How to plan for retirement in Nigeria – See the 15 tips to plan for Retirement in Nigeria. If you follow these retirement planning tips, you will surely enjoy your retirement period.
Rest, they say, is the reward of labour. It doesn’t matter how long you work for, someday you would have to take a break and retire.
A lot of people think you only start planning for retirement when the time comes. Think of what happens when you are about to write a professional exam let’s say law school finals and you do not read until the exam day, it will only take a miracle to make it to the bar.
The same thing applies to retirement, you have to start planning for it the day you receive your appointment letter with an organization. This way you are able to put things in order carefully leaving no stones unrolled.
Retirement is a stage in one’s life where they leave the workforce and spends their time on personal ventures or leisure. Generally, in Nigeria, the retirement age is 60, although some get to retire earlier or later than this depending on their age and where they work.
Some who have their own businesses get to retire anytime they want so we can say retirement is a state of being able to resign from the workforce when financial freedom has been attained. We’ve seen young executives who retired in their 40s, personally I know of a top level exec that left the public workforce before she clocked 50.
Retiring early gives you the luxury of fully enjoying your retirement years and also achieve life goals that might have been put on hold as a result of your work schedule. So retirement means different things to different people, whatsoever it means to you, you need be prepared for life after retirement in Nigeria.
15 tips that work in planning for retirement in Nigeria
Now that you know the joys of retiring early and planning for retirement, we have some tips on how to prepare for retirement in Nigeria.
1. Write out your needs for retirement. As a retiree, you would need some basic amenities to get by like food, accommodation and healthcare. Identifying these basic needs helps to know the amount of resources you would need to sustain yourself after retirement.
2. Now that you have a list of the resources you need during your retirement years, it is necessary to budget the amount of money that goes towards meeting each need. Estimate how much they will cost and also consider inflation and miscellaneous expenses when preparing your budget.
3. After preparing your retirement budget, it is necessary to make on how to meet these retirement needs. Have a clear and straightforward plan not just assumptions and ideas.
4. Open a pension account for your retirement plan. Although, most government parastatals in Nigeria pay gratuities and pension when their staff members retire, it is not always the case with private institutions. You have to open a pension account and deposit a certain percentage of your salary into it. Find out from your employer if they offer a pension contract that will be deducted from your salary. If they do not have, then consider opening a Retirement Savings Account with trusted Pension Funds Managers.
5. Save and invest. Start putting some money aside for your retirement early enough so you would have accumulated a substantial amount for your future needs. According to some financial advisors, you should save 15% of your annual gross salary towards retirement. As you are saving, invest in safe and profitable ventures in order to increase the savings. Safe and low risk investment ventures are treasury bills, money market funds, real estate, stocks and shares.
6. Downsize your debt as you are getting close to your retirement. Paying off all your debts before retiring helps to put your mind at rest and also stabilize income cash flow. You are also able to save more when you do not have debts hanging on your neck.
7. Avoid spending from your pension account before you retire. As the money accumulates in your retirement savings account, you might get tempted to withdraw it and spend it on a project or a luxury car. Doing this puts you at the danger of having little or no means to meet your needs after retiring.
8. Start a profitable business venture before you retire. Some might say they will go into business when they retire. The plan is good but its better when you embark on it while you are still in service. If the business goes downhill as most startups are bound to , you can get back on your feet with your salary if you are still in active service. Therefore, it is better you start before you retire, so you can master the trade and enjoy the fruits of your labour when you retire.
9. Avoid get-rich quick schemes. As a potential retiree looking for how to save for retirement, you might be lured into ponzi schemes and high risk investments. Slow and steady wins the race, they say. Grow your egg nest slowly without the fear of losing your hard-earned money.
10. Avoid being a money lender. People tend to take advantage of retirees and old people by meeting them for help since they know retirees are vulnerable. Be kind to people but not at your own detriment. Only lend out money you can afford to lose.
11. Live within your budget. Do not get bitten by the bug of ‘I big pass you’. This has put many retirees into trouble as they spend their retirement funds on frivolous lifestyle just to please other people.
See Also: 6 Tips to Save for Retirement in Nigeria
12. Maintain a healthy lifestyle while in active service. Eat healthy and nutritious foods, exercise regularly, go for medical checkups and most importantly invest in a health insurance. Getting a health insurance helps to reduce the cost of healthcare.
13. Plan on where to live after retirement. You can decide to move to the countryside where the cost of living is lower. At the same time, try to stay within reach of your family members. It is always advisable to own a personal house after retirement for comfort.
14. Maintain cordial relationships with family, friends and colleagues during active service. Having your loved ones around you helps you cope with challenges of retirement. You get to reminisce about the good old days and also get support from them when needed.
15. Lastly, work towards retiring early so your retirement days can be useful and productive. You can follow your dreams and achieve your personal goals better when you are hale and hearty after retirement.
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