Learning how to fund your retirement will help you leave a better life at old age. Have you ever thought of life when you get old? Well at one point or the other we must have actually visualized being old. We all desired to reach a stage in life when we don’t have to work anymore to pay the bills when we get to live how we want and travel wherever we want to you without thinking of work. Yes, we all can’t wait for that moment when we finally decide to retire. A time of rest after actually achieving everything we have dreamt of.
Well, all that is achievable but it doesn’t come at the speed of time, it’s not wishful thinking, it’s something that must be an intentional plan and strategically enforced to make this feasible so you won’t end up being a liability to anybody.
It’s quite unfortunate that most people in Nigeria haven’t really thought of having a retirement plan or thought of ever retiring, people feel that you have to work throughout your lifespan. In reality, you need to know how to fund your retirement if you want to enjoy your old age.
You need to understand that you can actually begin to build your portfolio and resources either through savings or investment in order to fund your retirement. So that by the time you are set to retire, you have a good sustainable income and get to retire on your own terms without being a burden to anybody.
Before we continue to talk about the process of retirement and how to fund your retirement, let’s take a pause and discuss a little bit what retirement is.
What Is Retirement?
Retirement is a point in life when an individual decides to disengage from actively participating or engaging in any work. These activities include their jobs, careers, etc
It’s a time of rest when you decide to discontinue engaging actively in your career or business.
What Is A Retirement Fund
A retirement fund could simply be defined as a savings or investment that has been accumulated by an individual in business or an employee over a given period of time which is to be paid pending on the terms of an agreement in the event of the person’s retirement.
Retirement Fund is not segregated for a group of people but it’s for everybody
Note that this fund doesn’t come up overnight rather it is built up through careful and strategic planning and this must be done during the working lifespan of an individual.
Retirement funds could be in the form of savings or investments that actually generate revenue for the person even without working. For instance, Bill Gates. It’s noteworthy to know that despite the fact that he is retired, he is still recognized and considered one of the richest men in the world. This is due to the funds through investment and savings he has built over the years, that still give in passive income. That’s what your retirement fund is meant to do for you.
Some people have this misconception that retirement funds are restricted to only the career path and work but having a retirement portfolio or fund is actually for everyone.
When it comes to working-class people, they are generally categorized into two different groups
1. The Career /Employees
These sets of people are those who work in either a private or public organization or a company. These people work in this company for a period of time and at the time of retirement, they are entitled to a retirement fund known as a PENSION.
Your pension is dependent on the retirement arrangements made by both the employee and employers of the company. Most people who fall in this category live their retirement age dependent on their pension while some build a retirement fund outside this.
At the time of your retirement, you will be entitled to have access to revenue either monthly or termly depending on the arrangement for the pension.
2. Business/Entrepreneur group
These sets of people actually have their own businesses and are not accountable to other people. They plan their retirement fund out of their own business and decide upon themselves how they want their retirement fund built.
Their retirement funds are mostly based on the investment and savings portfolio they have built over the years.
Now, we are able to differentiate between these two sets of people. This will give you an idea of which of the categories you fall into – and enable you to make plans accordingly.
Tips To Consider on How to Fund Your Retirement.
Timing is one of the most important aspects of a retirement plan because knowing the right time to start off your retirement goal helps you to get your desired results.
Retirement planning is a whole life process. You can kick start your retirement plan at any time but it’s best to begin it when you are young or at the beginning of your career and business to provide you with sufficient time to get your desired results.
When you decide on retirement, it takes quite a lot of strategic planning to put things into place. This planning involves you deciding on how and where you want to live especially at old age, so you have to ensure you plan well enough to ensure everything goes into place. Improper planning yield little to no results.
Having a retirement plan helps you to take care of all aspects of life including your finances in the event of retirement. In planning, you identify a source of income, set target goals, and know the desired retirement lifestyle — this will ensure you make good decisions that will enable you to retire on your own terms. It also helps you to enjoy a safe, well-secured, and fun retirement.
Ensure that proper actions for every well-thought-out plan are executed.
Here Are Five Ways You Can Fund Your Retirement.
Having a sustainable savings is a good way to fund your retirement. The major reason why we save is to have something aside for futuristic needs. To ensure that your savings are sustainable in retirement, start saving early so that you can live the desired dream in your retirement age
Investment is a great way to fund your retirement, there are various platforms one can venture in, ranging from real estate investment to the stock exchange market, and then to actually investing online using platforms like PiggyVest,e.t.c.
One advantage of investment is that it provides a means of passive income to you so that even when you aren’t actively engaged in it, Your revenue is paid to you.
3. REAL ESTATE
Buying and owning real estate is a great investment strategy and you need to leverage it. One advantage of owning real estate is that its value usually increases over time. And who says you need a huge capital before you can start investing in real estate. There are companies that offer real estate investment to individuals – and allow you to pay off the capital in installments. You can adopt this strategy and within a few years, you can become a property owner.
4. INSURANCE PLAN
An insurance plan is very important for everyone to have. Ensure that you have insurance for some if not all of your properties in your possession. Insurance makes things a whole lot easier in the event of a disaster because it also ensures you don’t bother yourself with unnecessary expenses at the point of retirement.
5. LEARNING A SKILL
In retirement, you don’t have to actively participate in your work — however, this doesn’t mean you have to quit working.
Ensure you learn a skill that will give you an added advantage of earning passive income. For example, Amazon Kdp where you upload your books and write up and Amazon keeps paying you for as long as people keep purchasing your work. So even while at retirement age you still get to make money for yourself.
Read Also: Top 18 Real Estate Companies in Lagos
Benefits Of Having A Retirement Fund
- It enables you to have the desired life you have always wished for
- It prevents you from being a liability to anybody
- Your retirement fund provides security to you at old age.
It’s important for everyone to have a retirement fund and it is good to always plan ahead for it.
Take the right steps and ask the necessary questions. Be your own boss even at old age and live up to your expectations.