It might interest you know that a number of this demography who are employed in Micro, Small or Medium enterprises do not have any statutory pension contribution commitments from the organization, neither are they interested in the subject themselves. For some of them they are not aware, while others are either indifferent or uninterested. For others the allure of youthfulness makes them feel "invincible", like they would never get old, still for another group the huge belief in their future that "I go make am" spirit blurs the need for any form of pension planning. Of course for a hugely religious population, that does not help either, as there is so much faith that tomorrow would be better than today.
Even for the self employed Millennials and Gen Zs Pension planning is not a focus for them, neither is it for the freelancers including those that earn in hard currency. Not to mention the massive level of unemployment; realistically how would an unemployed person even think about pension planning?
But in the end one thing is constant: Time keeps on moving. And whether we acknowledge it or not, we all must get old some day, at least barring unforeseen demise. It is not a matter of if, but when. Imagine that you are 65 or 70 years old today, would you still be able to do your current job? Would you have the strength of mind and body to carry on the rigorous level of work that you do today? What if you have not attained the level of financial freedom that you planned or desired or wished for? How would you take care of yourself and your family at that age and beyond? So it is important to plan for that time when one would be retired, with strength diminishing with each passing year, rather than have that time meet you off guard or unprepared.
What is the way forward?
As long as you have a job or earning some money, whether you are an employee, self employed, freelancer, business owner, daily earner, informal sector player, etc, you should consider setting up a pension plan in which monthly contributions are made. Contributions to a pension plan can either be statutory (required by law) or voluntary (of your volition), or both.
For employees, if you are not sure about your Pension plan status you might want to check with your employer to know if it is part of your contract to have statutory monthly pension contributions made partly from your salary and from your employer's end. Just like tax, it is deductible at source before your salary gets to you. But for Micro, Small and Medium enterprises, a good number of employees under such employ might not have such benefits. If you check with your employer and it is not been done, then you might need to consider setting up one yourself wherein you make voluntary monthly contributions no matter how small. Search for Pension Fund Administrators (PFA) online and contact any good one of your choice to commence this process. It is easy. Once you are registered, you can start contributing an amount monthly, and consider increasing it as time goes on or as your pay gets higher. Do not withdraw from it for any reason. Remember, as we have said in our previous articles, if there is one thing that is very helpful in your personal finance journey, it would be systems. Setting up systems for any identified aspect would help you, as humans are creatures of habit.
The Pension Fund Administrators invest your money so that it compounds over time. You can actually view your account statement online and should receive monthly account statements for most of them. Some PFAs include Stanbic IBTC Pension, Access ARM Pension, etc. You can view them here.
For the Self employed, freelancers, business owners, etc, the process is similar to what we outlined above. Simply register with a Pension Fund Administrator, and choose how you want to set up your monthly contribution- statutory, voluntary, or both. Pension contribution should not be tax deductible, so you can consult your tax adviser on how best to handle your tax filing to reflect this. Ensure that you do not withdraw from your voluntary contribution no matter what happens. It is for your old age, so be guided and disciplined about it. Imagine if most of our Nigerian old Artists, Actors, Musicians, Footballers, etc, had set up Pension contributions in their prime when they were much younger, they would most likely not be in the pitiable situation that many of them have found themselves in their old age. Take learnings from them and plan NOW! Do not wait any further! The higher you earn the higher your contribution should be so that you can retire well at the right time.
Time keeps moving, and the only way not to be left behind is to move with it or ahead of it. In this case, be deliberate about Pension planning and planning your retirement in general. Planning your pension does not block out the chance occurrences or luck that you wish for. Before you invest in Ponzi schemes and betting, invest in your future, invest in your Pension plan. Do not let time overtake you, or be caught off-guard.
Happy investing! Feel free to share this article.
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