When Was the First Time You Heard About Retirement Planning?

Most people can't answer that question with a real memory. Nobody sat them down and explained it. It got absorbed in pieces, a payroll deduction here, a comment from a parent there, until adulthood arrived with a vague sense that something was being handled, without anyone ever confirming what or by whom.

The Three-Legged Stool

Retirement planning gets described as a three-legged stool, and the image holds up. One leg is whatever the government provides automatically. The second is whatever an employer adds on top, if it adds anything at all. The third is whatever a person builds on their own. A stool missing a leg doesn't collapse the moment it's built, it just sits unstable, and eventually somebody leans the wrong way and finds out.

The Leg Nobody Builds

Most people can describe the first two legs. Almost nobody's looked closely at the third, because it's never been anyone's job to teach it to them. The government leg and the employer leg both run on formulas set by someone else, with caps and minimums that don't move with the cost of living. Neither one was designed around any one specific life. The third leg is the only one shaped by a decision, which also makes it the only one that ever goes missing entirely.

What a Third Leg Looks Like in Practice

Call him Kevon, an illustrative example, 25 years old today. At 25, he starts putting $2,793.65 a month into a guaranteed retirement plan, a real Sagicor Saver Series Endowment to Age 65 illustration for someone his exact age and health profile. Over 40 years, he pays in $1,340,952 total. By 65, the plan guarantees him $3,959,260, regardless of what markets do in between.

That number sounds large sitting in 2066. Run it through 40 years of inflation at 3.5%, a dollar today needs to grow to roughly $3.96 just to buy what it buys now, and $3,959,260 lands close to $1,000,000 in today's purchasing power. Guaranteed, not projected. That's what the third leg can look like once someone builds it, standing next to whatever the first two legs provide.

Why the Timing Isn't Just a Detail

The version of Kevon above started at 25. The same guarantee, started later, costs more every month to reach, because there are fewer years left for it to grow into. None of that makes the third leg easier to build later in life. It just makes the version available at any given moment smaller than the one available the year before.

What Happens Once the Paycheck Stops

Retirement isn't a single day, it's a stretch of years living on whatever legs got built beforehand, and that stretch keeps getting longer as life expectancy rises. Most pensions, including the NIS minimum of $3,000 a month, pay the same fixed amount every month for life. That number doesn't rise with the cost of living. It hasn't since it was set in February 2012.

The longer someone lives, the longer that fixed number has to hold up against inflation that never stops moving. A pension that feels adequate on the first day of retirement buys a little less every year after, and by the later years of a longer retirement, it can end up covering a fraction of what it once did. The pension didn't get cut. Inflation just kept moving while the first leg stayed the same height.

This is the part accumulation alone doesn't cover. Building the third leg by 65 matters, but so does what happens to all three legs every year afterward, for as long as retirement lasts, and people are living longer than the formulas assumed. A plan that only answers "how tall is the leg by 65" and stops there has answered half the question.

If This Is the First Real Explanation You've Gotten

If nobody has walked you through how these three legs fit together for your own numbers, that's normal, not a failure on your part. It's just never been anyone's job to do it. If you'd like to see whether your own stool has three legs or two, book a free consultation at daronjacobsfinancial.com. Bring your age and whatever you know about your pension, and we'll work out the real numbers together.

Kevon is an illustrative example, not a real client. Figures are drawn from an actual Sagicor Saver Series Endowment to Age 65 illustration for a 25-year-old, non-smoking male.

Daron Jacobs, RFC, FSCP

Senior Financial Advisor

Sagicor Life Insurance Trinidad and Tobago

1-868-759-8359