Retire in Style: A Nigerian's Guide to Golden Years

In many parts of the world, the government provides a safety net for seniors. In Nigeria, while we are making progress, the reality is that you are your own government. Relying solely on children is not a financial plan—it's a gamble, and often an unfair burden on the next generation. To retire in style, you must be intentional, starting today.

The Pension Reform Act 2014 mandated the Contributory Pension Scheme (CPS).

How it works: You contribute 8% of your monthly emoluments, and your employer contributes 10%. This money goes into your RSA, managed by a Pension Fund Administrator (PFA) like Stanbic IBTC Pension, ARM Pension, or Oak Pensions.

Key Tip: Ensure you have your recapture done and your NIN is linked. Without this, accessing your funds later will be a nightmare.

The statutory 18% is rarely enough. You can make Voluntary Contributions to your RSA. This is tax-deductible! If you save an extra ₦20,000 monthly as VC, it lowers your tax burden today and grows tax-free for tomorrow.

In our culture, supporting extended family is a norm. However, "Black Tax" can drain your retirement fund if unchecked.

The Strategy:

• Budget for it: Have a specific "Family Support" line item in your budget. Once it's exhausted for the month, the answer is "No".
• Empower, Don't just Give: Instead of sending fish, teach them to fish. Funding a sibling's skill acquisition is better than sending monthly upkeep forever.

Your PFA invests mostly in bonds, which are safe but might trail high inflation. To survive cost-of-living increases in 20, 30 years:

• Diversify outside your RSA: Invest in assets that appreciate, like Real Estate (Land Banking) or Dollar-denominated assets (Eurobonds, US Stocks).
• Start a Side Business: A low-stress business (consulting, rental property) keeps cash flow active even after you stop 9-5 work.

As we age, health costs rise. HMOs for seniors are expensive but necessary.

Action: Look into "Retiree HMO plans" early. Also, maintaining a healthy lifestyle now (diet, exercise) is the cheapest health insurance you can buy.

It is a taboo to talk about death, but it is foolish to ignore it. If you pass away without a Will (Intestate), your family might suffer years of legal battles to access your RSA or property.

Next of Kin != Beneficiary: In your RSA, your "Next of Kin" is just a contact person. You MUST explicitly state who inherits your money in a Will or the PFA's beneficiary form.

1. Check your RSA Balance today. Is it growing?
2. Increase your VC. Even ₦5,000 extra makes a difference.
3. Write a Will. Simple online services like iWill or a lawyer can help.
4. Visualize your retirement. Do you want to travel? Farm? Relax? Your goal determines your price tag.