With the global financial crisis and no social security in Nigeria, it is really important that individuals plan their retirement to ensure a comfortable life after they retire. Retirement isn't a word everyone thinks of until they are a few years or months away from retirement. For some it’s just another plan that comes with their jobs, for others it’s their future living.
Retirement is all about thinking ahead, seeing the inevitable future and being prepared for whatever challenge you come across. The first and most important question you need to ask yourself is ‘what do I do after I retire?’ The best way to get your answer is some quiet time to look into the future.
Think about how you want to spend the rest of your life, busy and active or relaxed and living the simple pleasures of life or a combination of the two. Find what will really make you happy and base your retirement plan according to that. Many people choose to fulfil their dreams, whether it be to become a cook or grow their own fruit and veg, while others choose to travel the world and see new things.
Your employment retirement plan is an important part of your future financial security, so it is just as important to understand how it works and what you will receive. There are two main types of plans:
- Defined benefit - a specific monthly benefit at retirement funded by the employer
- Defined contribution – a non-specific benefit amount at retirement funded by you and/or your employer
Make sure you find out which kind of plan your employer has and start planning for your future. As long as you figure out what you want in life, then you already have a good retirement plan.