According to The Royal Gazette in July of this year, The National Pension Scheme (Financial Hardship) Amendment Regulations 2011 legislation was passed to allow people access to their private sector pension funds (up to 20% of the balance) under conditions of extreme hardship including severe mortgage or rental arrears, education costs, or medical expenses.”Pension capital-reducing withdrawals are now being made by many Bermuda residents desperate to use every source of funds available to them, just to meet monthly expenses.The depletion of a pension, one’s future financial security, may generate terrible feelings: Frustration, discouragement, and often hopelessness. Because the thing is, what do you do when that cash cushion is gone, too?The decision to cash out a piece of your pension is just the first part of a tough financial decision.Current capital market conditions have been particularly turbulent of late. Forced unplanned pension security liquidations could generate a profit, if the markets are kind and it is your lucky day. However, capital markets can be cruelly arbitrary, too, cutting deeply into the value of pension capital if the fund redemption sale is executed on a down market valuation day.A twenty-percent redemption from a ten-year accumulating gross pension is significant. Replenishing that retirement party pot may take more than two years to resurrect that same cash value.When the money is needed though, these considerations become completely irrelevant. I am so dreadfully sorry that some families are experiencing severe financial distress during this very trying time.In spite of, or because of, these hardships in a today’s Bermuda-rough economic climate, individuals still should pay attention to their pensions.Your pension may become your single largest asset if you have many years to move up the career ladder. A well-managed pension will be a welcome lifestyle enhancer if you are closer to departure through the golden gate. But, the ultimate responsibility for overseeing your pension rests on you.Readers of this column, friends, and acquaintenances are fairly expressive regarding planning for their retirement. Generally, they are very concerned about their financial future, but feel overwhelmed with the whole process.They may not have immediate resources available to seek the services of a Certified Financial Planner™ practitioner and must rely upon their own common sense.How much retirement funding do I need?Their first group of standard questions almost always evolve around figuring out what they will need way down the road, and many simply say that they have no clue as to how to go about it.Isn’t there a simple way to arrive at these answers, is another common complaint? At the risk of sounding self-serving, no, there isn’t; however, you can run some calculations on your own that may give you some fairly reasonable numbers.I will be providing clear instructions and worksheets in future columns to help you do just that.If you have never really looked at the future of your finances, this retirement need exercise will get you started toward better control of them now, not when it is may be too late to make the best decisions for you.To start with, it helps to have a basic understanding of the following;1. How interest on principal values is compounded if you aren’t good in math, work with a friend or spend some time on various retirement websites checking out generic retirement and future value calculators. These calculators are not tailored for our environment, but they will give you some sense on how the process works. More on that later.2. How and why market values change on investments, both stocks and bonds. This explanation will be correlated with the other investment topics in the Moneywise: Bermuda Investment Primer.3. How your personal inflation rate affects your savings and your purchasing power. This is a very important concept and figures hugely in the retirement mix.4. How annuities are structured and what that may mean to your various pension choices financially. For example, the future earnings on a lump sum settlement distribution that you have to manage yourself, may end up to be less than taking a monthly annuitized payment for life;5. Understanding the difference between indexed and non-indexed pensions. Retirees often fail to calculate for a non-indexed pension and the differences may be severely critical in later years.6. What health insurance implications will you face in the future? This is a significant cost now for employers, increasing at a rate of 12 to15 percent annually.Once you retire, you must build this inflation index and cost into your personal annual income need.7. How will you feel about a self-health assessment profile when the results tell you just how long you will live? Try taking the Dr. Oz life expectancy test at this web link: http://healthybodydaily.com/Dr-oz-in-case-you-missed-it/Dr-oz-live-to-be-100-Dr-perls-ageing-calculatorI guarantee it will make you distinctly uncomfortable as it asks questions about road-rage, smoking habits, drinking habits, exercise routines, personality types, and family longevity factors.Perhaps, you may be pleasantly surprised.There is longevity in my family tree; I’ve taken these tests and was appalled to find that I am predicted to live around another 50-55 years! Can you imagine if you will have many friends left at age 95, 100, 105?8. Truly understand the difference between (almost) guaranteed rates of return and market rates of return. This last concept is vital when projecting out appreciation and growth in savings and investments. And it tends to trip up many, many intelligent people.Readers are now thinking that this is already too complicated. Actually, it is not. This series will walk you through the steps.Part 2: Understanding the structure of your Bermuda National Pension Scheme, and, compare yours to the pension plans provided to the civil servants by Government.Martha Myron, CPA CFP(US) TEP JP is an international Certified Financial Planner™ practitioner in private wealth management.She specialises in independent fee-only cross border investment, tax, estate, and strategic retirement planning services for Bermuda residents with United States and multinational connections, and US citizens living and working abroad.She is a Masters in Law candidate in International Tax and Financial Planning and the Bermuda country contact at the American Citizens Abroad Tax Advisory Council. www.americansabroad.org.For more information contact mmyron[AT]patterson-partners.com or 296 3528 at Patterson Partners Ltd.