I have received a number of reactions on my post on annuity. That is how it should be because 99.9% of workers by my casual estimation see retirement as something decades away till forms arrive about a year to their retirement date. Organizations pay little attention to retirement issues which include retirement planning; so, do pension fund managers. But it is a concept that should be highlighted in the workplace to all staff at least once a year. Organizing a workshop one year to retirement is wrong. What can anyone do in one year? Imagine widows and families fighting over benefits! Workers unions are busy chasing current allowances and pricing of petroleum products totally ignoring life after service. As our elders say, elephant meat is on your head yet you are using your toes to search for baby snails. To note:
I) On how much one should request for as lump sum payment, I recommend not more than 25% of the amount in your Retirement Savings Account (RSA), if the ogas will listen to you. I took this position among other suggestions in my memo to the House of Representatives Committee on Pensions last month (the Deputy Chair of the Committee acknowledged receipt of my memo). The 75% will be reasonable when spread for the rest of your life. An elder Statesman Dr Edwin Clerk just celebrated his 94th birthday. If he retired at 60, it means he has been receiving pension for about 31 to 34 years depending on when payment commenced (some States in Nigeria start after 3 years; Akwa Ibom State, also in Nigeria, starts one month after retirement). It is wise to start early to plan.
2) DO NOT BORROW MONEY FOR INVESTMENT AFTER RETIREMENT. This is so important I decided to put in capital letters. If you borrow to start a business how are you sure you will live long enough to pay back the loan? Suppose the project fails? Yes, I am pessimistic because research in developed countries show that more than 70% of start-ups do not see their 5th birthday (one reason you should start while working). It is unfair to leave debts for the next generation. We are not highlighting the massive debts that LG Councils, States, FGN are acquiring. It is like eating the food of our grandchildren and great-grandchildren today more so the monies are either shared or put into projects that will not generate income stream for the future. Whoever visits Eiffel Tower in Paris should marvel at how that 1886 project generates millions of Euros daily. If our governments used oil money the way Middle Eastern countries are using, who would be afraid of lockdown due to COVID-19? With zero sales of oil, Nigeria is already panting. In the US public debt has gone through the roof as at today but they have a strong economy.
At the individual level, the story is the same. If you did not build a house while working, pray that your children will not sell the land you bought. And in the name of everything that is good, your children must not sell your property or borrow to lay you to rest. This is one aspect of culture one cannot fail to admire Muslims. All the fanfare implies scarce millions thrown into earth and covered for ants to feast on. Let’s review our value system.
On a personal note, as my father was about to leave, he said to me, son, I don’t owe anyone a kobo. These are the people who owe me; don’t ask but if they pay, take. That was 30 years ago. None of my siblings went in search of receivables if I might term it so. Thank God we have acquitted ourselves well without the bad blood that goes with debt recovery.
3. Did I say you should not invest after retirement? No. Use what I term “dispensable funds.”. If you receive monthly pension, deduct what you need for minimum sustenance then invest the balance for your family of course. Never tamper with money for food, drugs, and rent. It is assumed that all children are out of school by then. If not, factor in school fees. If you did not enjoy luxury goods and services while working, it is irresponsible to borrow or sell a property for such things after retirement. Rather, go for peace, and pursue it as Scripture admonishes. Let your children start on a clean slate. But if you use your cash and the project is not through when you bow out, they can complete it. Don’t put them in a debt hole such that they have to fill the hole first, climb out before standing on bare ground to begin their climb. It is one reason some children move faster than others.
Why do I write these things free? Because I am a professional teacher; I regard it as public service, and many facts I use are free on the Internet. My reward would be if you use this free information well. Almighty guide and bless you. Amen.
I rest my case.