Umbrella body of insurance companies in the country, the Nigerian Insurers Association (NIA) has urged retirees to open their mind and consider various retirement options including annuity.
The body noted that annuity has unique benefits that offer payment for life, which matches the need and unique characteristics of most retirees in today’s challenging economic environment.
There is need for retirees to embrace annuity products offered by insurance companies as a way of staying happy and guaranteeing steady income in retirement, the NIA said.
The Association also asked prospective retirees to receive unbiased and independent practical advice and training, addressing their emotional pressures, fears, questions, personal financial planning and investment issues necessary for prudent management of their lump sum payment.
Retirement experts gave this advice this during a one-day workshop organized by the NIA, with the theme, “PREPARING FOR TOMORROW TODAY,” in Lagos.
One of the presenters at the workshop, Olusola Ilori, who spoke on “Importance and necessity of building economic back up,” observed that many retirees were ill equipped to invest their lump sum themselves or even to choose the right financial advisers.
While speaking on what the retirees should do before investing their lump sum, she stated, “Take your time; Take a good look at yourself (especially your financial habits and history); Get good independent advice from three good financial advisers;
“Have a plan; Diversify don’t put all your eggs in one basket; Become knowledgeable and skilled in whatever thing you decide to do; and start a business on a small scale.”
During the workshop, the association warned the retirees to avoid scams and get rich quick schemes. She stated, “Don’t lend money to people on your lump sum (if lent to your family, consider it a gift); Don’t buy a new car; Don’t marry a new wife; Don’t start building a magnificent house.”
While explaining the importance and necessity of building economic backups, she stated that there was need to maintain balanced lifestyle out of office.
The NIA said, “There is the need to attain financial independence. There is the need to strive for economic self-sufficiency through other sources of income to compliment pension paid monthly to retirees”.
“On no account should one be pressurised to retire without planning and having at least two or three other streams of income to compliment pension.”
This gives financial security which guarantees dignity and comfort in retirement, she stated.
Ilori warned that: “No doubt, retirement is going to come someday and for the discerning, preparations for this critical phase of life cannot start sooner for time is not your greatest friend on this project, in planning for the long years of retirement.
“For those that do start early and prepare adequately, the usual worries about surviving will not be an issue. Unfortunately, in this country people tend to believe that retirement is best dealt with when the time comes and that somehow, there will be the money to fund it even though they may not have any idea where the funds will come from.
“The unfortunate thing about this strategy is that, it becomes too late and the consequences are often dire.” Most professionals and executive often fall into this trap, she observed.
