age 65, Sasha would have contributed $7.2 million, and her pension savings would grow to just under $14 million. That is less than half of what Andre accumulated, even though they both contributed the same amount each month. This shows the power of starting early. Compound interest rewards consistency and time.

Then there is Jermaine.

He does not believe in pensions. He says, “Mi too young fi dat,” and instead tries to save $20,000 on a good month, maybe six or seven times a year. Over 40 years, he might save around $5.6 million, if he is disciplined and life does not get in the way.

 However, without the benefit of compound interest or consistent saving, that $5.6 million does not stretch far. And since it is not in a structured pension arrangement, he may dip into the savings along the way, for car repairs, school fees, or emergencies. By retirement, there may be very little, if anything, left.

The takeaway is clear.

Whether you work at a bank in Kingston, a hotel in Negril, or a shop in Clarendon – your future self will thank you for starting early. Pension is not for old people. Pension is for wise people who understand that one day, they will want to stop working and still live with dignity. Start now. A little each month adds up.

Reach out to VM Pensions Management today to begin your journey to a secure financial future: https://vmpensions.myvmgroup.com/