There are several reasons why you might feel unbothered about planning for retirement. The reasons are endless, from not having adequate funds to the popular myths that hinder you.
Some of these myths are:
- You are too young to start planning for retirement.
- Pension is for the elderly.
- Pension is not sufficient to sustain you during retirement.
- Pension companies never pay on time.
- A pension is unaffordable.
These myths are not only untrue, but they prevent you from making the decision that will impact your “golden years”. Planning for retirement starts with thinking of your post-work goals and how long it will take for you to achieve them.
A lot of people don’t understand reasons why getting a pension account is important. Here is why you should start planning and not wait:
1. Savings is easier when you’re not under pressure: Starting a retirement savings plan early reduces the pressure that mounts as those golden years approach. It makes the transition to retirement seamless. With a well-planned retirement, that stage of life is worth looking forward to.
2. Don’t miss out on Employer Contributions: This is the money that is contributed by the employer into your pension fund, as an employee that works in an organisation with at least 3 employees. Such employers are mandated by the Pension Reform Act 2014 to make contributions to their employees’ Retirement Savings Account (RSA). Job changes are not affected by such contributions as you only need to share your RSA details with your new employer, who is mandated to continue remitting their portion of the monthly contribution. In such instances, you can also contact Premium Pension to alert your new employer.
3. Relying on Family members or friends is risky: Such an approach makes life during retirement uncomfortable and unpredictable, to a large extent, because misunderstandings can damage the relationship of both parties involved. This can also be a burden to such family members and friends — a situation you want to avoid. A plan with Premium Pension secures your golden years.
4. Take advantage of compound interest: When it comes to Pension, time is your greatest asset. With compound interest, you earn returns that are added to the initial amount, making subsequent returns higher than the previous one. Let’s use an example:
Say you contribute NGN100,000 to your RSA, with an interest rate of 10% annually that compounds annually. At the end of the first year, you’ll have 110,000 – the principal plus NGN10,000 in interest.
In the second year, you’ll have NGN121,000—the NGN110,000 from previous year plus the added interest of NGN11,000. By the end of the 10th year, you would have earned NGN259,400 more than double your principal. This amount is earned without you contributing any additional funds in those ten long years. And of course, contributions are made monthly in the current contributory scheme. Therefore, the amount earned with compound interest will be exponential.
Compound interests work best with time. This means you have to begin early to make the most impact on your retirement savings.
Premium Pension is licensed by the National Pension Commission to manage the pension accounts of members. This credible PFA invests your contributions in high-yielding instruments.
5. Flexible risk tolerance and investment opportunities: The multi-fund structure that exists in the Nigerian Pension Industry provides you the opportunity to choose a preferred based on your risk profile and age, as well as your values. For those younger than 50, they have the option of investment in Fund I or II, which differ based on their risk profile, while those above 50years, can choose between Fund II or III. In addition, Fund VI provides an option for those with preferences for non-interest pension funds
A more relaxed retirement: Pension provides you with something to fall back on during your golden years. You won’t have to struggle with working overtime when you should be living a comfortable life. Premium Pension prioritizes customer care and support.
6. Access to leading investment partners: With Premium Pension, pensioners have access to investment experts who are recognised in the industry. Pension accounts are continuously reviewed and monitored. We also offer various approaches to meeting the client’s retirement objectives.
Plan now to live a life of comfort
Now you understand the benefits of planning early for your golden years. At Premium Pension, we provide services that meet our retiree needs and always make your money work for you even while you work. To start planning, download your free copy of the eBook to know the best options available for you.
Make an early move. Open a Premium Pension account to begin now.