Preparing for Retirement

By Nonye Anyakoha

Retirement is defined as the time when an individual stops working. It usually occurs as a result of attaining a certain level of age and/or attaining a given amount of years at the job. Also, people could retire voluntarily as a result of the pursuit of certain dreams or they feel they have the need to rest. Retirement age and maximum length of service for occupations are usually set by the government of the country, thereby creating different retirement ages for different occupations. People who are retired are referred to as retirees.

The usual retirement age in Nigeria is from 65 years to 70 years. The usual maximum length of service that is between 30 years and 35 years. Palliative measures are usually put in place for retirees. The most popular of them all are pensions that are paid out retirees. These pensions are usually a fraction of their last salary while in full-time service. The will be paid this amount from the day they retire until they die. This type of pension is usually referred to as Defined benefit (DB) pension. However, this was much more popular in the past and it is not the same today. Organizations have required that individuals make contributions, which are deducted from their salary towards their pension accounts. This is usually referred to as Defined Contribution (DC). Retirement entails a change in lifestyle for the retiree. The challenge of adopting to life without the daily employment that he/she is used to. Also, the loss of the periodic cash-flow from earnings (salary) could also impact on the retiree, forcing him to make some adjustments in his lifestyle. There could also be the challenge of deterioration in the health of the retiree, him being saddled with more responsibilities such as payment for children’s education, increased expenditure on health care, etc.

Also, adjusting to a life of lower earnings can become a challenge to the retiree as the lifestyle that he has been used for over the previous three decades or more (30 years or more) might not be attainable by him. The aforementioned are the reasons that it has always been advisable to start retirement preparation early enough and to prepare well for it. It is necessary that one effectively forecasts how much he will need during retirement and plan how he is going to be able to achieve this required amount of savings or earnings. There are some myths about retirement that need to be broken in order for retirees to live a comfortable and fulfilling life. Firstly, retirement should not signify the end for the person or the permanent loss of value. The individual, as long as he is healthy still has a lot to offer the world in terms of his intellectual capabilities and experience. There will always be a need to positively mentor the younger generation and these could not only yield financial reward to the individual but also give him a great sense of fulfillment and importance. Also, before retirement, it could be important that the individual discovers an innate skill or ability he has that a business, no matter how small can be built around. This is usually referred to as secondary occupation with which could not only be enough to sustain the individual after retirement but also turn out to become a big venture.

The story of Harlan Sanders, the founder of Kentucky Fried Chicken (KFC) who started the venture after retiring from the US army is an example of such. Thirdly, there is always a need for experienced hands, especially during the establishment of new ventures, in order to guide these new ventures through the rough beginning times. This is evident in the recent establishment of new private universities in Nigeria. Retired and experienced University Professors are usually brought on stream in order to offer mentorship and guidance to the new generation and also enable the school to take –off and achieve highest possible standards that are attainable in the older institutions.  It is also necessary to financially plan retirement. The recent stock market crash in Nigeria has shown that anchoring retirement funds on the stock market can be a very risky venture. It is therefore advisable for the individual to have some financial knowledge before allocating his retirement savings to any investment venture. Acquiring financial and investment education near retirement can prove to be an exciting venture. The individual gets to learn new skills, gain new knowledge and make life exciting even at old age.

Retirement is a wonderful thing. It is a great privilege to be alive and healthy to achieve the age of retirement. Retirees are people who ought to be regarded with respect in order for what they have contributed to society in their working years. It is also an exciting period in the life of the individual, like another phase where the individual pursues other interests that could be exciting and add needed newness to life. It could be the stage an individual gets to know a hidden talent that he had never tapped into, or a stage he mentors the younger generation. It’s a stage in life that is worth looking forward to.