Pre retirement


Demographic trends reveal that ageing population is on the increase globally. People now retire and live longer thereby increasing Pension Funds obligations, funded from Governments’ (Federal, State and Local Governments) already lean purses. The consequence of this is inability of various Governments to immediately meet up with these increasing obligations.  The resultant effect is that retirees are left in the cold for the first two years (or even more) to face life in without any source of income.

It is very discomforting and worthy of note that a great number of people retire from work (Service) without planning ahead for it. This is in spite of being aware of the exact date they will be due for statutory retirement right from the date they got the job.

Different folks, different strokes!

A number of people talk and worry a lot about what will happen to them when they retire from service but end up not taking any step to address their fears before entering into this timeline. Some other people just take every day as it comes without even giving it any thought whatsoever.

What is your excuse!

People fail to plan ahead for retirement because of different reasons;

  1. The nature of work is very laborious leaving them with no quality time to think of any other thing. They work so hard and earn so little and thus must put in long hours daily to make ends meet. They just resign to faith;
  2. The nature of work is very busy and rewarding, hence they are very comfortable as it is and thus would forget to spare a little time to plan for the years coming ahead;
  3. Procrastination! They have every opportunity to prepare for the raining day but rather kept postponing until it becomes too late;
  4. The belief that tomorrow will always sort itself out;
  5. I have trained my children, they will take care of me;
  6. My family inheritance is there for me;
  7. Etc, etc, etc……………

What is your excuse? 


Arc (Mrs) BamideleFalako
Post Service Lifestyle Consultant
MSME Business Coach/Trainer

Intellectual fulfillment has to do with putting your brain to work effectively in such a way that you
achieve self satisfaction. Have you seen how many retirees burst forth in book writing as though it had
always been in them but was being limited by active service and job. These same retirees that those of
us outside the box might originally have felt have brains that should no longer be &;alive&39; as it were.
As long as you are not retired in the body, then your brain should not go into hibernation because
awakening it when needed might not be that easy. You can obtain this intellectual fulfillment by trying
any or all of these:-
Do you know that being happy and joyful increases cortisol level which kills stress. Put your brain to
intellectual work that would make you happy. If you always like calculation, then challenge yourself to
some sums that could also involve deductions. Make budgets to keep yourself financially safe. Were you
an accountant working somewhere before ? Even after retirement from active service you
remain an accountant so do not take your brain to the &39;mortuary&39;. Get intellectually involved with what
makes you happy. From intellectual involvement you would transcend to intellectual fulfillment.

It is often said that we stop to learn when we die. Always try to make efforts to keep reading. Widen the
horizon of the knowledge you had acquired. Stay abreast on current issues. Remain relevant as a retiree
by reading intellectual books. In knowledge, you are intellectually fulfilled. I am sure with this act and art
of reading, &39;Mr. Brain&39; would smile and say thank you for it.
The state and strength of our brain is partly attributed to what you eat. Eating right brings intellectual
fulfillment by helping to reduce the risk of dementia, amnesia and other brain malfunctions. Eat foods
rich in Omega 3 fatty acids like walnuts, flaxseeds and salmon fish. Also reduce refined sugar intake,
natural sugars found in fruits are more beneficial. Eat right, eat well and your brain will be well fed
towards being intellectualy fulfilled.
I am running off again. See you sometime or anytime later on the &39;word page&39;.
Stay intellectually fulfilled.

A few years ago, an Aunt of mine retired after 25 years in her banking organization. She had gotten a generous gratuity, which she used to start a shopping centre. Although she couldn’t get access to her pension scheme yet because she was below 50 years of age, she already had a well-thought out retirement strategy and was also able to maintain a lifestyle similar to the one she had before retirement. When I asked about her strategy; she educated me on having a Retirement Savings Account (RSA), ensure that your employer makes a contribution of 7.5% of your total income to your RSA, and have an investment plan.

For a young career minded individual between the ages of 22-35, thoughts about retirement are a back burner. There are a lot more pressing issues like; promotions, contracts, loans, marriage, children, building projects and car payments, etc. It should be in your best interest to consider long term concerns such as your own retirement plans. Regardless of whether you’re 10, 15, or possibly 30 years away from retirement, being on the right side of things is the best place to be.

Some common concerns, retirees are usually worried about are:

  • Longevity: Most retirees usually outlive their retirement payment checks/savings. This occurs when the pension scheme has an age clause of 10-20 years payment schedule.
  • Health: Some retirees face health challenges that usually come with old age. Access to medical care and health insurance providers will come in handy as they grow older.
  • Income: Retirees especially those with previous experience in the corporate world, require a monthly income equivalent to salaries that could help out in monthly expenses.

The Federal Government of Nigeria in 2004 put in place a pension system known as The Pension Reform Act 2004 that would address the issue of pension administration.

This gave rise to what is now known as Contributory Pension Scheme (CPS), instead of the then Defined Benefits Scheme (DBS). The scheme provides for retirement saving options geared at putting a retiree on monthly income even after he or she must have retired from active service.

There is a common assumption that savings, in addition to pension scheme and a less expensive lifestyle  will all add up to financial security at old age. For some, this may turn out to be true, but such success stories occur as a result of good luck and rare on most occasions. Don’t get me wrong, I’m not recommending that you don’t save at all, as a matter of fact; putting away a percentage of your income every month from now until you retire, can do away with financial anxieties many retirees face. But there are also other forms of investing money and making it work for you.

Having a retirement strategy is a sure guaranty of stability and economic independence in your later years.

You can adopt these effective investment plans for your retirement, below:

1. Programmed Withdrawal: The Programmed Withdrawal (PW) is a retirement product offered by the Pension Fund Administrators (PFA) for periodic payments (monthly/ quarterly) to a retiree. The Retirement Savings Account balance is spread over the expected life span of the retiree but an initial lump sum can be collected while the remaining funds in the account are managed by the Pension Fund Administrator. Under this model, the monthly pension is at least 50% of the last monthly income. Programmed monthly or quarterly withdrawals are calculated on the basis of an expected life span, in other words, Programmed Withdrawal provides a retiree with guaranteed income for a period between 10-15 years and after this tenor, he ceases to earn further income from his PFA. Within this period if death occurs; the balance in the PW is transferred to a named beneficiary under a will or letter of administration. A retiree on Programmed Withdrawal with a PFA can move to another PFA and can also change to annuity with an insurance company. The Return on Investment (ROI) on any money market instrument purchased by the PFA’s belongs to the retiree in his RSA.

2. Annuity: This is a contract agreement between an annuitant (Policyholder) and an insurance company (licensed by NAICOM), whereby the Annuitant deposits a lump sum to the insurance company which ensures a fixed sum is paid to him by the insurance company at an agreed time interval e.g. Monthly, Quarterly, Half Yearly or Yearly for a tenor of 10 years, although payments could continue for the rest of the annuitant’s life. However, this payment ceases upon the unfortunate death of the annuitant, therefore it is not eligible for inheritance, but in the event that the annuitant dies before the guaranteed tenor elapses the beneficiaries will only be paid for the remaining period of the agreed years or in a lump sum. Annuities are appropriate financial products for individuals seeking stable, guaranteed retirement income. Annuitants never outlive their income stream, which edges its longevity risk over Programmed Withdrawal. The annuitant can only move to another insurance company after two years but cannot switch to Programmed Withdrawal with a Pension Fund Administrator.

3. Money Market Instruments: These instruments include but not limited mutual funds, bonds, equities, shares, stocks, etc, that are traded in the capital markets. Capital markets create a channel between you (the investor) and the end user which could range from businesses, private individuals and the government. These investments mature over time, with dividends paid into your bank account or reinvested by your capital asset managers. This industry is overseen by the Securities and Exchange Commission of Nigeria.

4. Real Estate: The National bureau of statistics reports that in the first quarter of 2016, real estate services sector contributed to 6.46% of the Nigeria’s GDP. Due to the large housing demand, the market is rosy, and ripe for the picking. With the average rental price for a two bedroom apartment edging towards N500,000 in large cities like Lagos and N250,000 in smaller towns, and cities, A supply gap of affordable housing units can create significant investment opportunities.

In conclusion, if you intend to consider these options for your retirement plan, please research them thoroughly, and commit to a good company/provider before deciding whether it’s an appropriate investment for someone in their situation.

There’s never a right time to start planning for retirement; it will be unwise to not have a pension plan for old age!

You must retire in style!

is a fluid concept because it connotes different things and it offers different experiences for different people. While some individuals feel it’s something that would be worried about at a much later time, others view it positively and anticipate it with all wistfulness and some others dread it with great anxiety. Thus, it could be said that it is not a homogenous experience for everyone, but being as it may, someday in the life of every worker, he would be facing the reality of retiring days and the only underlining factor that determines retirement days, is the conduct of a person’s present lifestyle.
With the extravagant lifestyle of workers in civil service across the nation, it seems that only very few number of workers think about their positions some 30 or 40 years from now. It’s a concept so many assume to be so distant and as much as possible; would prefer to avoid the subject entirely. This avoidance could stem from a lot of factors which include fear of the unknown because growing old is a grey issue and the fact that nobody wants to grow old. Women deny their age, and so do men. For those who value their youthfulness and still hold on in the hope of discovering the fountain of youth in beauty products, surgery, natural remedies to avert physical ageing, retirement and the senior life would really be a frightening proposition, some would resort to colouring the grey hair, use skin tightening procedures to maintain young-looking skin, and other countless procedures.
Retirement is a time of significant transition as far as the use of time is concerned. However, it’s importance is made more glaring by the fact that the retired person is made to face some challenges because of his/her new status (as a retired person), hence one’s present lifestyle has a long way of affecting retirement days. It has been noted that retirement is a stressful experience for many because of its associated decision change in the matter of life arrangement generally. And most times, the moment retirement comes knocking on the door of a worker, it enters with challenges and expectations.
It is typically associated with stress for the average civil servant in Nigeria as retirement in Nigerian civil service is guided by Decree 102 of 1979 which deals with pensions and gratuity. The statutory age of retirement of public officers is 60 years while it is 65 years for judicial officers and 70 for academic staff of universities. However, with the reform of the civil service decree, No. 43 of 1988 retirement age has been put at 60 years or 35years in service whichever comes first. It must be stated here that irrespective of the type of retirement, the transition is associated with some stress situations like economic, social, psychological and occupational stress. These stress could emanate from different sources which include money, health, aging, search for a meaningful activity, caring for other family members, e.g. grandchildren or elderly parents, relocation amongst others.
Hence it presents a worse situation when the retiree is not adequately prepared to face this ultimate phase of life. Retirement life demands great managerial ability, and this would be best achieved with early preparation, it wouldn’t be too early to begin as soon as one gains his/her first employment. It has been observed that the retiree in order to experience a pleasant post-retirement lifestyle would have to device effective means of managing some challenges inherent in retirement as he will soon be confronted with the challenge of managing insufficient retirement benefits that come at the end of the month to cater for his needs especially if he still requires to securing residential accommodation, the challenge of a new and low social status; difficult health and declining health condition.
Planning for retirement is a necessary and important part of everyone’s financial plan as making positive plans at an earlier life with little savings reserved purposely for retirement, the better off since to live a comfortable life after retirement demands little sacrifice all along working days. Adequate financial preparation for retirement thereby would ease incidence of retirement adjustment failure. Also, there is an innate need for every worker to adopt a meaningful lifestyle that would not affect the future years of retirement because trying to adjust to low social status will pose a more difficult problem
Therefore, retirement planning should reflect every individual’s dreams, hopes, and aspirations in addition to meeting day to day obligations. It is essential that all prospective retirees should begin with a personal goal setting exercise that reflects how the individual wants to spend the last days of his/her life. Besides the financial preparation, one’s family style can equally affect retirement days, as loneliness is a major fear, but people who recognized the importance of good moral upbringing and have reared their children well, taught them the right values of respect such as caring for the elderly, love for parents, etc. would be most likely cared for by their descendants until their last days, as they would not be abandoned to lonely lives.
Hence to avoid the independence and physical challenges associated with seniority, individuals should ensure that in all life expense, they should consider the future financial freedom and independence, the challenge of living alone, retirement home, medication, health, and others. So the best option is for everyone, irrespective of income, to plan ahead by investing properly. Get creative in planning for retirement by collecting things for the sole purpose of selling them at a high return for extra money upon retirement.
Cut down on huge cost and avoid living an extravagant life that leads to squandering income as it comes. It would be great to have some positive influence on the life’s ultimate destination. This is why, despite the not so nice picture usually associated with old age, retirement, seniority, and related issues, the need for adequate concern for some 30-40 years ahead is indispensable.

Most workers, supposedly, hope that their retirement benefits will keep them going when they exit their workplaces but this is hardly the reality, pensioners revelations have confirmed.

Speaking to the Daily Trust, the National President of the Federal Universities Pensioners Association (FUPA), Dr Ayuba Audu Kura, said most of his contemporaries have failed to plan ahead of their retirement.

“We failed to think of what to do when we are not working and some of us are paying for that mistake now,” Kura said.

He said though he now engages in several businesses to augment his meager pension, he would have been better off if he had planned for his retirement.

“Many of us, when we were working, we never knew there will be a day when the rain will come. I told my children that I have been ‘a good-morning-sir somebody’ but I don’t want my children to continue to be ‘a yes-sir boy’ as we were when we’re working.”

Daily Trust’s investigation shows that most retirees receive less than N10,000 as pension monthly, which is less than the current minimum wage in the country.

The Chairman of the Nigeria Union of Pensioners (NUP) in Abia State, Comrade Chukwuma Udensi, laments that the state’s N1, 200 minimum amount of pension is the least in Nigeria.

Similarly, Plateau State Government last reviewed its minimum monthly pension of N2, 000 to ten years ago, reviewing the amount upward to N5, 140.

With the nation’s level of inflation, workers have no option than to plan for their retirement in order to have alternative sources of income.

“I engage in so many businesses, sometimes, I don’t so much look at the pension,” Kura Said.

A retired teacher, Mr Joshua Ochendo, told Daily Trust that most of what he does now as a retiree, he initiated them after retirement.

Ochendo, who now runs a non-governmental organization (NGO), said as a teacher in Anambra State, he did not plan for his retirement until he found himself out of employment and discovered he was not yet tired.

“I retired from work but I was not tired,” he said. “When I realized that, I started looking for what to do.”

“I was used to getting up and going to work. All of a sudden, I found myself at home every day. All my children are all grown up and there is no one at home to talk to. I told myself that if I don’t start doing something fast, I may start hallucinating.”

He founded his NGO to earn money and contribute to the society’s development.

He advised workers to consider current happenings in states where workers and pensioners are owed salaries, for months, as a pointer to the fact that if they do not plan for their retirement they would live to regret it later.

Since last year, states have been battling to pay workers salary and pension, a development that forced pensioners to stage several demonstrations to protest non-payment of their entitlements.

Between last year and this year, pensioners have staged a protest in Delta, Bayelsa, Plateau, Abia Osun, and Ekiti states to press home their demands.

In an exclusive interview with Daily Trust, the Head of Regulatory and Public Sector (North) of AIICO Pension Managers Limited, Mr. Sani Mustapha, said he met workers who lived in quarters provided them by their workplace, all their working years, who did not plan for where to relocate after retirement.

Mustapha said workers need to attend retirement planning workshops to learn how they can plan for their retirement.

Pension experts advise that if a worker’s retirement savings are broadly on track, the worker can still take steps to improve his sources of income at retirement.

After taking steps to improve your pension pot, Mustapha advised that workers can develop themselves academically to venture into consultancy after retirement.

He said: “If workers develop themselves before retirement by adding to themselves more academic value, I’m sure after they retire, they can still be useful and people will still look out for them for their services.”

He called on the government to desist from engaging international consultants to solve simple problems that local retirees, with an immense wealth of experience, can solve.