One thing is for sure, life is never easy. No matter what kind of journey you have, chances are it was never a simple one. It doesn’t matter if you were rich or happily married; there is always something to worry about. Perhaps the biggest challenge of most people’s lives is their careers. You work for years on end, hoping to achieve your goals and grow as a professional, and it is one wild ride. If you happen to be one of the fortunate ones who do achieve some form of success, and you’re nearing retirement age, perhaps it is time to consider retirement plans. But where do you go? Nigeria is a great country for those golden years.
Here’s what you need to know about retirement plans in Nigeria.
Pension
Pretty much each and every person working in Nigeria have a part of their monthly salary deducted for pension plans. Those deductions from your payslips go to an investment fund that both you and your employers contribute to. In Nigeria, by law, the minimum payment by the employee is 8% and the employer pays 10%. That money adds up over the years, and when you do retire, you are eligible to start withdrawing money from that fund for the rest of your life. Some companies even decide to cover both their percentage and that of the employer, which, while generous, is not very common. This pension plan is mandatory for almost any company in Nigeria. All public sector companies are obligated to create this plan for their employees, while private sector companies need to have over 15 workers for this to be mandatory.
Individual retirement accounts
What if you are not working in Nigeria but would like to retire there? Well, in that case, you will need to work on a separate plan for your retirement in case your pension is not enough. As you can see on irainvesting.com, this usually means creating an individual retirement account (IRA). This is basically a way for you to ensure your future after retirement by creating your own pension plan with certain financial institutions. The great thing about IRA is the fact that it allows you to get a lot of tax benefits, but perhaps the biggest benefit to using one is how it allows you to leverage different investment vehicles. Some people invest in gold for their IRA, while others invest in silver, for example. This diversity gives you options and helps you ensure a more secure future after your retirement.
Money Market
Maybe you don’t want to save money in pension accounts or IRAs. Well, there are other options you could explore, like the money market, which is a virtual trading platform. In it, investors borrow and lend money over short periods of time, and you have an unconditional right to receive fixed payments on specific dates. Think of money market securities as IOUs that you could get from governments or financial institutions, and they are very safe and reliable. The most notable example is government issued treasury bills. What makes this a great post-retirement investment? Well, as we mentioned, it’s secure, and there are free securities that you could invest in like the treasury bills and federal government bonds. Perhaps the best feature of the money market is how it is safe from the volatility you will encounter in the Nigerian stock market –– or any stock market for that matter.
Real estate market
Retirement or not, real estate remains a great market to invest money in for a variety of reasons. You could invest in land, buildings, houses, and any other property really. It is one of the safest forms of investment, because people never stop buying or needing land and properties. You can use it a source of fixed income if you bought an apartment and leased it, or you can get into flipping houses, which is when you buy a property, make some improvements, and sell it for a profit. There are countless options when it comes to real estates, and if you invest in this market, chances are, you can make a lot of money for your retirement if you do all the right things.
Retirement should be a time when you don’t have to worry about anything, least of all money. You work all your life for some stability and security, and you deserve it after all that time. The most crucial thing, though, is to start exploring your options early on. There are different retirement plans in Nigeria, and you need to do a little research until you find one that works best for you.