How to Best Plan For Retirement

How to Best Plan For Retirement

October 23, 2020

How would you like to spend your retirement years? Will the money you have be able to provide the kind of lifestyle that you have known yourself to live?

Retirement is the withdrawal from one’s position or occupation or from one’s active working life. Usually, in Nigeria, the retirement age is 60 years old.

Unfortunately, a lot of people end up not being able to provide for themselves after retirement or are totally dependent on their children, family members, etc. Retirement should be viewed as an exciting time to explore new interests. Not the end of work life, but the start of a new beginning. Maybe the start of a new career, starting a new business, spending more time with your family, or engaging in volunteering ventures that changes and impact lives.

Thanks to the awareness that has been created around pensions in recent years by PFAs, we are now enlightened on the importance of pensions and retirement planning. Pensions are undoubtedly a very important part of retirement but pensions will rarely cover all your retirement demands especially if you wish to maintain a certain lifestyle during your retirement years. Your retirement earnings should come from other personal savings and investments as well.

How then can I best plan for this retirement, you ask.

The thing is everyone has different retirement goals and the goals are unique and dependent on their own age, position, and financial situation.

Your present earning is a good starting point for calculating your retirement needs and how much you think you should save. Experts estimate that most people will need between 65% and 80% of their current earnings to maintain their current lifestyle when they retire. Several retirement calculators are available at of Pension Fund Administrators. These are useful tools to help you to estimate how much you will need in retirement.

In your youth (i.e. 20s and 30s), retirement might seem like a long time away, but it’s never too early to start planning for it right from the first time you start working and earning. Those who start saving for retirement earlier than others have a better chance of achieving sustainable financial success. When you are young with retirement still many years away, and with fewer responsibilities, you can afford to take on more risk and can ride out the volatility of the stock market to achieve higher returns over the long term.

While we all pray that we will enjoy good health as we grow older, the reality of decline in health as we age should not be overlooked and in fact should be seriously considered in retirement planning. Sometimes, all it takes just one major illness to wipe out several years of saving and investing. No matter how healthy you currently are, prepare a financial backup that allows for unexpected expenses and don’t forget to plan for your health also.

Finally, remember that the responsibility for building your savings and ensuring that it supports you for the rest of your life rests entirely on your shoulders. Don’t underestimate the importance of making saving for retirement a priority and start saving now. Don’t wait till you are 35 or 40 or until you start earning a six-figure salary.

Now that you finally understand all about retirement planning and you’re ready to get started on it. We can help you to get started.

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