Best Retirement Plans To Consider In Nigeria

Best retirement plans to consider in Nigeria

Written by Brai

Abdulganiyu Ibraheem otherwise known as Brai is a mass communication student from Ahmadu Bello University Zaria. He developed an interest in writing ever since he was in high school and hopes to be an advert content creator working in a manufacturing company. Brai is also a fashion designer whose optimism is high in owning a big fashion designing house, sewing different kinds of cloth for men and women

July 12, 2021

The majority of Nigerian workers both in the public and private sector have rooted phobias for the word ‘retirement’. This can be pictured as a result of the status of past retirees. While some died in the process of trying to get their entitlement, some live in abject poverty.

It is important to remember that retirement can either be desirable, terrible or as the case may be, depending on the preparation plopped before you embark on it.

What is Retirement?

Retirement is the withdrawal from one’s position, occupation or from one’s active working life. Retirement is cessation from active working life and can either be voluntary, compulsory or forced, and mandatory.

It is essential to also note that retirement could also be viewed as a permanent withdraw from service because you have attained a certain age.
Nigeria’s labour statute states that a worker may retire voluntarily or must retire at 65 years except for Academics within professorial grade while the Court of Appeal and Supreme Court Judges at 70 years.

Why Do You Need To Plan Ahead For Retirement?

It is the responsibility of the government all over the world including Nigeria to see that its people are well taken care of, And enjoy the basic need a citizen should enjoy irrespective of whether rich or poor, working, unemployed or retired, etc. such as free health care service, security benefits, free and quality education at both basic and tertiary levels, etc. But it is disheartening to see that in most cases, most of these basic needs are catered for by individuals especially here in Nigeria.

This is why you need to consider planning ahead of retirement so that fending for these needs after retirement will not have negative turns in your life, and as will caught off guard.

You can check out 5 reasons why you should start planning for retirement now.

What is Retirement Planning?

Retirement planning connote financial, physical and psychological preparation reserved against retirement.

1. Financial Planning

Financial planning has to do with earning, saving, investing and ultimately the distribution of money which is meant to be used in other to sustain one’s self during retirement.

In other words, financial planning is made to be financially independent after retirement.

Three main factors are considered when financial planning is mentioned;

Earning

This Is the first stage to sustainable income in finance. Before an aspired retiree can think of plopping plans against retirement, they must at least be receiving money either on a daily, weekly or monthly basis.

Hence, it is through this, adequate plan/s will be put in place for retirement.

Saving

Savings for retirement or upon retirement is never too late or too early. But it advisable that you start saving for retirement the day you start receiving your salaries, or wages.

Savings for retirement or upon retirement is never too late or too early. But it advisable that you start saving for retirement the day you start receiving your salaries, or wages.

 In Nigeria, most retirees depend on relatives or their children to cater for their needs after retirement. This often occurs because such a person had no savings before leaving office. But thanks to the Federal Government of Nigeria, in 2004, they put in place a pension system known as The Pension Reform Act 2004 that would address the issue of pension administration. This gave rise to what is now known as Contributory Pension Scheme (CPS), instead of the then Defined Benefits Scheme (DBS). The scheme provides retirement saving options geared at putting a retiree on monthly income even after retirement from active service.

Furthermore,  in spite of the pension, it will be of great advantage to put aside at least 15% from the monthly earnings. At least 15 per cent. This will surely go a long way along with your pension in sustaining your long-term goals such as children education, acquisition of property, children’s marriage, holidays, unforeseen circumstances (uncertainties) etc.

This is one of the highly advised retirement plans in Nigeria today.

Investment

Merriam Webster Dictionary defines investment as the outlay of money usually for income or profit. Furthermore, it is also regarded as the application of funds in other to hold assets for a longer time in the hope of achieving gains and/or receiving income from those assets. To double the income, investment is a nice option to give a shot.

Although it comes with the risk of loss, that is why it has been advised to start savings at an early stage so that there will be a chance to go into an investment at an early stage in respective of the risk to lose because you can probably make back your money over the years.

Areas on which a prospective retiree can invest include stocks, buying of shares, life insurance policies, real estate, small scale business, oil well, equities and bonds, acquisition of landed properties, education, and so many other business opportunities.

The best area prospective retirees can invest in as part of retirement plans in Nigeria, is the real estate sector which has been confirmed by The National Bureau of Statistics to have contributed up to 9.22% to the GDP in 2020. Other options include cryptocurrency, stocks, buying of shares, life insurance policies, real estate, small scale business, oil well, equities and bonds, acquisition of landed properties, education, and so many other business opportunities of their can also be considered as considerable retirement plans in Nigeria.

2. Physical Preparation

If adequate care and attention are not given to the body while in service, you might end up spending all your life savings at the end of your retirement on the same health you failed to give attention to. Therefore, it’s important to maintain a healthy lifestyle. Eat well and exercise regularly. Take adequate rest and try to get at least 8 hours of sleep as this is very beneficial to good health. Avoid drug abuse and self-medication. Take out time to visit your doctor and have regular medical checks.

Following this advice will help you health-wise, enabling you to enjoy your retirement when you finally retire.

3. Psychological Planning

All workers must consider how to avoid any form of psychological trauma before they withdraw from service as average Nigerian retirees have died as a result. You need to get used to the fact that there is a reduced or no income (having a pension as the only means of income), economic hardship (inflation), work under load which brings in boredom, the monotonous pattern of life, loss of status and authority within the society, social isolation resulting from reduced mobility, lack of information on community and national health issues, among others.

Conclusion

It is necessary to make hay while the sun shines. So while in service, adequate preparation is to be put in place to live up to standard after retirement.

Most employees today seem to forget their employers when they retire from work leaving lots of retirees in shabby condition because they rely only on the stipends from their employers. Therefore, the best time in avoiding such is now and make use of these retirement plans in Nigeria now.

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