News Column

Avoid Retirement Planning Mistakes

September 2, 2014

Strive to retire comfortably:

If you consider yourself financially successful, you may think that with your personal savings and holdings, as well as your company retirement benefits, you will have no problem retiring comfortably. You can't know for sure until you sit down and actually estimate what your retirement income and expenses will be. This is definitely one of the many cases where your ignorance will not lead to bliss.

It will therefore be helpful to understand some of the common mistakes people make in retirement planning so that you can make efforts to avoid such. It is also anticipated that you will also become motivated enough to do some serious planning.

Better to begin retirement planning early:

Being late is never better. People often start planning for retirement later in life. Although it is never too late to begin your retirement planning, the number of options available to you decreases as you get older. The later you begin, the less chance you have for your savings to grow or for you to recover from bad economic conditions or life events. You may get tired of seeing this repeated over and over again, but there is no such thing as planning or saving for retirement too early.

Company retirement benefits are not always enough:

It must be appreciated that the company retirement benefits alone are not always enough to guarantee pleasurable retirement. This explains why every employee has to give favourable consideration to voluntary contribution as provided for in the Pension Reform Act 2014.

Lack of social security in Nigeria:

While Social Security is not a safety net, there is hardly any social security system one can be proud of in Nigeria. Despite what some people may think, the Social Security system has never been and never will be a safety net for those who retire with no assets or income. At most, it provides a cushion to partially soften the blow to your finances when you leave your employer to retire. The way things are developing, that cushion is getting progressively thinner and thinner. Where it existed, at most, you should only consider Social Security as a small part of your overall retirement plan.

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Source: AllAfrica

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