Question: Please help me. I am a matron at an infirmary and I'm finding it very difficult to survive and save for my pension. I am 51 years old, going to 52 soon. My salary is $123,222.99 before taxes and deductions.

My deductions are as follows:

Taxes - $31,906.08

Health Insurance - 454.20

Life Insurance - 2,399.71

" " 350.00

Family indemnity - 1,400.00

Scotia Mint - 4,500.00

Bank Loan car and other - 17,800.00

Omni - me and my daughter - 1,500.00

Total $60,309.45

I am now left with $62,913.54. Rent is $19,000; helper to care for my mother, $14,000, if there are four weeks in the month; light $4,500; water $1,500; phone and Internet $4,420; food $10,000; medications for me and mother $8,000; gas for work $3,000. These expenses total $65,420.00. This makes a grand total of $125,729.45.

As you can see, there is nothing for any savings for my retiring years and I do not own a home as yet, which seems a lost cause at this point. It would be very devastating if I should get sick now because I am an only child and I am the only breadwinner in a family of four (me, a son, a daughter and my mother.)

My daughter's father is in one of the small islands and he sends approximately $30,000.00 each month. so that goes for her schooling and assists with the purchasing of food and other small items. I also try to save something in her savings account. But what about me?

I anxiously await your suggestions and help. Thanks in advance.

- Lyn

PFA: I understand your concern, but all is not lost. You are doing several things right and are clear about your immediate short-term goal and your primary long-term goal. There may even be some good things you have not recognised.

Here is what is good about your situation. You know where your money is going. You have a risk-management programme in place in the form of life, health and final-expenses insurance. It does not seem that your coverage is substantial, but that is not what matters most. You are also aware of the need to plan for retirement.

You have genuine reasons to be concerned, though. Thirteen years is not a long time to prepare for retirement and you do have some debts.

Emergency fund source

How then do you source money to set up an emergency fund and a retirement fund? One option is to move to a better-paying job - one that you would find satisfying. That could be a tough one. Alternatively, you could learn a skill that you could use to generate additional income when you are not running the infirmary. That could be challenging too. But it could prove helpful in your retirement years.

Another option is to reduce your spending. Your ability to do so depends on how your money is being used now. Your insurance premiums and loan-servicing charges are fixed expenses that do not give you room to make adjustments.

To squeeze out any additional savings, you would need to cut variable expenses, such as light, water and telephone. I notice you have made no mention of discretionary expenditure, such as entertainment, which is usually the first type of expense to go in a budget-restructuring exercise.

You have not said when your loan is due to be repaid. Whenever that happens, you should add those newly available funds to your emergency and retirement savings. (If you look carefully through the records of your spending, you may even find $1,000 or so lurking.)

Are you sure you have no savings for retirement? Do the insurance policies have cash values or investment values? What about the bank-assurance policies? Granted, in one case, your daughter is also covered.

Which of your goals have you been planning to use these policies to meet? Insurance is a very effective means of long-term savings. Do not rule it out as a source of retirement funds.

If you doubt you will be able to increase your income to a satisfactory level, or save enough, or generate a good enough yield to build a meaningful fund for retirement, you should consider postponing retirement beyond age 65. Your skills and experience can prove useful then.

The Approved Retirement Scheme should be a good instrument for building your retirement fund. You may contribute as much as 20 per cent of your income to it and benefit from the favourable tax treatment accorded contributions and investment income earned thereon.

Start your fund with what little you can now. There is scope for it to get better with time.

For free money management advice, email: finviser.jm@gmail.com.