Planning for Retirement

How prepared will you be when you get close to retirement? That depends on you.

You’re still young! What does retirement have to do with you? A lot, actually.
When it comes to building wealth, there should be no limit, especially because you stand the chance to gain a lot when it comes to retirement.

How you ask. Well, you have the one thing other generations probably don’t have -Time. The 5 to 10 years before you retire is a critical time for planning to meet your goal.

Bringing it Home…..
Let’s assume you started investing N10,000 monthly at age 20. Your friends on the other hand took trips and lavished their pocket money buying different things and didn’t start saving for retirement until age 30, by which time, they have bills and debts piling. At age 60, you’d have around N880,000 at the annual rate of 10% while your friends would only have N660,000. That 10-year head start makes you richer than them!

Facing some big Retirement Choices?

Taking some of these actions now could help to ensure that you have what you need to enjoy a comfortable retirement lifestyle:

1. Make sure you’re diversified and investing for growth by maintaining a sound mix of stocks, bonds, and other assets that fit your risk tolerance, investment time horizon, and liquidity needs.

2. Take full advantage of retirement and pension accounts, especially voluntary contributions and increase your retirement contributions up to the maximum allowed, so that you can have a clear view of your total retirement assets.

3. Estimate your predictable retirement income such as salary, savings, and investment accounts including your employer pension contributions. To make your assets last throughout your lifetime, apply the frequently used rule of thumb for retirement spending known as the 4% rule. It’s relatively simple: You add up all of your investments and withdraw 4% of that total during your first year of retirement.

Retirement may seem like a distant event, but it is important to plan carefully and set realistic goals so you can enjoy the type of retirement you have dreamt of by saving and investing adequately for retirement.

For example, plan to invest just 1% of your salary into the employer plan.

Once you commit to a 1% contribution, you can increase it gradually each year. For example, in year two, you can increase your contribution to 2 percent of your pay. In year three, you can increase your contribution to 3 percent of your pay, and so on.

Ready or not, Retirement is Coming

You need to ask yourself - what do you want to do in retirement? Do you want to travel? Spend time with your grandkids? Lounge at the beach? Or just play catch-up?

You need to take advantage of the retirement opportunities that come with age to avoid a financial crisis in retirement. You can start moving toward your retirement dreams today by investing in different asset classes available on Wealth.ng.

You have decades to accumulate and grow your money. Make the smart move today!