The role of employers in facilitating retirement savings in Nigeria is crucial for ensuring the financial security of employees.
Planning for retirement is important for employees, regardless of their age. That’s where employee retirement benefits come in. Employers can help employees prepare for their retirement by choosing the right benefit plan and vendor and ensuring retirement options are both appealing and cost-effective.
Many businesses offer an employer-sponsored retirement plan to help employees save enough money for their golden years. Employer-sponsored retirement plans are common in the workplace.
Retirement generally refers to the duration of a person’s life after they have left the workforce. This means a person who has retired has withdrawn from any type of labour and generally engages in activities for leisure purposes. Usually, retirement begins when a person reaches a particular age. In Nigeria, this is 60 years old.
Retirement is a significant life milestone, and proper planning is essential to ensure a financially secure and enjoyable post-work life.
Crusader Sterling Pension stated that the Contributory Pension Scheme (CPS) is a pension plan in Nigeria where both employees and employers contribute a portion of the employee’s salary into a Retirement Savings Account (RSA). Employee contributes eight per cent of their monthly salary, while the employer contributes 10 per cent.
The organisation noted that “the Contributory Pension Scheme plays a crucial role in promoting financial security, retirement planning, and economic development. By encouraging individuals to save for their retirement and facilitating long-term investment, the scheme contributes to the well-being of retirees, the stability of the economy, and the overall welfare of society.”
The group executive chairman of Lancelot Group, Mr. Adebayo Adeleke, stated that retirement planning is crucial for securing your future in Nigeria, ensuring financial stability during your golden years.
He noted that as the cost of living continues to rise, it is essential to prepare early and save diligently, explaining that retirement planning allows individuals to maintain their current lifestyle even when they are no longer working.
“Without proper preparation, retired Nigerians may face financial hardships, struggling to cover basic needs and medical expenses. Nigerians often encounter various challenges during retirement, such as inadequate pensions, high inflation rates, and limited access to healthcare services,” he stated.
Benefits Of Retirement Planning
Planning early in life certainly has its advantages.
Financial Backup for Emergencies: When you are no longer working, the unpredictability of life can be frightening. Preparation for such situations is one of the crucial benefits of retirement planning.
Returns on Investment: Investing in a retirement plan instrument can help you save and grow your money over time. Depending on your financial profile, you must decide which investment tool is more suitable for you. The returns from such an investment will be better when you plan them at the right time.
Tax Benefits: Today, several financial instruments are available to create a sound retirement plan for employee.
Inflation: With time, the cost of living and value of money is going to evolve. Fortunately, the benefits of retirement planning include fighting inflation rates. As an investor, you must consider this while making investment decisions in the present to have enough for the future.
Source Of Income For Private Sector Employees With No Pension: If you are working in the private sector with no provision for pension, consider the benefits of retirement planning on your own.
Protection Of Assets And Property: Retirement may seem like many years down the line, but it may not be as far as ones think. If you wait several years before planning for retirement, you may not have enough time to do it well.
Retirement planning is a crucial step toward securing a financially stable future. By setting clear goals, calculating your retirement needs, creating a savings plan, diversifying your investments, and monitoring your progress, you can work towards a comfortable retirement. Remember, starting early and seeking professional guidance can significantly enhance your retirement plans.
