Understanding the circle of life
If you’ve worked for a period of time, then there will be a moment you will have to quit and face life in other dimensions. It is very good if you don’t have to hustle at an old age but relax and enjoy your remaining days on earth. This can be made possible by planning before this time; saving a fraction of your earnings for this purpose. It is, therefore, safe to prepare for the future even when you’re young.
In Nigeria, public officers/civil servants have part of their salaries going into a pension scheme automatically, which would be received on retirement. There are also people who invest in the future through their personal savings. Business owners, entrepreneurs, and other workers too have to plan for their retirement because they have to quit or step aside in the long run.
Many may have complained that what they earn is not enough to spend now not to talk of the future. In the case of Miss Mary, a civil servant, she says, “in my opinion, we are forced to save in the name of pension. I do not like that. They pay us little money out of which we have to cater for our immediate needs and also save even though the money is barely enough to eat’’. No money is ever enough for people, even billionaires also work to have more, part of it has to be saved for future use.
How early is too early?
Some people start saving for their retirement from age 40-50; when they feel they have catered for their family to some point and now realize the future draws near. To be on a safer side, having a saving plan for retirement at an earlier age is a smart thing to do as the time is ticking away and no one is getting younger.
More so, for the future not to come as a surprise, it is very good to plan ahead even at a young age. The little amount that goes into personal savings for retirement will really come big after some years. For example, if you save N500 per day, you would have saved N182,000 at the end of the year and if you are consistent for years, it will be a great lump sum.
In a harsh economy like Nigeria where people find it hard to eat three square meals, the larger percentage do not see saving for retirement as an option rather, they eat to survive. For those who are engaged in one job or the other, it is advisable to save for rainy days. This is when you can boast of your service years and live a fulfilled life.
Where I think that no time is ‘too early’ to start saving for retirement, I asked other people for their opinions. I wanted to know if they really liked the idea of saving for the future. Below are the points they made:
Saving for retirement is very good. It is a better thing to do so that one can use the saving to invest in assets that can fetch money till death. I know of companies that take care of that if you are a civil servant.Mr. John, Ado-Ekiti
I know some people plan for retirement but many don’t do that due to inadequate knowledge of the benefits attached to it while some know the benefits but their income can’t cater for their immediate needs not to talk of setting some aside for retirement.
I love the idea of saving for retirement as it secures one future.Mr. Taiwo, Akure
People plan for retirement and some people now, as a matter of fact, invest. I’m also working on investing towards retirement.Miss Spencer, Ibadan
A lot of people save for retirement. There is the automatic saving of pension which they collect after retirement, which is controlled by different pension companies. There is also the personal savings for businesses they want to invest into and plans they want to execute after retirement.
I like the idea of saving for retirement. I have an account already with a pension fund company.Bishop Tunde, Ibadan
One who waits so long in a job till the old age of retirement is sure to be gathering some cash while at the job to make his/her aftermath go well. It is one way people think of securing their future.
Saving for retirement doesn’t seem like an idea to dislike to me.Ayodele Ayanfe, Lagos
As for me, I’ll rather have people save for a short term and invest rather than saving for a long term for the purpose of retirement. Things have changed from what they used to be. Average life expectancy has relatively reduced so the chances that you’re going to live even to the retirement age is slim. So, I’ll advise you do what you want to do now. Invest and think entrepreneurship.Mr. Alao, Abuja
Planning for retirement
So some persons think you should invest instead of saving for a future you are not sure about. If you are not sure about anything, then you should at least ensure that you won’t be begging to feed if you eventually live a long life. These sentiments are based on life expectancy for Nigerians and it is understandable. But you don’t want to be the man who walked to the end of the road only to discover that it branches out.
If you’re not saving, it’s time to get started. You should start to plan for the glorious retirement you envisioned now. Once you start saving, be consistent, and stick to your goals. Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow. You just have to make saving for retirement a priority. Also, devise a plan, stick to it, and set goals.
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Another important thing is to know your retirement needs. If you dream of living quite big after retirement, then you have to plan ahead and save more. You just have to take charge of your financial future.
When you start saving, you don’t have to touch your retirement savings for any unnecessary thing. If you withdraw your retirement savings now, you’ll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties.
You can also pay money into an Individual Retirement Account (IRA) and start saving as much as you can. IRAs can provide an easy way to save. You can set it up in a way that the amount is automatically deducted from your checking or savings account and deposited in the IRA.
Benefits of saving early
There may be dozen of excuses for not saving for retirement nowadays, and it’s a shame, as it will really be a problem in the long run. Saving for short term might be an option but saving for retirement sake is still something we need to do as soon as possible.
Here are some benefits of saving for retirement at an early age:
You’ll be able to afford what you want when you retire: If you can afford to save at a younger age, then you would definitely afford everything you really desire after retirement. If you can save N10M from age 40 to your retirement age, then imagine what you could save if you start saving 10 years earlier. When you start at a young age, you wouldn’t be pressured to reach your mark and you’ll definitely live the life you want for yourself.
You’ll be able to retire at an earlier age: The sooner you start saving for retirement, the sooner you will be able to afford to retire. It also depends on how big you save for the future. When you have a big amount in your account, then you can quit and live your dreams at an earlier age and experience fulfillment.
You’ll have a stable retirement income: If you start saving as early as possible, you won’t have to worry about running out of money when you are old and this decreases the chance of you having to work again.
You won’t have to rely on children/family: If you have spent all your life catering for your children and family, expecting them to pay you back when you are retired, you may end up having it in the other way round. But if you save as early as possible, your retirement income will be enough to live your life without any hindrance or any dependence. Never forget that your children have their own lives to live, and they have to plan for their own retirement too.
Do well to share your thoughts on this topic. Thanks for taking the time to read this piece.