Retirement planning guide Nigeria - Retirement is a word that means different things to different people.
Young employees often feel that retirement planning is for old employees who have spent ten years and above working for the organization.
On the other hand, older employees who should have been planning for retirement all along suddenly get jittery when their companies begin to send them for retirement courses . . . a sign that retirement is beckoning.
Younger employees feel that retirement is still far away and do nothing about it while older employees are frightened that retirement is approaching too fast because they didn't take retirement planning as seriously as they should have.
I want you to stop right now and think.
What is your retirement plan?
Here's the truth.
You need to start planning for retirement right NOW whether you're new on the job or 'old' on the job.
Simple answer . . . you can lose your job any day irrespective of whether you're old or young and no matter how good you are on the job.
What could make you lose your job?
You could lose your paid employment because . . .
. . . or a host of other reasons that we cannot discuss here.
You can retire voluntarily or your company can force you to retire.
Whatever the case, you will have to fall back on plan B . . . your retirement plan. What if you haven't taken retirement planning seriously all along? Then you and your family will be faced with the risk of . . .
. . . and inability to meet basic family and social needs. Let me tell you the tough truth.
Money or the lack of it can seriously embarrass you.
So, let me ask you, "Do you really want to be embarrassed by money? Do you really want to see your wife, kids, and relatives suffer hunger and deprivations?"
If your answer is "NO", then this is the time to start planning for retirement.
In the company where I once worked, I noticed that a lot of people, management and non-management, spoke about plan B.
Some spoke about it seriously while some others joked about it.
From all that people said, it appeared that over 50 percent of management and non-management staff I knew had a plan B, at least they made it appear so.
My ex co-workers would often say, "The company is owning me. Let them pay me my gratuity and I will leave this hell hole for good to start something great".
That gave the impression that a good number of these ex co-workers had a solid profit oriented plan B . . . a well thought out retirement planning strategy that gave them confidence that they could go solo.
However, there's one sad reality that crops in when these ex co-workers eventually retire and leave the job either through voluntary retirement or through forced retirement.
What reality am I talking about?
Well, many of these ex colleagues come into retirement with several millions of Naira paid to them as retirement benefit either as gratuity or as disengagement payoff. And immediately, many set out to launch that dream business.
Within five years of starting out as business people, many of these ex-employees-turned-business-person are back to the employment market as job seekers.
Simple answer . . . their businesses failed.
So, if you have been planning for retirement, I congratulate you. But you need to sit back and ask yourself this soul-searching question: "Will my retirement planning (or my retirement plan) stand the test of time?"
Why do many ex employees fail as business people?
There are several reasons.
1. Many try to retain the high monthly earnings they had when they were in paid employment by getting into high yield investing
2. Many start businesses they are completely unfamiliar with and in the process do not think through all the pros and cons before starting
3. Many start businesses that are capital intensive . . . businesses that gulp a large chunk of their cash (often company payoff cheques) and so when the business fails, there's nothing to fall back on and
4. A good number of retirees try to maintain the same standard of living they had while they were still employed and so end up using a large part of their startup capital for covering family expenses
Want to enjoy your retirement? Want to be completely independent after retirement and never have to become an employee again?
Then avoid the loopholes discussed above.
There are a few things to bear in mind if you're ready to retire and you're working on your retirement plan or you're planning for retirement ahead of time.
First, whatever it is you're planning to retire to, whatever your plan B is, start a small scale version of it while still in employment and then employ people to run it for you.
That will allow you to deal with the initial slow pace of business and poor profitability associated with new businesses without existing customer base.
Second, invest in your area of expertise. Don't go trail blazing with your exit pay package. You could lose everything.
Third, don't invest more than 20-40 percent of your exit pay.
If you invest more than 70 percent of your payoff and business does not work out, you would have learned your lesson in how not to do business but there may be nothing else to fall back on.
Four, search for affordable home based business opportunities and join one of the best ones while still in paid employment.
Home business opportunities have the advantage of generating extra income for the family when you're still in paid employment. And they can cushion the impact of job loss and forced retirement.
Plan seriously for retirement whether you're new or old on the job. And make home business an essential part of your retirement planning.
P.S: Take a moment to learn about our retirement planning seminar. Our program may be exactly what you need to get hands-on experience on how to plan effectively for retirement.