Rea­sons you should save for re­tire­ment

Daily Trust - - BUSINESS - By Fran­cis Arinze Iloani

Are you con­tem­plat­ing why you should save for re­tire­ment? Here are some an­swers:

You will some­day stop work­ing or be forced to stop work­ing: You will not work for­ever, and you will ul­ti­mately be re­spon­si­ble for pay­ing for your re­tire­ment.

If you want to stop work­ing one day, you are go­ing to have to think about how much in­come you will need to live. So­cial se­cu­rity, which is al­most non-ex­is­tent in Nige­ria, pro­vides a ba­sic “floor” of in­come that you will have to build on for a com­fort­able re­tire­ment. Pen­sions are never enough for re­tirees and in some states, pen­sion­ers re­ceive as lit­tle as N2,500 per month as pen­sion. You need to save to en­joy good life when you re­tire.

Prices of goods are soar­ing: Many peo­ple as­sume that ex­penses will go down in re­tire­ment, but fre­quently that is not the case. Soar­ing in­fla­tion rate in Nige­ria means you will need more, not less. Higher prop­erty cost and rents mean you need to pay higher for ac­com­mo­da­tion un­less you have a house of your own.

Many other ex­penses may arise: in­creased med­i­cal costs and health in­sur­ance pre­mium costs; fi­nan­cial help for grand­chil­dren, or even el­derly par­ents; more free time that could re­sult in more money be­ing spent on trav­el­ing and en­ter­tain­ment.

You may re­tire ear­lier than you plan: Cur­rent down­turns in Nige­ria’s econ­omy that have re­sulted in com­pa­nies re­trench­ing many em­ploy­ees are an in­di­ca­tor that you may not reach the re­quired 35 years in ser­vice or the of­fi­cial re­tire­ment age of 60.

In ad­di­tion, work­ers re­tire ear­lier than planned due to the un­ex­pected, such as health prob­lems or changes in their com­pany such as down­siz­ing. The ear­lier you start pre­par­ing for un­ex­pected events, the bet­ter.

You may live longer than you think: Never think you may not live upto 100 years. Since you are not God and you do not de­ter­mine how long you will live, you have every rea­son to save for your old age.

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