Retirement planning has become a key area of concern as many workplaces typically have one or more people retiring every year in Uganda today. Retirement is a good thing, according to Patrick Ngolobe, a human resource consultant at Africa Executive Leadership Solutions, and whoever joins the workforce should have it in mind that there will be a time when they will retire.
Retirement may be involuntary due to company or government policy or because of impairment. Or it could be voluntary when one feels ready enough to stop working. He reckons that not so many employees are able to do this because only few ever plan early enough.
“Many people are actually forced into their retirement and they start panicking at the time they get a reminder that they are retiring soon. They start seeing it as an uncertainty that has befallen them. At this point, they start making investments they should have made a long time ago,” he says.
Both at organisational and individual level, one should have a retirement plan as soon as they start working.
“This is the time to face all the risks in investment such that by the time you retire, you know how to handle the pressure involved in the investment of a particular product or service,” Ngolobe says.
Have a plan
According to Julia Kushemererwa, a human resource consultant at Success Africa, not having a wholesome retirement plan that involves your mental, physical, financial and spiritual aspects of life is one of the biggest mistakes one can make in their lives.
She says, “When one does not have a clear retirement plan then they only wait to receive whatever agenda comes to them. On the other hand, I have met old people managing recreational facilities, businesses and agricultural farms because they planned so. In fact some of them have not retired at all.”
No one wants to be miserable after their retirement but it happens often. This is the reason you need to start saving early. If you start working at 25 for instance, ensure that you tirelessly work all through the 35 years so that by the time you retire, you have assurance that you will be transitioning into a less tiring life.
Kushemererwa says, “There are various retirement saving schemes in Uganda like the National social Security Fund (NSSF) and other investment plans that you can ascribe to. The longer you save the more money you are likely to accumulate. In order to achieve this, you will need to cut on your daily expenses and have at least 15 percent of your income as savings.”
If possible, try to find an extra job for additional income. Unless you are sick or unable to find work, do not stop working until you reach your retirement age to help you maximise social security benefits.
Saving alone may not be enough since social security savings attract only 10 per cent per year. It is, therefore, important that you invest in products and services that bring both short and long term cash, according to Ngolobe. Investing in things such as land and rentals, agroforestry, agriculture, money markets and government bonds are perfect investment ideas.
Ngolobe discourages people from making unwise investments at the time they are retiring. It is very risky to turn your savings into risky investments such as bitcoins. This is because they promise a high rate of return yet they are volatile and often lead to big losses.
Start your family early
One of the worst retirement mistakes people make is first concentrating on career while neglecting their family life.
“This is why you see people having very young children after 50 years. This is not time for buying diapers. You will have to work harder even after your retirement to sustain these children. Much as you can have older children at the time of retirement, they may not be a burden like the young ones, especially if you taught them hands-on skills,” he remarks.
Mind your health
Invest in your health at an early age. If you want to be healthy and avoid using all your retirement benefits on your health care, start early. Drinking alcohol, smoking, poor feeding and a sedentary lifestyle will affect your health in the long run.
“You therefore must start living a healthy lifestyle now or have an insurance security for your health. You cannot be sure that your children will take care of you. Have a marital partner and also make networks now, find friends that you will age with,” he says.
Life is not all about receiving but also giving. As you plan to retire, it is important to think about what you will be giving back to the community where you will be spending your retirement years.
You can think about starting a mentoring programme where you pass on your skills to the young generation or start a charity you are passionate about, which will make you feel useful in life.
Kushemererwa remarks that, “Some people retire to contribute meaningfully to their communities while others retire into a slow unfruitful life. Planning cannot be underestimated and should never be disregarded.”