Best to also have a Personal Portable Pension plan too . . .

• Battle looms over Nortel pension‎: Another showdown between two groups of Nortel Networks Corp. pensioners is looming over the former telecommunications giant’s huge, underfunded pension plan…
• New Jersey governor to propose more pension, benefits reforms: Chris Christie is expected to propose pension and health benefits reforms that will cost teachers, police and other public workers more money…
• France’s bitter war over pensions‎: It is the cornerstone of the government’s pension reforms, change that Jean-Francois Cope, President of the ruling UMP party in the Assembly, …
• Rockspring To Invest $1B In Property For Korea Pension Fund‎: While the National Pension Service Real Estate Value Fund will invest across all sectors, it will have significant exposure to retail and office assets with …
• Pension funds ‘back in the red’: The UK’s final-salary private sector pension funds have fallen back into deficit, a position they have been in for most of the past two years. …
• Israel’s Ben Gurion airport shut by pensions strike‎: Unions representing staff at Tel Aviv’s Ben Gurion airport declared the partial strike after pensions talks collapsed. Israel radio said the staff at the …
• Lee Iacocca, Chrysler retirees sue over pension losses‎: Lee Iacocca and about 450 other Chrysler white-collar retirees say they lost a big chunk of their pensions when Chrysler went bankrupt, and they’d like …
• Ageing populations and fewer workers strain pensions‎: So for those countries with well-developed pension systems, there is a long-term problem from these population trends. Many state pensions come from …
• French strike brings trains and planes to halt : Schools, trains, planes and public services suffered widespread disruption in France as demonstrations unfurled across the country to protest against President Nicolas Sarkozy’s plan to increase the retirement age from 60 to 62.
• Sinking of the Bismarck legacy: The German Chancellor, Otto von Bismarck, introduced the world’s first state pension system in the 1880s. You had to be 70 years old – and the expectation …
• What retirement means to you‎: With the aftermath of the global financial downturn, retirement and pension plans are now uncertain for workers of all ages. In the UK changes to state and …

As you can see, global pension tension is heating up all around the world. This is all part of the “new normal” which basically means get ready to work longer and get a lot less during your golden years.

Portable pension plans are a means for people working abroad to build up a lump sum for their retirement – we can help you get one started.

In signing up for a portable pension plan you agree to a contract. This will be a minimum of five years but is best aimed at your earliest foreseeable retirement age. This will normally be between 55 and 60. You also agree on a monthly amount to put away. The more you put into the plan, the more there will be for your retirement. However, you should not take on an obligation you cannot fulfil.  All plans have a minimum contribution period, ranging from five to twenty-eight months, in which you must make the contributions. Beyond that you are free to discontinue, but discontinuation makes the plan less efficient financially. The flexibility to miss a few payments, if you lose your job or decide to go round the world, is there, but in taking out the plan you should not set the contribution level unrealistically high – your income might increase, but then so might your responsibilities. You should choose a level you are completely comfortable with.  A simple method for doing this is to take your annual disposable income (how much you have left over after your accommodation and living expenses are paid for, including an annual holiday/trip home) and divide this by two. Allocate the annual amount into twelve monthly portions: you should be comfortable with that (and the minimum is US$150 monthly).

This sum is best paid off a credit card – this is convenient, is cheaper than using a bank to make transfers, and after a few months you don’t really notice the money going out. Your monthly contribution is then invested into a series of mutual funds. Doing things this way gives you four advantages: 

• Access to a diversified range of funds.  The days of opaque mystery funds and lack of choice are long gone. You can be in range of funds, which will sustain overall performance and cushion you from the gyrations of the markets. Yes, you can be in a wide variety of stock funds; you can also be in high-grade or high-yield bond funds, in gold stocks, in resource stocks, or in property income funds.  Diversified portfolios do better in the long run. 
• Free switching. You can change your funds at any time, switching at zero cost. Diversification matters, but your portfolio can be re-balanced at any time. 
• Averaging. Investing monthly gives a huge advantage over lump-sum investment.  If the price of a fund falls, you buy more units the next month, and so on, until the unit price turns around.  As you have a large number of units, your gains will be much greater than with a simple lump-sum investment. Plus you don’t have to worry about ‘timing the markets’, which almost never works. 
• Compounding. These plans are long-term, part of the financial structuring of your life. Anything over ten years affords you the power of compound interest (dubbed by Einstein ‘the eighth wonder of the world’). A return of 9% doubles your money in eight years and quadruples it in sixteen. Your money makes money and the profits make money too.

 As mentioned, these plans are portable. You can take them to where you live next, even if that is the country of your own nationality (there will be some restrictions for residence in the USA ). As they are written technically as life insurance contracts, the investments are held by an insurance company with whom you have a contract for the value of those investments. There are no dividends or distributions. The whole value sits in your plan. There are no taxes to diminish the power of compounding and therefore the full value of the plan until you take the benefits at the end of the plan. 

And don’t forget – all the money you put in is your money.

Find a link to a graph concerning the “cost of delay“. Please don’t hesitate to contact me if you wish to look into setting up a suitable plan for yourself and/or family members. These plans can also be set up to save for education cost and other savings goals. Most plan providers offer special incentives, so it makes sense to compare.

Give us a call and we will help you get one going  03-5724-5100