October - December 2016 •
The Lion King
• 9
H
ave you checked out how much
you have in your retirement sav-
ings account? Is it enough to
keep you happy when you retire?
Yes, many of us are required by the
Pensions Act to save and it is usually
deducted at source from your month-
ly salary. So, basically at the end of
each month, your employer deducts
7.5% of your salary adds another 7.5%
and sends it to your Pension Fund
Administrator (PFA) to save towards
your retirement.
Your PFA invests this money on your
behalf and earns returns which are
added to your savings to ensure that
you have enough money to live on
when you retire. But with prices of
By Anthony Osae-Brown
Howmuch do you need to save
for retirement?
goods and services going up every
day, how are you sure that you will
have enough money saved when you
retire?
Imagine if your salary at the point of
retirement is N1 million per month, and
then you retire and all the annuity you
can buy can only afford to pay you
about N100, 000 a month. Will that
be able to sustain whatever lifestyle
you may have acquired through your
working life?
It is important to think through these
choices right now by estimating how
much you think you will need when
you retire and start saving towards it.
There are financial calculators online
that can give you estimates of what
your current savings can amount in
several years time. You can use these
calculators to estimate what you
will have in your retirements savings
account based on how long you think
you will work before retirement.
If you think what you will get at the
time of retirement may not be enough
to support your acquired lifestyle, you
may consider voluntary savings into
your retirement savings account to
ensure that you have enough money
at retirement. Starting savings early
can make a lot of difference in what
you have at the point of retirement
and possibly the lifestyle you live at
retirement.
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