Not long ago, I was approached by one of those insurance sales guys, yes â€“ the kind that will just call you up at work or meet you on the street, and just start telling you about how insurance is a great thing to have just in case shit happens (so what happens if shit never happens, donâ€™t think I should get back my money). Honestly, Iâ€™m not a big fan on Insurance plans, particularly life insurance plans â€“ health insurance yes but life Insurance no thanks. I prefer taking my changes saving my money in a high interest savings account or invest in some other type to longterm investment.
But this is not my topic for this post, maybe sometime in the future I will write a post on why I not a big fan of life Insurance plan, but for now letâ€™s talk about the retirement in Dominica. After talking with the Insurance guy, I started thinking about my retirement and would I be able to main this comfort life style Iâ€™m living now into retirement years. Presently Iâ€™m 29 years, and besides social security and my personal savings account â€“ my retirement years looks very dismal. True, if I save as much money as I can that by the time Iâ€™m 60 I will have a substantial amount of money in my savings. The only problem with these savings accounts, the bank interest rates are horrible – at least in the Caribbean. Read my post on: Why Banks Exists?
So I began ask myself some really simple questions (suggest you do the same):
1. Do I want to work forever at something or do you want a true retirement?
2. How much money do I want bring home on each paycheck?
3. How much lower could that paycheck be before it would bother my life style?
4. Do I have any documentation about my retirement plan at work?
After answering these simple questions I got a better prospective on my retirement goals, rather than having to be talking about complicated (Insurance) plans and confusing numbers.
On the other hand, there are lots of people who are just the opposite and like running the numbers. If that works for you, go right ahead. But if youâ€™re like me, and donâ€™t like numbers too much, try answering the questions.
Another great way to get some great insight on retirement, is to have as many discussions with people who are already in retirement. Listen to their opinions and figure out what you think will work best for your retirement goals.
â€”â€”â€” Personal Note â€”â€”â€”
My retirement goal is to have true retirement, but not with much free money to spend. I want to work at least part time in retirement doing something I enjoy doing or contributing something back to the community. Basically, my baby-boom years will not be all about boat cruises and watching the grandkids. 🙂
Photo Source:Corbis Photography
I’m not sure what kind of life insurance you are talking about, but if you have a family and you are bringing in the imcome you really should have it. Your family needs to be taken care of. My parents had it until the kids were through with college and then they dropped it. I have it because I am the main bread winner at the moment and I need to make sure everyone will be okay if I get hit by a bus or whatever.
I understand your situation and why you chose to have life insurance â€“ you want to make sure your family will be ok in the event something happens to you.
Right now, Iâ€™m not sure whether it’s a personal vendetta Iâ€™ve towards Insurance companies in the Caribbean. And Iâ€™ve come learned too many cases were Insurance companies come up with some type to technically or clause in their contracts not to pay the full sum of the money that youâ€™re initially insured for.
At this stage of my life, Iâ€™m not marry and donâ€™t have a family – as I said in my post, Iâ€™m willing to take my chances investing my money in some other type of long-term investment (E.g. CDâ€™s, Property). Iâ€™m not sure what the future will bring â€“ maybe I might just have a change of heart towards these life insurances.
I was interested in what annual percentage rate of compound interest it would have taken for our investment in our house to triple in 30 years. I used the compound interest rate calculator at
The rate is shockingly small: 6.706100578%
Still it is much higher than we could have earned with any bank deposit, although it is surely far less than if weâ€™d been able to have invested the money (but of course we needed a place to live).
From the Web site:
Let us suppose you are 20 years old and wish to retire at age 65. What amount of money would you have to deposit at a 10 per cent rate for this one deposit to make you a millionaire?
We want to solve for principal so click on that button, then input:
TOTAL = 1,000,000
RATE = 10 per cent.
Our answer shows that one deposit of $13,719.21 at 10 per cent interest at age 20, allows you to be a millionaire at age 65.
This shows you the incredible earning power of compound interest. It gives you something to think about doesn’t it?
Invest soon, because one canâ€™t get the time back.
As to insurance, remember you “win” the bet if you die sooner! Only buy term (no cash value) insurance because it’s the least expensive, and invest other money that you can. Never have insurance unless you need to leave money for others after you’re gone, because that’s a waste of money.