Making the right savings for your retirement

What you do with the lump sum you collected from your pension savings at the point of your retirement is important in determining how well you enjoy your after work life. You are presented with two options that is Programmed Withdrawal or Annuity.

The Contributory Pension Scheme, CPS, seeks amongst others to ensure that every worker receives his retirement benefits as and when due where Section 4(1) (b) of the Pension Reform Act, PRA 2004 allows a Retirement Savings Account, RSA, holder upon retirement to utilize the balance of his RSA for ‘Programmed withdrawal or annuity for life purchased from a life insurance company licensed by the National Insurance Commission, NAICOM, with monthly or quarterly payments.’

So choosing how to convert accumulated pension savings into income for retirement is one of the biggest financial decisions most of us will take. So many of the retirees leaving the public or private sector job must need to optimize lifetime savings for themselves and their families to be able to actualize the key objective of these scheme.

In recent years, option for taking pension income have widened significantly even with banks and investment firm offering similar products to engage personal savings option.

But even as options increase, most people going into retirement my open their eyes for quality options.

Experts here raise questions that would guide you in making these choices to maximize your income:

•  Look at allow your options at retirement rather than just the annuity on offer from your pension provider.

• Exercise your right to shop around for the best annuity rate using the open market options.

·         Consider whether you might qualify for an “enhanced” rate if you are in poorer health who retire do qualify.

• Think about your family. Should you provide for them when you die through a joint-life annuity or capital protection?

 

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