Retirement is a critical stage in somebody’s life that throws its own challenges. Having retired from your paid employment after attaining a certain age in line with the terms of your employment, you are retired and now meant to face a new phase of life. How much you plan and understand this stage determines how well you are going to spend the time till when death will come.
For participants under the Contributory Pensions Scheme (CPS), understanding how to start and cope with life in retirement is an important aspect of the scheme that takes priority attention of operators and the regulators.
The National Pension Commission (PenCom) at a pre-retirement workshop for Federal Government employees that will retire in 2018 organised by the Commission in Lagos, remphasised the need for would be retirees to understand what they are going into, to actually drive home the essence of the CPS.
Wilson Ideva, chief executive officer, High Street Consulting Ltd in his presentation at the event said there are key huddles or starting phase of retirement which the retiree must go through in entering the new phase of life.
Ideva said you are confronted with suddenly waking up and not seeing yourself going to work as before; thinking or making decision on where to stay, remaining at place of retirement or relocating to your place of birth or village or state capital.
According to him, at retirement, one must take time off to “debrief” or “refresh” in order to be able to think right. ‘Do not take hasten decisions.’
He said where to make permanent place of residence in retirement should be where you own a personal house because you must avoid rent payment in retirement; where can you fit into; where do you have most friends or acquaintances and where have you been used to in terms of business contacts, connection, place of worship and usual place of recreation?
Ideve said the next major decision would be what you should be doing in retirement. What to do again will depend on what your passion is; what you can do with minimum effort; what you can do consistently to avoid running in and out of business; what your resources can support, and again be aware that your fund is now limited and you cannot gamble with it?.
“The next pertinent question to ask after deciding where to stay and what to do is what the opportunities available to you are now that you are retired. Some of these opportunities include much time; freedom of choice of action; freedom to decide how you can deploy your scarce resources; and freedom to plan the usage of time available since all days (Monday to Sundays) appears like weekend”.
Another major consideration you face while starting your retirement is ability to take financial decisions. Upon retirement you have a one-off bulk fund called “Lumpsum” and thereafter, you have monthly pension that is intended to sustain your retirement life. It is therefore critical that you plan the investment of such bulk fund properly and judiciously.
In doing that, you must consider need to keep liquid asset (cash); need to ensure sustainability; need to be aware of all risks in any financial decisions; need to be aware that replacement of such fund is impossible; what you can do with minimum effort; what you can do consistently to avoid running in and out of business and what your resources can support, and again be aware that your fund is now limited and you cannot gamble with it.
Another pertinent issue is what type of investment should the retiree put his money in? What type of investments should be embarked upon if the above tools of financial planning and decisions are to be strictly adhered to, and such investment decision should be based on the following:
“Investment that generate regular income stream (do not lock up your capital at old age but put it in a venture that can generate regular income to enable you maintain the same lifestyle in retirement; Investment that you have control over and not through third party (the nature of business must be known to you; and Investment with limited risk which may give low “return” as against highly risky ventures with attendant risk or possibility of total loss.”
“Knowledge of the business venture is paramount and you cannot trust a third party to give you the business idea and you depend on him/her for the outcome. For instance, if you do not know much about oil and gas Industry, no matter the temptation of high return from smooth talking youngster, do not gamble with your hard earned resources and Investment in retirement should be in business with short term gestation period in order to guarantee regular cash flow.”
Investing in retirement requires that we watch where we invest.
According to Wilson Ideva, the types or nature of investment that we should be involved in retirement Federal Government instruments (Saving Bonds and Treasury bills); Buying and selling; Running supermarket/stores; Annual or yearly agriculture farming such as maize, guinea corn, cassava and beans.
After critically deciding on the type of business and the amount to invest, you should understand basic principles of entrepreneurship in order to be successful and for the business to be sustainable. Some of these principles includes: Feasibility study (Know fully well the nature of business, market potentials and profitability). This will entail: Getting some body or personally analyzing the business; Analyse availability of markets; Determine human capital requirement; Determine cost to be associated with the business (both direct and indirect costs); Choosing a suitable location for the business; Determine how much to invest; Finding out gestation period (when will the investment be fully recovered); Deciding type of banking support, if any
Also very important is re-ingratiation into the society because relationship management is key to a successful retirement.
“Retirement is a period of rest when we should “slow” down from our normal course of activities. This also includes “slowing down” in financial obligations. Effective relationship management in retirements entails Knowing that you have to take care of yourself; Knowing that you are only obligated to your spouse; Knowing that children and other family members becomes secondary and their financial obligations should be seen as secondary.”
It requires that you maintain cordial relationship with your colleagues or your friends who shares the same lifestyle and with “common interest”, and it also involves effective personal relationship management which includes balancing societal obligations but certainly not the time to start struggling for tittles
Because health is critical, how to maintain a healthy lifestyle and wellness in retirement is serious issue to bother about.
“Wellness is a state of complete physical, mental and spiritual wellbeing. In retirement, it is very vital that we maintain a balance of Physical wellness: – Being free from disease or sickness; Mental Wellness: – Ability to reason logically and discern to point; Social Wellness: – Ability to relate with people with minimal issues or quarrels and Spiritual Wellness: – Being right with God and the ability to withstand the test of time (trials and temptation).
If we maintain a good balance of the above, then, we can be assured of “real rest” during retirement.
