I’m not a retiree. In fact I’m still very far from that. But I know I’ll definitely retire one day; that’s a fact everyone knows. Most of all, I don’t want to be afraid to retire. This means I have to start now to plan for then. That way, it won’t hit me hard and choke me up.
I have met so many retirees and worked with and for some of them. I am also very close to a lot of them – my mother is one. I have seen those that retired satisfied and those that retired in agony. I know some that started processing their retirements early and those that did some ‘modifications’ to their files so that they can stay longer in active service. I have seen some that retired voluntarily and I have met those that were forced out of service. Indeed, retirement comes with a mixture of feelings and fear is at the middle of them.
Let’s be honest here, most people are afraid to retire. This is not because they don’t want to go home to rest and have time to do the things they never had time to do before. If you give a lot of workers the opportunity to stay home and receive their full salary, they will gladly grab it. So, workers are not afraid of retiring because they will stay home and become inactive; they are afraid because of the financial constraint that is attached to retirement.
To start with, most private sectors do not take care of the retirement benefits of their workers. The private establishments that do so were compelled by government to contribute towards their workers’ pension. But even at that, these workers know that their jobs can go at anytime and their contributory pension will be put on hold.
As for government workers, they know that when they leave active service, they may stay for months or years before their pensions start coming in. This has become a tradition that no one wants to query. The thought of staying for a long time without any income is quite scary. To avoid this, most workers keep tampering with some information in their files so that their retirement will be delayed. But that isn’t the solution to the problem.
If you consider that the pension paid to these retirees is too small, you may understand another reason workers are afraid of retirement. Someone whose salary couldn’t solve his financial needs will have a hard time adjusting to the pension, which is much lower than the salary. Just imagine the type of hardship the retiree and his family will pass through.
Anyway, I strongly believe that this hardship and suffering could be reduced if workers start early to plan for their retirement. It is actually the fault of any person who retires to hardship and hunger. I know that Nigerian economy isn’t good, but if others retired happy, you too can do so.
But most Nigerian workers make mistakes they pay for later in life. Those of us in active service need to learn the mistakes of some of these retirees – especially the unhappy ones – so we don’t make them.
Mistakes Made by Workers in Active Service
As I stated earlier, most workers who are uninformed make some mistakes which are detrimental to them as they retire. Below are the ones I know of:
a. Saving Cash: I don’t really want to talk about those that didn’t save at all. My concern here is about those that managed to save up something during their active service. Because of lack of proper guidance and information, most workers in active service leave their income as cash. For some reasons, they listen more to bankers who advise them to leave their money in fixed deposit. They show them some figures about compound interest and get these people confused. By the time they retire, they will only discover that cash is one thing – liquid. By then, it will be too late to invest it properly. In short, a large chunk of this savings is consumed while waiting for pension to start coming in.
Concerning this, I’ll call on experts to make out time to enlighten Nigerian workers – both those in the private and those in the public sector – on proper ways to invest their money for future use (our bankers are not helping us).
b. No Business Skills: I know that a lot of organisations, even government owned, do not allow their workers to engage in side hustle. Anyway, that is their own because when you retire into poverty they won’t be there to help. Well, what I want to state here is that most Nigerian workers are busy with their corporate lives that they never thought of learning a little bit of business skills. The only way they would have done this is by engaging in different side hustles, picking up one that interests them the most and then developing it. Since most of them didn’t do this when they were still young and strong, when they retire and start it, the whole thing becomes a flop.
So, my take on this is that workers, irrespective of what they are doing, should engage in side hustles that will sharpen their business skills. If possible, they should retire from service early so that they can develop this business very well before they get tired.
c. No Good Passive Source of Income: I know of some pensioners that bought so many shares during their active service. Well, we know what is happening in the stock exchange market these days. Anyway, the ones I know sold most of their shares during their ‘pension waiting’ period and used the proceeds to sort out family problems. Another form of passive income I can see our workers going into is estate. These workers hope to live by the rents and leases that come from their houses. But how many houses can a simple worker build? This might be a good source of income if there are enough houses and less troublesome tenants.
My take here is everyone should sit down and think of a passive source of income and start growing it now. Someone I know built a school when he was still in service (he was a banker). He employed people to manage it for him. Now that he has retired, he goes there to keep himself busy and still make money out of it. Those that can’t afford such a huge project should find other things. The truth is that most of us can’t think of one; so we need good recommendations from those that know.
d. Family Issues: The thing I want to point out here is about those that still give birth to children when they know they have less number of years in service. It is difficult to raise children with full salary, not to talk of with pension. People like this are so afraid of leaving service. They are usually the ones that continue to tamper with the documents in their files so that they don’t retire. I know there are some exceptional cases where people had delays with the coming of their children. In cases like this I believe parents would have planned for ways of raising the children. But I have seen those that have no reason giving birth late in life.
My take in this is that Nigerians need to think about population explosion when reproducing. They should also think and plan how to raise these children.
e. Non-Working Spouses: Of course when I say spouses here, I meant wives. I still don’t understand why some men encourage their wives not to work or find other sources of income. When it is time for him to retire, he will remember he’s the sole bread winner in the family. This can scare life out of them.
So, if your wife or partner isn’t working yet, encourage her. This will help you to plan better for your retirement.