Preparing to retire well – Many Ghanaians don’t plan properly for retirement

HPA/Livewell (a dietician, Registered Clinic in Poughkeepsie, New York) states that when anticipating retirement, most people focus on being financially prepared, but tend to neglect the importance of preparing mentally for retirement.

Retiring well means preparing in advance by visualizing your life, and reviewing your finances to ensure your future and other related income sources will allow you to enjoy the lifestyle you want.

It comes with a host of other considerations such as when to retire, where to retire, and how to spend one’s time during retirement. While finances are certainly important, having enough money does not guarantee a happy and healthy life after retirement.

Retirement is a major life event that brings many changes. Hence, I advise all stakeholders to come on board to ensure all individuals within this range are safely and deliberately journeyed towards a well-prepared retirement.

Retirement may sometimes feel as if travelling to a foreign country where you don’t know the language, customs, people, etc. However, Human Resource Officers, Talent Outsourcing professionals have lessened these burdens by ensuring a smooth transition into retirement life.

I recommend retirement planning must be included in the employee’s orientation program and again run for staff when closing in on retirement. This is done with a positive spirit to help remind employees who fail or delay in planning their retirement to do so immediately.

In most countries, the retirement age is between sixty-two (62) to about sixty-five (65) years. There are a handful of countries that plan for workers to leave the workforce even earlier. The United Arab Emirates (UAE) boasts the lowest official retirement age at forty-nine (49) years old, though the age is sixty (60) years for ex-pats (non-UAE nationals).

The statistics are horrible in Ghana because Ghanaians earn low salaries. Dr. Ofori-Tenkorang revealed in the business edition of the PM Express, that 25% of Ghanaian workers who contribute to the Social Security and National Insurance Trust (SSNIT) make as little as GHS400 Ghana cedis or less every month.

Again, more than 53% of all pensioners on the SSNIT payroll currently receive less than GHS1,000 per month, according to the Director of Planning, Research, Monitoring and Evaluation at the National Pension Regulatory Authority (NPRA). If you are not alarmed by these findings, I doubt what could move you!

Let’s be deliberate about retirement planning and the life we want to live after we retire. It is important you start by first analyzing the position you stand when it comes to your finances because your finances will support your health and other social activities you wish to engage in. Finance is important and critical in this journey but is not as critical as your health and social life.

Socially, is that time of your life you wish to spend with family, friends, and loved ones, encouraging, and making an impact. Health issues can collapse your entire dreams and bank account if you don’t deliberately plan a good healthy life before retirement. I have seen one before.

I use my own biological father as a model. He had to retire compulsorily due to persistent health challenges. He retired five (5) years into his retirement and guess what? I watched my father’s savings account deplete gradually as we kept visiting hospitals, seeking good health. Look, you don’t have to be warned! It can be a devastating moment and full of regrets if there are no backup plans.

According to the Forbes Health Advisory Board, research shows a connection between the early stages of retirement and cognitive decline, and numerous studies indicate that retirement can worsen a lot of mental health challenges, including anxiety and depression. However, creative hobbies and other interesting activities can accomplish the opposite effect, reducing the risk of dementia as they help. keep your mind sharp.

In fact, according to a June 2022 Forbes Health survey of more than 1,000 recent retirees conducted by OnePoll, 32% of respondents said they wished they had kept working longer in their careers. Another 32% admitted they didn’t feel well prepared for the day-to-day realities of retirement. Without a job or career to focus on, and without a daily routine or scheduled events, mental health issues are near! Being flexible and willing to try new activities or adventures can be very beneficial.

Practical ways to stay active after retirement include talking to someone, staying social, getting plenty of sleep, good nutritional balance, and exercising, giving back to society/community, etc. Choose the best retirement plan, to earn attractive returns on your savings. Create a sizeable amount as an emergency fund for all your short to medium-term needs.

Due to the current economic challenges and downturns, individuals are forced to plan for short-term financial goals, enjoying life and improving their standard of living while believing that their SSNIT, provident fund contribution, and benefits would be adequate to meet their retirement expenses.

This may not be entirely true as you may need an additional independent plan or retirement fund to offset the expenses. A retired news anchor, Charles Ampofo, has revealed he took home less than GHS20,000 as a service benefit after he served for 32 years with the Ghana Broadcasting Corporation (GBC).

What should you do?

Knowing your retirement age is critical. Identifying the life expectancy of your family is needed. For example, if you retire at sixty (60) years and expect to live up to eighty (80) years, you need an amount of money that would last 20 years. Review your average monthly expense and don’t forget to factor in inflation while calculating the expected expenses needed when you retire. Ascertain the amount of money needed. Save and invest in ventures that will generate enough funds to meet your lifestyle after retirement.

What should you avoid?

Not deciding what kind of lifestyle, you want after retirement, saving too little, too late, not planning sufficiently for economic ups and downs, not getting sufficient health coverage, and not diversifying your financial portfolio as you near retirement. For example, when a client is over sixty (60) years old, risk must be limited to conservative financial instruments such as money market instruments.

Recommendation

You need money to meet your expenses. To have enough, you need to deliberately cut down on expenses, save and invest over a period. Remember, starting early gives you leverage over time.

A smart retirement plan will go a long way in ensuring a happy and stress-free retirement for you and your family, so get started right away.

Thank you for reading, I would love to hear from you!

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