Check List For Retirement Planning In Nigeria
Retirement planning is very important in your life as a salaried worker and also as a self-employed person. The journey starts from the very day you resumed at your job.
Retirement planning in Nigeria is a process that will make you ask questions and take serious decisions. Some of these include when would you retire, would you have enough money at retirement and how much will you need? Another question to answer will be what will you be doing at retirement?
Retirement will be a time that the alarm clock does not wake you up, and no rushing to take a bath to catch the bus in order not to go late to the office.
Of worthy to notice is that when you reach the age of retirement of 60 or 65 years, your health will not allow you to enjoy all that you dreamt of doing at retirement.
In Nigeria today, the word retirement connotes an ugly phase in the life of workers. The images that are shown on TV and what we hear on radio stations, and also read on dailies about the happenings to retirees are quite frightening.
These are people who gave their best years to the society and they served their communities with all of their strength. When they needed the society the most in their old age and lowest moments, the society failed them.
The truth is that retirement is a wonderful time especially when you planned it well during your working days.
So why wait till it is late or you are old before you start planning to enjoy life in your old age?
It does not have to be so, on your journey in this life.
You can have the best of times after your working days are over and you can decide to retire while still strong and wealthy even before the official age of retirement.
The number one factor in retirement that is causing heartaches, pains, disappointments, ill health and even sudden death sometimes is lack of preparations and proper education planning for retirement.
Here Are 17 Guides To Help You In Your Retirement Planning.
- Are You Saving Towards Retirement? What are your saving plans for planning to retire when you leave your job? Have you started and if not when? The earlier you start, the better your money works for you as compound interest is on your side to increase your savings.
- Do You Have A Pension Plan? The Federal Government of Nigeria made it mandatory for every employer with a minimum of 3 staff to start a pension scheme for the workers. So if you are an employee and there are up to 3 of you at your workplace, then demand one. It is a policy of the Federal Government.
- Do You Know What The Pension Act 2004 Entails For You? This is a contributory pension plan where it is stated that it is what you contribute during your working years that you are entitled to during retirement. No more gratuity when you retire especially for government employees.
The old plan which the governments pays you 100% pension is no longer in existence. The scheme also says that as an employee, you contribute 7.5% or more if you can while your employer contributes 7.5% making it 15% of your basic salary. This is remitted towards your monthly retirement pension contribution plan.
- Have An Individual Retirement Savings Account As A Business Owner. If you are a private person the responsibility for your pension plan rest on you. You have to start a retirement saving account where you set aside money towards your old age.
There are government Pension Fund Administrators approved by the National Pension Commission who can help in guiding you to select the best administrator for your money.
- Have An Emergency Account To Serve As A Back-Up. This is to guide against the temptation to put
- your hand into your retirement savings especially if you work for yourself since you can easily have access to your fund compared with the government or State worker.
- Start An Online Business While still working in order to augment your salary if you are an employee. Blogging, freelancing, graphic design, web design, affiliate marketing, App creation, own a shop on the internet to sell your own stuff or you can sell for Jumia, Konga etc.
All these and in addition providing administrative services to people are some amazing online businesses you can start and run in your spare time and weekend to earn additional income towards a comfortable retirement.
- Do Other Offline Businesses If You Can. You can partner with your spouse or any of your sibling. The essence is to have multiple streams of income as the salary you are earning now cannot and will not sustain you at retirement. You can start some of these businesses with less than fifty thousand naira #50,000. Example include farming, buying, and selling, laundry businesses etc.
- Know That There Is No Social Security System for now in the country. If you don’t save and invest towards retirement then, nothing for you in your old.
This life is filled up with uncertainty.
Do I need to tell you that you can suddenly stop working due to an ill health or accident? To crown this, your spouse might not be a worker and no compensation plan, or insurance plan on the ground. Have you thought of what will become of you, your family and dependence?
Look around and you will find tales of woes from so many unskilled persons and those who did not prepare well to retire. If you do not want to find yourself working into your 70 s’ or not having retirement at all like some of them, then plan to retire rich.
- Put In Mind That At Retirement, Your Spouse Depends On You especially if he or she did not work. Know that there will no more be a regular income for you and more so the pension money will be less than half of your former salary.
- Health Care Challenge Is A Major Issue At Retirement. Know and understand that old age comes with sicknesses and an older person is prone to diseases so be prepared for that and have a plan for such occasions. If you can afford insurance policy of the government it is good and if you can afford to continue with your office own, the better.
Live a healthy life so that there won’t be consequences in old age.
- Do You Track Your Spending? Budget your expenses to know what you spent in a month. When you have this disciple, you will be able to save and invest towards your retirement because, at retirement, your pension money will be smaller than when you were working. Get serious with your retirement planning and be on top of the game.
- Test The Waters Of Retirement by living on your 40-50% of your salary for 3-6 months before retirement to prepare you for when you retire. I bet you in this country, that money will not sustain not to talk about catering for your needs.
Now imagine if you don’t have other sources of income, what will your life be like in 20 years time? You may end up in lack.
- Know That Your Pension Money Will Not Start Coming Immediately more so if you were a government worker. Some start receiving their alerts a year after retirement and others even two years down the road, the waiting game still continues.
Many retirees died while in the queue doing verification without enjoying even one month of their retirement benefits. This is sad because every employee looks forward to enjoying the benefits of his or her hard labor.
- Who You Marry Or Who You Don’t Marry Will Affect Your Retirement. Marriage is a very important decision to be made in life and so think and plan on retiring with your spouse before taking that decision.
Have a relationship that will not turn you into a poor person in your old age nor give you pains and take away your happiness when you are old.
- Do Not Say You Will Wait Till You Retire Before You Enjoy Life. This life is a mystery and death can come at any time and so do everything in moderation. Go on vacation, enjoy your family and children but save towards your retirement so that you can have a well-deserved and rich retirement.
- When You Don’t Plan Well For Your Retirement, you will end up struggling financially for survival in your old age except a miracle happens. This is very true and real. Pause and take a look around and you will see old men and women begging for money and food by the roadside. As a self-employed person, save money for your pension.
Some of these people don’t have where to sleep and at one time or the other, they had worked with the government or big companies and had a pension plan. If those who had a retirement saving plan would end up this way what becomes of you who is planning not to have one?
- Don’t Be Naive About Your Pension. The reality is that retirement planning especially the financial aspect is very important to you as an employee and you cannot afford to joke with this. Ask questions at your workplace and read books and blog post on retirement.
Finally, take action by starting a retirement scheme through opening an account and putting money aside which should be invested towards your old age journey in order to have a peaceful and a comfortable retirement.
With these 17 checklists for retirement planning in Nigeria, you should be able to retire rich.