Are you adequately conscious about retirement?

But how well do we plan towards that stage when active working ceases or is at the bare minimum? This article begins with the question, are you adequately conscious about retirement?

Mr. Emmanuel Ayeh (name replaced), a 68 year old retired headteacher of one of the nation’s renowned secondary schools was having a heart-to- heart chat with his daughter about his current stage of life. He admitted having made some mistakes which has cost him dearly in retirement.  

He cited his error as having made some investments that have gone wrong. Some of the investments were made with his retirement in mind.  They seemed good at that time so he didn’t look too much at other schemes.  In his description the national schemes were a mere pittance.

But his intended sources of income whittled away leaving them well below what he expected. He had to now rely on the national schemes and what is left of his other options.  He would have done things differently if the years would roll back. 

There may be such retired persons we know now who are ‘enduring’ retirement rather than living and enjoying it.  Working through this field, some factors have been identified as the causes of hardships in retirement.  This piece would begin to discuss a couple of factors identified  and their mitigation.  

Retirement on Hard Times

The primary cause is the lack of consciousness of the fact that retirement is always much closer than  we think.  Being in our 20s, 30s,  40s and 50s (for the quiet obstinate ones), we are very likely to place retirement on the long finger and push it into eternity.  

Hence, the effect is to defer all related arrangements to eternity as well.  Soon the bells ring and reality sets in that retirement is only 3/4/5 years away.   All ploys to extend the work life begins and while some succeed others don’t.   It works for some highly specialized professions but mostly doesn’t work out.  For those who don’t succeed, depression sets in and retirement ‘undesired’ begins.  

This situation is so real and has a statistically high rate of occurrence.  Every young person is at risk of this phenomenon if they lose the consciousness that retirement is so close and begin planning for it.  It is fine to begin to look at your retirement from your first job most probably in the 20s. Look to both the mandatory schemes and the voluntary schemes like ‘My Own Pension’ with United Pension Trustees, which is easy to join and contribute to it by MTN mobile money.

Low consciousness of retirement; risk elements

Another cause of retirement hardship is lack  of knowledge of the avenues that cater for us in retirement and the risks inherent in them.  This sounds more like Mr. Ayeh’s story.  We may be conscious of the looming retirement but may not be fully aware of the where and how to place ‘our eggs’ for the future and take care of them.  

It is very common to see people who leave their retirement provision on autopilot because SSNIT exists (for the formal sector workers) or some savings or business exist (for informal sector people).  There is the need to take control of one’s pension by at least knowing the plans that would would cater for us and how those plans are doing.  

The Benefits of been conscious about retirement

If you are contributing to a pension scheme just get to the know the type of benefits you are entitled to.  It is also important to know whether the funds are growing with contributions and investment returns.  You need to know how much your scheme management cost you. For private schemes (2nd & 3rd tiers) all such liabilities are most likely paid from the fund.  Are your contributions being paid by your employer at all? These are simple and non-technical scheme related questions which you can find answers to.  

Your Business as Pension

If you see your business as your retirement provision look for the risk factors that can eat up the business.  There are competitive and industry dynamism/revolution that makes some businesses obsolete. Imagine someone in the 90s who planned to use a communication centre for their retirement.

 Succession of business is crucial.  Who takes over the day to day operation of your business in retirement is very important. An inefficient successor may run down the business, leaving little or no income at all to the owner in retirement.

 Basically you are required to have an idea of what can work against your plans.  In this column we would look at the various retirement planning avenues and discuss what you look out for among other few other stuff that would help your retirement planning.  

Thank you for reading but also very grateful to Serwaa who shared her Dad’s story.

The lessons here are simple. Retirement is not in eternity, it is only seasons away. We make the most of it if we become conscious of it and make plans for it.  Have an idea of what your plans would give and keep monitoring.  That’s a great way to be in control of your future.