BY NKECHI NAECHE-ESEZOBOR—Whenever retirement is mentioned, some Nigerians see it as a death sentence. But it need not be, because retirement can be good if you plan it right.
Under the 2014 Pension Reform Act, 8% of a formal-sector worker’s monthly salary is deducted and the employer adds 10%, so 18% goes into each worker’s retirement account.
Personal Pension Plan
Workers can also save extra under the Personal Pension Plan (PPP), introduced by the National Pension Commission (PenCom), the apex regulator of the pension sector. They can save in any amount they choose, even if they are already under the CPS.
Self-employed and informal-sector workers
Self-employed and informal-sector workers, who are not covered by the CPS, can also use the PPP, whether they save ₦1,000, ₦10,000, ₦20,000 or any other amount. After three months of savings, contributors can access 50% of what they have saved, while the Pension Fund Administrator (PFA) invests the rest for retirement.
Future retirees must know that pension contributions alone will not be enough for retirement. Expanding your streams of income during your active years can help improve your retirement.
Saving
Saving is one thing all workers must learn to do before retirement. When you are able to save, you be able to invest in bank instruments such as treasury bills, money market funds and stock market. These will go a long way toward improving your retirement status.
Your health
There is a saying that health is wealth. A good retirement plan amounts to nothing if you are sick. Every worker who wants to retire well must go for regular hospital check-ups and eat well. For this to be possible, a Health Maintenance Organisation (HMO) plan must be in place.
Remember,retirement is better when you start early,live healthy, save and invest wisely.
