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It would only amount to stating the obvious by pointing out here that the pension reforms in Nigeria, which culminated in the enactment of Pension Reform Act 2004 became necessary because it was obvious that all was not well with the nation’s pension system.
In spite of this reform in the industry, individuals should still put in place other arrangements that will ensure that they have access to funds that will enable them and their dependants to maintain an adequate standard of living after retirement. Among other things, individuals could decide to save money or invest such money so as to have something to fall back on at retirement.
Saving can be defined as a way of seeking to preserve the assets that one has built up over time. When saving money, the primary emphasis is usually on the stability of the principal rather than return potential.
Investing, on the other hand, is the key to meeting one’s long-term financial goals. The key ideas behind investing are production and growth. By investing, an investor is putting his money to work to produce goods and services that will in turn make profit.
In appreciation of the fact that the need to be financially independent at retirement cannot be over-emphasised, issues concerning investment should not be taking with levity. Investing to generate more money is a very veritable way of planning in advance for one’s retirement. Investment is about securing one’s present and future.
To avoid a bleak future, investment should therefore be given favourable consideration by all employees irrespective of the organisation an individual may be working for.
As it is advisable that individuals should still put in place other arrangements that will ensure that they have access to funds that will enable them and their dependants to maintain an adequate standard of living after retirement. Among other things, individuals could decide to save money or invest such money so as to have something to fall back on at retirement. Investing, it must be understood is not also an easy task.
With regards to investing, it should be appreciated that diversification is now the newest trend and most advised strategy. Diversification, it must be stressed, is so important for strategic reasons. There is even a common wise saying that "it is never the best decision to keep all your eggs in one basket."
Having worked all these years and made sacrifices in the areas of savings and investment, it is important to also focus on managing your income in retirement, by ensuring conservative withdrawal options that will protect you, and sticking to sound principles of financial planning.
Another issue that should be of concern to retirees is how to protect their retirement benefits from fraud. Fraudsters typically prey on retired people, and so investment plans should be thoroughly evaluated.
Retirees are best advised not to base investment decisions on emotional reasons. People get more emotional and less objective with age, and the fraudsters take advantage of this.
Above all, it must be appreciated that retirement planning, especially when it is started early enough, is very important to ensure that the employee is adequately prepared for his retirement. Without a good retirement planning, there may be no income to manage at old age.
Knowledge about the new pension scheme and how it works is important to equip you towards your retirement. Imbibing practical financial planning skills and tips on planning your retirement will provide a more comfortable retirement.
Choosing a Pension Fund Administrator (PFA) wisely, and working with your PFA will also improve your chances of a blissful retirement.
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Adeshola
Adeshola Komolafe
Founder/Researcher
SAVE OUR FUTURE
Abuja
Nigeria
www.desholakomolafe.com
Email: adesholakomolafe@yahoo.com
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