- July 3, 2020
The Novel Coronavirus (COVID-19) pandemic has significantly disrupted economic activity worldwide. The pandemic has thrown many older workers’ plans into disarray, and some have even lost jobs before they planned to retire. If you’re in that boat, you’ve got a lot of company. Here are five steps to help you manage your finances during these challenging times.
Apply for unemployment assistance
Due to the economic fallout from Covid19, the Government of The Bahamas, in collaboration with a number of public and private agencies, are working together to bring social and financial support to persons whose income sources have been disrupted. Below we have outlined the categories of persons who are eligible. Further details are available on the Government website: www.bahamas.gov.bs.
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Individuals who have been laid off from a hotel or tourism-related business
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Self-employed persons in the tourism industry, this includes
- straw vendors, hair braiders, taxi drivers, jet ski operators, and other self-employed tourism workers, who have lost their income as a result of the COVID-19 shut-down;
- tourism workers that have been placed on reduced workweeks by employers.
These persons are eligible for a temporary Government-subsidized unemployment benefit through the National Insurance Board.
In Barbados, unemployment benefits are available through the National Insurance Scheme. Find out more here.
Cut your expenses
Some of your budget items - meals in restaurants, a gym membership - have been eliminated for you. Others require discernment. You’re the best judge of whether take-out meals, alcohol, or other extras are essential or expendable. With many of your smaller expenses on hold, review your biggest purchases. Cancel any big trips you may have planned for later this year. Delay home improvement or purchases of non-essential consumer items. If you have two cars, you may need to sell one. You will not only get some income, but you will reduce expenses because you won’t need to pay for insurance, maintenance, and other related expenses.
If you’re having trouble affording your utilities, rent, or mortgage payment, call your utility company, landlord, or bank, and ask them to work with you. Some banks and landlords are willing to make arrangements for clients and tenants to pay over time. Even if they’re not willing, the Government has made arrangements to help you in such instances.
Look for another job
If you find that you are not financially able to retire early, it may be necessary to find another job, whether it's part-time or full-time. There’s nothing to be ashamed of. Most people aren’t fully ready for retirement at 62. Be proactive, signup on sites such as LinkedIn or Facebook to post your resume. Also, look in the papers and ask friends or family members if they know anyone that is hiring.
Accessing your savings
Even with lower expenses and new sources of income, you may still have a shortfall between your bills and your resources. This can be a good time to take money from any special purpose savings accounts where the special purpose can be deferred until you are once again generating income.
Delay taking NIB if you can
Covid-19 is temporary, but your NIB decisions are permanent, and you’ll live with them for the rest of your life. While it may be tempting to apply for early retirement benefits, we would recommend that you delay as long as you are financially able to do so.
Persons who opt to receive the benefit before age 65 years receive reduced payments assessed as percentages on the amount you would have gotten had you claimed at age 65 years. Reduced rates are based on the number of months a claimant is away from his/her 65th birthday. Once you opt to receive the benefit before age 65 years, the reduced rate/percentage assessed is set for life
If you wait past your full retirement age your monthly check increases. You will receive the maximum payout if you wait until age 70 to claim benefits.
Speak to a Professional
If you find that you are overwhelmed with your finances and need some guidance, please call your RF financial advisor who can help.