By Francis Ewherido
As some people clock 50 years, they begin to stare at retirement with anxiety. Many people put in 30 to 40 years before retirement. During these years of active service, some acquire reasonable assets and wealth to retire on. But it is not so for some; turning 50 becomes nightmarish because they realize they are getting to the end of their working life with little or nothing to fall back on in retirement.
This is more common with many small business owners and self-employed people.
They have no pension or gratuity; maybe a personal house, another house that brings a little rent, a business with outdated equipment that can only be sold for very little and some money in the bank: These are all they have as retirement beckons.
Some have a lot less to retire on. Some people go into a state of panic, while others easily develop high blood pressure.
But there is nothing to panic about; you can begin anew. The next decade (from 50 years to 60 years) is very crucial for you, so makes very good use of it. You still have the strength to run around and your contemporaries are still in positions of authority and can be of help.
Also, you ought to have acquired experience and wisdom, which should give you some leverage; not to talk of the many natural gifts buried inside you waiting to be exhumed and put to good use. In addition, your trailer-load of mistakes over the years should become a springboard for a new life with fewer errors.
At 50, if you are not yet rich in physical assets, you should, at least, be rich in intellectual assets. To be deficient on both fronts does not speak well of your past. But not to worry, it only means you have more work to do within the next decade.
At 50 or more, you should be better focused: you are looking for resources to see your children through school and prepare for your retirement. This is no time for foolish pride; remember you are doing (preparing for retirement) what your contemporaries did 10 to 20 years earlier. Doors would be slammed on you, you will answer “sir” to people who were still in diapers when you left school, you will be called an irritant old man (can you imagine?); it does not matter.
You have bills to pay and a retirement to provide for; these are all that matter. Remain focused. While others are wailing over the recession, get busy thinking and taking advantage of the opportunities recession offers. People sent us into the recession; people will bring us out of the recession. Join the latter group, even if in your little corner. There is a lorry-load of literature on recession. Bury yourself in it and fashion a way forward. Anyway, unlike younger people, you do not have the luxury of time for lamentations.
Within this decade, if you have not taken lessons on diversification seriously before, this is the time to do so. Your experience and exposure should guide you in your diversification efforts. You must diversify your sources of income now and during retirement. Nigeria is too volatile and uncertain to rely on one source of income. It is a climb uphill, but you have no choice (Ok, you have a choice: retirement into uncertainty.) Hopefully, your experience and network over the years will make the climb less cumbersome.
In this uphill climb, you have to do one of the things you failed to do when you started your working life: delayed gratification, in other words, making sacrifice now for a better tomorrow: your retirement. You are like an over laden ship that is about to sink; lighten the ship by throwing overboard unwanted or nonessential cargo. You need to deny yourself a lot wants and luxuries so that you can keep something reasonable aside for your retirement.
You just concentrate on the basics: food, shelter, clothing and others like children’s school fees. The clothing bit should be strictly what you need, while the children’s schools should be good enough and the fees affordable on the long run and in the worst case scenario. Expensive schools do not necessarily mean better schools; do your research.
In 1990 or thereabout, a life insurance agent came to sell a life insurance policy to me. I was in my mid-20s with a salary of N700 monthly (N8,400 per annum.) I looked at him and asked: “You want me to secure my future, when I have not secured the present.” I had a long laugh and dismissed him.
If I had this exposure then, I would have taken the policy. Even if I had committed N50 to N100 for premium monthly, I would still have been comfortable. I later took up a life policy when the scales fell off my eyes. If you are in your 50s and you have not, take up a life policy.
Talk to an insurance expert; choose a sum assured which when broken down will leave you with a monthly or quarterly premium that you can pay periodically over time. On maturity, your life policy can provide you a lump sum (N10m, N30m, N50m), something reasonable for your retirement.
The other side of the coin—good news or bad news, depending on how you view death—is if you die before the maturity of the policy, the sum assured will be paid to your next of kin. In other words, if your sum assured is N50m, but you contributed only N500,000 before you died, what your next of kin gets is the N50m sum assured.
With that kind of money, your family is assured of some financial comfort in your absence. Some people argue that return on life policies is far lower than the inflationary rate. That may be true, but if you did not pay this money as premium, you will still spend it on other things one way or the way. Which is better, having a lump sum at the end of the day, though with less value due to inflation or having nothing?
To be continued under a different topic.