One of the reasons why people do not save enough or at all for their retirement is the lack of objectives for retirement savings. It has rightly and oftentimes been said that, if you do not know where you are going, any road will lead you there.
In the same way, if you do not know what you are saving for, you will think that any amount saved will be sufficient. Retirement savings objectives will definitely differ across people depending on their age, health, marital status, and the number and ages of their children among others.
Again, the objective may depend on one’s definition of retirement. While some have defined retirement as the time when they cease from working for others, other people have defined it as the day they cease from working at all.
Be that as it may, we have identified what you should consider your retirement savings objective with the hope that such objectives will energise you to maximise your retirement savings.
Maintaining a Pre-retirement Standard of Living
Maintaining your pre-retirement standard of living should be a retirement savings objective. You want to be able to eat the same type of food or belong to the same social club in retirement as you eat or belong to now that you are working. If you are a member of a rotary club, for example, with this objective in mind, you should save in such a way that you will continue your membership upon retirement without being unable to pay the required dues.
Maintaining Economic Self Sufficiency
Since you are not sure that your children would have the wherewithal to care for you on retirement given the current level of unemployment, remaining self-sufficient in retirement should be one of your objectives.
Unfortunately, Nigeria does not have geriatric government programs that retirees can depend upon to supplement their retirement savings. The more financially independent you hope to be in retirement, the more you would like to put aside today for tomorrow.
Though the typical retirement age in Nigeria is 60 or 35 years of service, retiring much earlier could be better because you tend to have more time for active engagements if you retire earlier. There is a common saying that early to bed early to rise, so if you want to retire early, then you should start saving early.
Again, early retirement implies an extended retirement period. To fund such an extension, you will need to accumulate more while you work and the only way to accomplish that is to start saving early and to save more each time.
Passing on Wealth to others
One objective of retirement savings is to be able to bequeath some wealth to others, be it your children, grandchildren, foundations or charities. If this is your objective, then you can only pass on what you leftover and to have a leftover, you will need to have some amount beyond what you may need in retirement.
To achieve this objective, you need to save more while you have the means. It calls for making extra sacrifices prior to retirement.
It is often said that those who fail to plan, plan to fail. That cannot be truer than in the area of retirement. To many, the realisation that they will someday retire from their correct job presents with dreadful feelings but with a well-planned objective driven retirement program, we can all pass through that stage with grace and happiness.