LIVING LA VIDA LOCA! – Retiring without money worries

Senior Couple Driving Convertible in the Country
Meet Ojei and meet Bisi, both 50 years old. Ojei works as a factory supervisor in a metal factory and has been the boss on the factory floor for almost 25 years. Bisi, on the other hand is a high-flying executive who is always looking for the next best-paying job. Ojei makes six figures a year; Bisi makes seven. Ojei started planning for retirement 25 years ago by saving N100 a month, while Bisi started a decade ago with N1, 000 a month. Who do you think is better prepared for retirement in fifteen years?


Although people talk about retirement as the ‘golden years’, uncertainty has tarnished the glow for many. Many of us don’t know what retirement will be like, though we harbor a vague hope that everything will be ‘okay’. While some of us have some kind of pension plan in place, we many times fail to leverage it. If you read the previous article 5 Sizzling Money Secrets to Know, you’ll quickly realize that we often fail to factor in inflation, meaning that whatever we save will have less value in the future, so we’ll need to save more. There are steps you can take, however, to ensure that you’re singing la vidaloca into that retirement night, but you have to be willing to put in the necessary effort.


Let’s go back to our two friends up there. From his teenage years, Ojei has put aside 10% of whatever he earns as money towards a rainy day. When he got the job at the factory and was steadily promoted, he increased his 10% and kept saving. He then put the accruing funds in a company-funded investment vehicle and also maintained his company pension fund. He’s even thinking of retiring later than the official time. Bisi, on the other hand, has never practiced the art of saving. She enjoys a quite lavish lifestyle and hardly denies herself of whatever she wants. She has set money aside, but it is definitely not a package that can match her current lifestyle. Now she’s 50 and the mirage that was retirement has suddenly come into sharp and clear focus. It’s time to have an action plan. Of the two, Ojei has better plans for his retirement. Because he started 25 years ago, the beauty of compound interest has increased his funds greatly. While Bisi saves more now, she’s still lagging behind Ojei on being prepared for retirement.


So, what can you do to avert retirement money worries towards? The following does not just apply to 40 year olds and above. As long as you hold down employment (or you employ people) you should definitely start thinking about your retirement.


  1. Start NOW- this is a cardinal rule. We’ll say this again- the best time to plant a tree was 20 years ago. The next best time is now. Time is the biggest advantage you have if you want to retire without money worries. This applies to you whether you’re 20, 30 or 50. The sooner you put your money to work, the sooner it can start earning a salary.


  1. Be Consistent- what separates the man with the six-pack abs from the man with a beer keg belly is consistency and discipline. One does his exercises without fail, and the other one, well, doesn’t. If you want to banish money worries, then you need to consistently put money aside, whether it’s every week, every month or every two months. And where you can’t ‘auto exercise’, you can auto save. Simply have the money deducted from your account/income before it gets to you. Set an amount to be deposited into another account or investment portfolio, and move on.


  1. Stay Committed- many things will come from left field to tempt you to take from your retirement fund. Make it as difficult as you possibly can to withdraw money from it, and under no circumstances should you reduce your contributions. In fact, look for how to steadily increase what you save. After all, you’re the one going to spend the money later. So, why punish your future self by skimping on savings now? Think of it like this- the more you set aside now, the more comfortable the future you will be. Let that motivate you.

If you’ve taken this to heart and already started some investment program, the following strategies should be added to the three above-

  1. Keep an eye on it- remember the craze to buy bank stocks a few years ago? People jumped on the bandwagon without any kind of real understanding of what they were doing or how to make the best of the investment. Thus, many bought the shares and ‘sat’ on them as it were. If you are under the impression that all you need to do is simply buy investments and keep it, you’re very much mistaken. You need to regularly check, examine and adjust your retirement portfolio so you can weed out what is not working or increase the ones that are. If you don’t do this, you may discover, when you need it, that your portfolio is not worth what you thought it was.


  1. What do taxes have to do with it– This is your retirement we are talking about; yours. Your golden, ‘sit back and relax after all the hard work’ years. But the government will still take its share. Knowing the taxes that apply to your portfolio can help you in making a plan on how to protect what you have or how you can minimize tax impact. Policies and laws can also affect what’s in your portfolio. This means that you need to be an active participant. Don’t sit back and let others make decisions for you. We repeat- this is your Don’t take it lightly.


  1. Find an experienced financial planner– There’s a lot of what is called “dem say” in our society. People hearing news from second- or third hand sources and passing it on as gospel truth. You thus find people buying investments because one ‘aunt’ or ‘cousin’ told them it was ‘solid’. There’s also a conception out there that getting a financial planner will cost you a lot of money, so it’s better and cheaper to make your own financial decisions. This is one of those ‘dem say’ myths. ALWAYS find things out for yourself. Let’s, for the sake of argument, assume that it is true; is your retirement not worth getting professional advice


and management on? Think of it as taking your precious child (portfolio) to a professional medical doctor instead of an herbalist.


Adopting a strategy, no matter how simple, towards your retirement can mean the difference between a life of ease and a life of stress. We hope that some or all of the above will prove useful to you, especially if you’re just starting out.


And like any good medical practitioner will tell you, it always pays to get a second opinion. So call our KISS agents now on 0800MERISTEM for advice on how to set up a retirement plan or hire a financial planner. We want to see you sitting on that beach sipping your cocktail, and pleasurably sighing- “ahhh, this is the life!”


Next: Money to spend and loving it! Learn the steps that make retirement attractive.


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