To make retirement a great time of your life and devoid of worries, IFE OGUNFUWA writes on the plans you need to make now
Is it just around the corner or is it some years away? Adequate preparation for retirement can take care of unforeseen circumstances, according to experts.
While many workers are eager to be free from the nine to five daily routine, others are scared because they are uncertain of what the future holds.
Experts say planning early for retirement is critical because the assurance of a salary no longer exists after one leaves the job and it takes many years to gather the necessary funds to live a comfortable life.
According to them, starting a savings or investment plan early in life will allow funds to accumulate and grow, and will provide substantial resources for retirement.
One of the social security measures for Nigerian retirees is the Pension Reforms in which a new Act was signed into law in 2014 to replace the 2004 version. The Act aims to regulate the administration of the Contributory Pension Scheme for both the public and private sectors.
Experts have highlighted ways of achieving a retirement free of stress and fears for the future.
Make a decision on what to do after retirement
A business consultant, Mr. Dapo Aderoju, says a business idea or investment plan should be nurtured and developed once an employee is approaching retirement age.
According to him, the experiences gathered during the several years of dedicated service should be applied when selecting the business idea.
He says it is important to identify a viable business and make strategic plans before venturing out.
According to him, a business is important at this time because additional income to supplement pensions and savings for the long-term may be required.
Experts say no matter the motivation, whether to stay active or to earn extra income, retirees should have a business idea that they have passion for and can develop. For instance, starting a business that you find to be more technology-focused than you can manage may not be ideal for you.
Aderoju suggests that a retiring accountant should contemplate setting up a private practice as a financial adviser, leveraging the network built while in active service.
In addition, he says the lifestyle of a person can be matched with the business idea. The consultant says if a retiree enjoys physical activities a lot, he or she may consider setting up a gym.
Determine how much you need to save
As part of preparations for retirement, experts say determining the amount of funds required for setting up a business is important.
As a result, questions like “When will you start saving?” “How much can you save every year?” “When will you retire?” and, “What will your investments return?” should be asked and responses to them will help in financial planning.
Ideally, Aderoju says the employee should target saving an amount equivalent to their annual income. He says the money should be set aside apart from the contributory pension fund so that the employee will have something to fall back on before the pension fund is released.
Moreover, research shows that if they have saved enough, retirees will be able to preserve their assets even when there is a pressing need to sell them to meet immediate needs.
Professionals say in order to reduce expenses on health challenges and increase longevity, healthy lifestyle practices should become a habit.
Pay off your debt
To enjoy the accumulated savings on retirement, experts say that employees should pay off their debts to avoid accrued interests. According to them, when choosing a home to purchase for retirement, the worker should think about maintenance and accessibility. They say getting rid of unnecessary expenses can be achieved by harnessing homemade solutions to household chores or do-it-yourself options of getting tasks executed.
Doing this, they say, will help people to concentrate more on saving for an emergency fund. In addition, they say it enables you to use your income to make real progress on your retirement funds.
For instance, they say if you can pay off debts owed on a car or house purchase while working will eliminate some of the financial burdens at retirement.
Pass on your investments
To ensure that the retirement plans are in favour of other members of the family, experts say the investments or business plans should be sustainable.
According to them, what was once referred to as socially responsible investing is now commonly considered sustainable and responsible investing.
To achieve this, experts note that investment should be channelled towards fundamental changes on how products or services are produced, distributed and disposed of.
Experts are of the opinion that this kind of change must come mainly through extensive research and investment in new technologies and new processes that can replace unsustainable practices,
According to them, these are the kinds of investment that can be handed over to the next generation.
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