ARE YOU PREPARED FOR RETIREMENT?

How would you like to spend your retirement years? Will your nest egg be able to provide the kind of lifestyle that you have become accustomed to and how much will it cost? 

Sadly, many people end up impoverished in their later lives or are totally dependent on their children or other family members. Yet other retirees are redefining retirement as an exciting time to explore new interests. No longer the end of work life, it has become a new beginning, often the start of a new career, world travel, going back to school, starting a new business venture, spending more time with family, or engaging in high-impact philanthropic ventures that change lives.

How much money will you need?

Thanks to the Pensions Reforms Act 2004, most of us are aware of the importance of pensions and retirement planning. Pensions, while they are an important part of retirement income, will very rarely cover all your retirement needs if you wish to maintain a certain standard of living during your retirement years. Your retirement income should be supplemented with income from other personal savings and investments.

Everyone’s retirement goals are unique and a function of their own age, stage, and financial situation. As life spans get longer, it is not unusual nowadays to spend over 20 years in retirement, so you need to be sure that your financial resources can last as long as you do. If you were to retire at 60 and then live for at least another 20 years, how much income would you need for each year of your retirement and how much do you have to save now to generate that kind of income to afford the lifestyle you desire?

Your current income is a good starting point for calculating your retirement saving needs. Experts estimate that most people will need between 65% and 80% of current income to maintain their current lifestyle when they retire. Online retirement calculators are available at several websites including those of Pension Fund Administrators.  These are useful tools to help you to estimate how much you will need in retirement.

Start early

In your 20s and 30s, retirement seems lifetime away, but it’s never too early to start planning for it right from your first job. Those who start planning for retirement in their 20s have a better chance of building a large nest egg and achieving sustained financial success.

Educate yourself

Financial security and knowledge are closely linked. It is important to have a broad understanding of the basic investment principles; how you save is just as important as how much you save. Educate yourself on the different savings options available and what might work for you.

How much risk can you afford to take?

Your investment portfolio should be tailored to reflect your age, the amount of money you have and will need, and your risk tolerance. Inflation and market volatility have forced investors to face the reality of their financial position. With the spectre of inflation always lurking, and the possibility of spending more than two decades in retirement, your investment earnings will have to keep pace in order for you to have any chance of maintaining your current standard of living.

The type of investments you make play an important role in how much you would have saved at retirement. A diversified portfolio of cash, bonds, stocks and real estate will help protect you from investment risk. You don’t want all your retirement funds invested in high-risk investments; in spite of the higher yields this might generate, you need to balance risk and return in order to achieve your goals. The asset allocation will largely depend on your risk tolerance and how long you have until your retirement.

Health is wealth

The reality of declining health as we age should be addressed seriously in retirement planning. Even as the most elaborate retirement savings can be decimated if you find yourself with health challenges and without adequate health insurance in place. No matter how healthy you currently are, build a financial cushion that allows for unexpected expenses and do not ignore your health insurance.

Enjoy your retirement

After several years of hard work, your retirement years should be one of the most rewarding of life’s stages and an opportunity to fulfill the dreams that you finally have time to pursue, free from routine constraints. Make saving for retirement a priority and start now.

All credits for this blog goes to Nimi Akinkugbe of Next234 for her wonderful article, personal finance. I could not find something else that gives life to what I've been talking about all these months that I started my blog.I remain, Olumide Ogungbemi,  07033588160 and 07056989820 are my numbers and I'm an Insurance marketer with Standard Alliance Life Assurance Limited.

Going to the next level? Take this way…

The elections have come and are almost done and most of our politicians at the Federal level know their fates already for the next four years. Money, both public and private have been spent, sleep and peace of mind have been taken through rigour, for the unlucky, it’s back to the trenches and for the lucky, it’s party time!

Foreign embassies and airlines would be besieged like the wall of Troy by countless politicians of all shades and caliber trying to get on the next available flight abroad, it’s time to relax, it’s time to party. Foreign hotels and travel/tour agencies are already smiling to the banks because their suites are partly or fully reserved to our dear public servants. Town homes, condominiums, flats, chalets, cottages, beachfront homes have all been booked in various parts of the globe for our people’s relaxation and pleasure for at least 3 weeks. For the fortunate politician, the next four years are assured. The foundation for the next level has been laid.

What, ladies and gentlemen, are you doing about the next level? Your job or business pays you well enough, for all your know and care, everything’s going quite well. I’m happy for you and what I have for you will keep you on the right track for as long as you want. When you’re looking towards the future, you think generally in the area of investments right? So, let me ask you…What do you have in the pipeline of investments and dreams?

Have you started saving towards actualizing your dreams? Let’s not kid ourselves, the foreign trips, the villa in the village, the Escalade or Maybach would drop from the skies into your laps, you need money to buy them. And mind you, for guys that work in the private sector, hustling daily for that income…the good things of life don’t come cheap. As a young man or lady, your major pre-occupation is how to secure your own future. It’s up to you not the government, not unless you’re a political affiliate or acolyte of someone in the rock. One thing is certain, unlike those who have unfettered access to free-flowing money; serious people cannot afford to be sybaritic, extravagant and wasteful.

In as much as you’d love to junket around the world, shop till your feet hurt, sip rosey from the finest flute glasses and wash your hands with Dom Perignon, that’s not securing your future. That’s building castles in the air. Here’s what can help you secure the future and assure you of the next level.

A SUMMARY OF IPP

Money was made to work for you. While the importance of work is not lost on you, your savings and investments ought to make money for you. What you need is a plan designed to make your savings act as a valued added pension plan and at the same time a long term investment.  You can achieve that with IPP.

IPP is an acronym for S.A Life’s Income Protection Plan. This is a life assurance policy designed by Standard Alliance Life Assurance (S.A Life) for young people who are at the beginning of the productive and professional years. This plan allows for you to make the most of these years and in the process set up a target plan which can at the same time act as retirement plan not leaving out guaranteed value and return on investment.

 FEATURES OF IPP

·         Minimum investment of 20,000.00 naira monthly

·         Premium payment could be monthly, quarterly or in bulk one installment

·         Return on investment of 5.5% annually (compound interest)

·         No administration or hidden charges

·         Tenor : 7-year minimum term

BENEFITS OF IPP

·         Guaranteed value and regular return on investment

·         Provision of financial security as it is designed to make your fund grow as you do not make frequent withdrawal like the regular bank account

·         The policy is flexible as there is chance for partial withdrawal after a period of time

·         Compensation on the policy in the occurrence of death of the holder of the policy is the sum assured

CUSTOMER BENEFITS

·         The policy can be used for building a pool of money for future purposes such as financing a business, buying property or financing children’s future education plans

·         In the absence of a pension plan, it works excellently as it stands in for the medium term or long term savings plan for the policy holder

·         You could use it to save for a particular project or business you have in mind after retiring from the present job or career one is currently holding on to

·         It could act as a financial will or financial legacy to the holder’s family as the compensation package would be in bulk and quite substantial enough to ensure the holder’s dependents do not lack financial support

This plan can help you buy that landed property you’ve always wanted to buy. Have you bought the landed property before now? Congratulations…but remember you need money to build it. What of those that already have the cars and the homes? Are you married or about to? This plan is for you. Quality education in Nigeria is no beans! Quality education costs more than peanuts, forget government’s plans of remodeling public schools; you wouldn’t want your children there. I don’t see how one could give his children quality education without money. For this reason, you have to save.

There no dream or idea you cannot pursue if you have money. The only way out of the financial logjam is to plan and follow up a savings plan with a reputable and solid company in the hands and care of a reliable person. My name is Ogungbemi Olumide, my numbers 07033588160 and 07056989820, and I’m an insurance marketer and blogger with Standard Alliance Life Assurance Limited.

Think of what it’ll cost you before you reach for that snooze button…

If you’re a late sleeper like me, you cannot afford to live without the alarm clock or the one on your phone. I set mine to go off 5.30am every day. Unfortunately, weekend mornings are included in my alarm schedule, so Saturday and Sunday mornings I reach for the snooze button to catch some extra sleep. It works beautifully and blissfully…most times. What I failed to realize, however, was the snooze button would cause me to attend church late most Sunday mornings (Lord forgive me for I know not what I do.)

I’m sure I’m not the only one abusing the snooze button. I’m not the only one wanting to have extra sleep and not wanting to get to church or some other appointments late. Shame on us! Thank God for his little mercies. But here’s a heads-up…Real life as we know it may not be as kind as our heavenly father.

How many people are biting their fingers in regret over that financial decision they failed to take 15 years ago? There are many Lagosians out there that are lamenting not taking advantage of the advice that came their way years ago. Some many rhetorical statements like, “I’d have become my own landlord now had I taken that mortgage 12 years ago.” “I’d have saved enough money by now if I’ve taken that insurance policy that agent brought me back then.”

When financial advisors and insurance marketers prospect clients, we tell them the advantages of starting policies early, people sneer at us. Many give the usual objections,

“I’m just 3 years into my job, and I’ve more than 20 years to go, let me start later.” 

“I’ll start when I get married.”

 “I don’t have children yet, there’s nothing for me to cover or save for.” 

“Let me look at the documentation and get back to you later.” 

Yada, yada, yada…

All the excuses, all the objections are like pressing the snooze button. Asking for more time, sleeping on it, dozing on a financial matter…very much like that extra sleep. And very much like that extra sleep could cost you something big; postponing the start of those savings/investments could lead to a monumental failure.

Humans being what we are could be very indecisive some times. We would want to take time to scrutinize financial issues and decisions. There’s wisdom in that but when we take too much time it could cost us big. When I say big, I’m not even talking about dying, that’s beyond our control. I’m talking about missing out in big financial gains, deals or dividends.

Let me share the story of a friend that stayed too long on the financial snooze button. When South Africa won the hosting rights to the 2010 world cup in 2006, my friend who happens to be financially well-off, vowed to be part of the biggest soccer fiesta when it lands in Africa. He made his calculations for accommodation, traveling, feeding and souvenirs and the figure he came up with was 2 million naira (not unreachable to him as he told me.)  But unfortunately he missed out. Why? Because he had no financial plan to back his dream, spending 2million naira in one fell swoop (by his own estimates to have an unforgettable experience) was too much even for a guy of his caliber!

What my friend failed to realize was he could have raised his 2 million naira in 48 months. Breaking it down, he could have done it like this…

Projected travel expense savings plan
Target amount	Monthly premium	Weekly savings
2,000,0000	42,000	10,500

The whole thing went down to about 42,000 naira monthly and 10,500 naira savings weekly! For a big boy like my friend and many more people like him, that’s more than affordable! What makes it sweeter is the fact that he could start this savings plan and earn a handsome profit in the process when other benefits still exist such as

• ·         Compound interest rate that no bank here can match
• ·         The ability to raise funds on a regular basis
• ·         Tax rebate and others are added to the mix

 All these and more just for saving some money. The next soccer fiesta is in Brazil in 2014 and I hope he’s not pressing the snooze button again.

At one point or the other, we’re all guilty of pressing the snooze button, what’s important, however, is not getting our fingers burnt in the process. That indecision that extra time could lead to a big difference much later in life. For my good friend pressing the snooze button means missing the world cup (thank God, that’s not so huge, for some it’s like waking up late on a Saturday morning with nowhere or pressing matters to go to.) For some other poor unfortunate soul, pressing the button mean be delaying on future mortgage or building plans, sending your son or daughter abroad for further studies, starting your own or expanding your business.

To delay could be dangerous, if not outright financially deadly. Professional and reliable financial advice is available out there. For a little cost/premium, you could leave your financial worries at the doorstep of companies like S.A Life. It’s our job to carry that load. It’s all in your hands, I just hope you won’t reach for that snooze button when next you’re taking that financial decision. My name is Olumide Ogungbemi, my numbers 07033588160 and 07056989820, and I’m an insurance marketer with Standard Alliance Life Assurance Limited.