Planning for retirement is something that a lot of people put off until the last minute, however it should not be so as planning for retirement early enough puts you in a great position to retire easy and well. Imagine having a job interview so important to you that you start preparing for it from the moment you know about it. This should be the case when it comes to planning for your retirement. Preparing for retirement starts with thinking about your retirement goals and how long you have to meet them.
Retirement refers to the time of life when one chooses to permanently leave the workforce behind. In Nigeria, the official retirement age is 60 years or if you have worked for 35 years. Preparing for retirement is the task of identifying your retirement income goals and outlining steps to achieve them. Waiting till the dying minute to plan your retirement is something you should avoid.
Tips on how to plan your retirement
To plan your retirement effectively, there are certain things you should do and take note of:
Get professional advice: Educating yourself is a crucial part of planning your retirement. It is important to seek guidance on retirement plans and opportunities.
Savings matter: Planning for retirement without having a savings account for the sole purpose of retirement is not the way to go. It’s a basic requirement for retirement. To understand better the importance of saving, click here
Know your retirement needs: This has a lot to do with individual preferences as it differs from person to person. Also your location plays a role in defining your needs. Retirees in Nigeria have different needs from retirees in other countries. Therefore, you need to know and understand your own retirement needs.
Having a plan for your needs: As your needs differ from another person’s needs, so do the plans to take care of them differ. Check out our Retiree Asset Management Account.
Why should you plan for retirement ?
Planning for retirement early has a lot of benefits that make the life of the retiree easier and enjoyable. These benefits include:
Safeguarding of property and assets: Without a plan for retirement, you may be forced or compelled to liquidate assets to support your lifestyle during retirement. By building a retirement fund, you can secure your assets and property.
Peace of mind: There are many changes in life that may need immediate execution within constricted time frames. Having a plan for retirement makes it easier to accommodate the changes that may occur in life. Preparing ahead will reduce the uncertainty for you and will help you to be mentally free in your later years.
Legacy opportunities: Planning for retirement can also provide benefits to your heirs or favorite charitable causes. Planning for retirement will ensure that all your wishes are fulfilled in the correct manner.
Stages of retirement
There are 3 stages of retirement planning and it’s important to know them so you can know what to do at each stage.
Accumulation stage: This is the time of building assets by saving and investing your money; usually from earned income which you have specifically reserved for retirement. Keep in mind that during your retirement, your ability to afford and maintain the lifestyle of your choice will depend on the money you’ve saved and the investments you’ve made in the accumulation phase.
Planning, preparation and preservation stage: This is the time, ideally 7 to 10 years prior to your retirement date, when your investments need to be reviewed. Next you will evaluate your risk return profile as it applies to your new status of pre-retirement. A detailed analysis of how your money is invested using your retirement ready risk profile is done at this time.
Distribution stage: All these preparations are done to create powerful income distribution that will last for your entire lifetime. This distribution stage starts when your earned income stops and you begin receiving monthly income supplements from your investments and insurance products to meet your monthly cost of living requirements.
Basically, living your best life does not necessarily have to end because you are about to retire. Planning your retirement helps to ensure that even in your older years, you can still live and enjoy your life. To read more about retirement and its advantages, click here