As many Nigerians struggle to navigate their way to financial freedom, analysts have advised many individuals to move forward.
Mr. Tope Adaramola, the CEO of the Registered Insurance Brokers Council of Nigeria emphasized that retirement is an important aspect of life and is not just for the salaried.
He said: “We have to take into account that everyone needs to retire, and it should be denied that retirement is for those of us who call ourselves salaried. Everyone should make room for retirement at some point when they stop their daily work routine. It seems that when they stop, they will only live on what they planned for when they were in active work. , as salaried or non-salaried, as an employer.”
According to Adaramola, retirement planning is in two stages, namely financial retirement planning and non-financial retirement planning.
He said: “One, from an insurance point of view, there are various insurance policies that we often refer to as endowments, which could be bought by insurance companies from insurance companies through registered brokers.
“Because registered brokers understand the technicalities of insurance. They can also do the necessary brokerage to get the most value for the insurance you are taking. Keeping in mind that insurance is usually technical but quite beneficial. So there are different types of endowments. There are educational grants that could be taken.’
He confirmed this by stating that individuals can also enter income.
Adaramola said: “An Ernity is also formally established as a terminal for contributory pensioners.
“So at your disengagement point, you can buy an annuity. And annuities are sold by insurance companies. The beauty of annuities is that most annuities you buy pay out lifetime annuities. You’ll continue to draw based on your age and what you agreed with the annuity vendor. There could be immediate or deferred annuities in your according to the wishes and the established goals.
Speaking about how individuals can buy annuities, Daramola explained that they can be bought in one big payment.
He said: “For example, you have N10m, N20m and you buy an annuity, which accumulates over time. In this case, you will draw what you have been allocated, including any dividends that may arise from the investment that has been used to make your money.
“There are also cancellations of programs, and that is within the framework of PFAs. They can also help you to start drawing pension benefits.’
He added that individuals can plan their retirement through the real estate market.
According to him, “Even when you enter the property, it looks like a good and dynamic return on investment. However, you have to be very careful to get it done right. Any property you want to buy don’t be pennywise silly pounds. Don’t buy land or real estate that you haven’t done your due diligence on. It’s better to get the commitment of the professionals who would pass you through and make sure that you don’t end up wasting your money.’
Mr. Johnson Chukwu, the Managing Director of Cowry Asset Management Limited told PUNCH that it is a principle that people put aside some money during their active working years.
He said: “You need to set aside money from your income for investments. Ideally, you should have passive income before retirement age. Passive income is money from fixed interest or investment or rental income, including dividends from business investments.”
Chukwu advised that officials with provisions to enable investment in agriculture could also look into different categories of agriculture.
According to him, retirement planning needs to be diversified so that there are multiple income streams and less dependence on the pension due to the inflationary environment.
“Also, with the Contributory Pension Scheme, there are provisions to withdraw sums of money that allow you to do some form of business after retirement,” he said.
In an emailed response to The PUNCH, Money Africa analysts in a report advised individuals to plan for retirement to achieve financial freedom.
The report read in part: “Certain financial habits can help you reach your financial goals faster or leave you broke and financially drained.
Many people had good goals and ambitions last year, and some started well in saving and investing in different options.
“However, it wasn’t long before he was caught up in bad investment advice, debt, impulse buys, black taxes and urgent medical needs, to name a few.”
According to Money Africa, early retirement planning is one of the ways to build a strong financial bank for rainy days.
He said: “The next step towards financial freedom is to start investing for retirement. Some workers would argue that they have a pension plan in place. But to be honest, that amount may not last you more than 10 years. This is because your pension is invested in low-yielding assets, usually in Nigeria. lower than long-term inflation of 12 percent.”
He emphasized the need to invest in financial companies, and warned of job instability to encourage intentionality in planning one’s financial future.
It said: “It’s a different case if you’re self-employed and don’t have a pension plan. You should create an investment plan and prefer investing because of job instability. The same goes for business owners.
“This year, don’t get involved with people who say the interest isn’t worth it. Do you know if you start saving N100,000 monthly for the next 20 years with an average return of 10%, after 20 years, you will have about N76m if you are consistent? The total amount of your investment will be N24 million, and the interest earned will be about N52 million. Now imagine making N150,000, N200,000, N250,000 and much more.
“What’s more, he explained that no amount is too small when it comes to investing. “Start this year if you haven’t started. And if you’ve started, be consistent, and don’t let the market encourage you to invest.”
Furthermore, a report by the Pensions Authority confirmed the development, adding that retirement planning was important.
It said: “People are living longer and leading more active lives in retirement. As a result, it’s more important than ever to think about where your income will come from when you retire.”
Another report from Clare.com says that people in their 20s and 30s think retirement is a distant possibility, but as retirement approaches, they start to worry about financial planning.
To enjoy the impact of compound interest on your savings, the company advises: “Even if you can’t guarantee a fixed rate of return, compound interest is a huge benefit of investing in retirement. In other words, the earlier you start saving for retirement, the more money you’ll have
exponential rate—and the less capital you’ll need to put into your savings. Investing early brings you closer to retirement on your own terms each year and puts you ahead of most of your peers.’