Reasons you should save for retirement

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.