Hilda, class President of the College graduating class of 1994, has been saddled with the responsibility of addressing the class meeting on any topical issue of her choice. Having wrestled with her choices, she settles for a discussion on RETIREMENT given that most of her audience are in their fifties and would be close to retirement from employment or active service. A summary of her presentation is encapsulated below:

“WHAT IS RETIREMENT? The Oxford Languages defines retirement as “the action or fact of leaving one’s job and ceasing to work “among other definitions. This is the most relevant to our discussion. I would however revise the definition as follows: Voluntary cessation of active involvement in any employment for which some fiduciary reward acted as an incentive.  You may however retire from a job but take on another or be involved in a not-so-active state (semi-retirement).

WHY SHOULD WE RETIRE? I believe there are 3 key reasons for retirement.

1. To enable the body much-needed rest as we age and slow down our pace in line with our body mechanism. With the advancement in age, the effect of stress can be daunting.
2. To allow us time to do the things we would love to do but which had been hitherto constrained by our busy lifestyle.
3. To allow for younger talent to grow and mature. Development of the ”generation next”.

CAN YOU PREPARE FOR RETIREMENT? It is important to prepare for retirement because it often involves a paradigm shift from erstwhile activities and lifestyles. Whether retirement is voluntary (usually early retirement) or statutory (attaining a stipulated age or number of years in service), there is a need to prepare as retirement rarely comes as a surprise, unless in the event of an accident, redundancy, or debilitating illness.

WHEN DO YOU START THE PREPARATION? The usual advice is to start preparing for retirement immediately after you start your first job. Even though this usually looks unachievable, it is possible even as you commence multiple streams of income and start investments that can help cushion the loss of income that is associated with retirement. As a young person, you can start with savings and Insurance policies that enable you to put away monthly sums. The truth is that it is never too early to start building up your financial security. Conversely, it is never too late to start, provided it is before you actually retire. Often, the lack of preparation or inadequate preparation for retirement leads to taking on another job later in life when you should be enjoying the benefits of retirement. As retirement beckons, there is a natural fear of the unknown but that fear can be cushioned where one is adequately prepared.

WHAT ARE THE AREAS OF CONCERN? There are three principal areas of concern and these fears border on:

1. Boredom – What will keep one occupied both mentally and physically when work stops/ends. How do you handle the “empty nest syndrome.” What do you do for company and companionship, especially where you have lost a spouse either through death or divorce?
2. Health Challenges – These usually set in with the aging process. Where do you get relevant care and help and at what cost? With age, the cost of maintaining good health rises. Will you need a caregiver or is a hospice an option?
3. Finances – How do you maintain a responsible and comfortable lifestyle with the loss of regular income? Can you maintain your erstwhile standard of living?

HOW CAN THESE FEARS BE ADDRESSED?

Boredom: Take retirement as the time to do the things you always wanted to do but which had taken the back burner as a result of work. Pursue your hobbies and interests e.g. traveling, knitting, volunteer work, etc. If it brings in a little income, it is a plus. Use the time also to tidy your affairs e.g. legal documentation for your investments – stock, property, investments, etc. Remarry for companionship, spend more time with the grandchildren, foster a child, etc.

Health Challenges: Sign up for Medical Insurance through the Health Maintenance Organisations (HMOs) which are private companies that provide Health Insurance on payment of an annual premium. As in all insurance, this entitles you to medical cover as contained in your policy. This insures you against serious ailments and illness whereby the HMO bears the cost provided your premium is fully paid and up to date. Although there is a National Health Insurance Scheme in Nigeria it is largely ineffective. However, more recently Lagos State commenced a Lagos State Health Scheme (LSHS) towards affordable health coverage for Lagos State residents.

Finances: Over the years, a diversified investment portfolio comprising any or a combination of the following is important – Rental income, Equity, Money market Instruments, Commodities,  foreign investment, and most recently cryptocurrencies. Where in doubt, employ the services of a Financial Adviser/Consultant.

Usually, when you retire from a structured work environment, you are entitled to end-of-service benefits whereby you can opt for pension or annuity payment through an insurance firm. The pros and cons of each option must be carefully weighed in determining your preference. Kindly discuss this with your PFA (Pension Fund Administrator).

Retirement should signify your best years ever but this can only be so if adequate preparation is made for this period of one’s life.

Thank you for listening.”

Love

Havilah