Before the mid-90s employees held jobs until the official retirement age and some working extensions were possible. Those in the civil service worked under permanent and pensionable terms that ended on the attainment of 55 years of mandatory retirement age.
Words and phrases such as retrenchment, golden handshake, voluntary early retirement, right-sizing, downsizing and restructuring were unheard of.
Today, they are so common that employees work in constant fear. The unpredictable work environment has compelled employees to think of retirement as soon as they are hired. Here are some of the factors that one should focus on when planning for retirement.
While working full-time many employees are too busy to pause and think of the finances they shall require for a comfortable life in retirement. Others contend that NSSF contributions, institutional pensions and terminal lump sum payment will be adequate to meet retirement financial needs.
Neither do they imagine that the end of month salary tap will once be indefinitely closed leaving them without a regular source of income.
Experiences from retired people have shown that terminal payments are exhausted within a short period after retirement. Pension, if any, will not enable one to continue living at the same lifestyle as before. For employees to avoid financial embarrassments during retirement, they should begin saving adequately now.
The savings may be used to obtain SACCO loans for investing in income-generating assets or other profitable investment instruments.
Besides increasing contributions to employer-registered pension schemes, employees could also raise NSSF contributions to boost the retirement kitty. It becomes a question of postponing current consumption or foregoing present luxuries to save and invest to survive future dry spells of money.
Training on money management would be handy to acquire the necessary skills in personal financial planning. People need to understand their spending habits with a view to accumulating more savings than incurring unplanned expenditures. Self-discipline on money matters would be a key stepping stone towards financial independence.
During the working years, employees stay in staff, rented or owner-occupied houses. The first two types of residence sometimes put people in a comfort zone that is disadvantageous when retirement knocks the door. Cases have been reported of employees being evicted from staff quarters or rented house at the end of the employment period.
On planning for retirement, working people are expected to own retirement homes that would meet their needs and lifestyle.
One of the controversial issues on retirement matters is relocation to either the rural area or within town. Anyone intending to return to the rural area where they do not own a house will be forced to use their terminal money to construct one.
Moving to a cheaper residential area within town will be a temporal solution because of no regular source of income. Owning a house in whichever location will enable a fresh retiree to start his or her retirement on the right footing.
In recent years, more than ever before, full-time employees have resorted to starting and running side hustles to meet their financial needs. If the side hustle businesses survive beyond the entry stage, it would become a soft landing when employment is terminated for whatever reason. The working class is continually combining side hustles with full-time employment as a retirement planning strategy.
Although key components of a healthy lifestyle are better nutrition and regular physical exercises, it is a pity that many people ignore these living aspects. Forgetting the adage “you become what you eat”, they feed on unbalanced diets some of which cause medical conditions such as obesity.
They also find plausible excuses to avoid physical exercise to the detriment of body fitness. As one plans for retirement, it is advisable to develop and implement balanced-diet meal plans and undertake regular physical exercises.
The state of one’s family relationship plays a key role in determining how an individual manages life issues. Living in a stable family enables one to weather both internal and external storms of life. People whose families are unstable do not obtain the necessary family support system in times of need.
It is important to nurture good family relationships during employment time to facilitate future smooth transition into retirement. Poor family relationships now would be carried forward into making psycho-social adjustments in retirement a nightmare.
Friends and Community
Social well-being is a key factor in enhancing one’s interactions both at work and in the community. Friends that people make while working may be available to lean on at different times. Such friends would become a sounding board when grabbling with retirement issues some of which do not have ready resolutions.
Whichever community you live in, it is essential to actively participate in its collective socio-economic activities. Continual identification with community development matters would prepare one for future leadership roles. While executing the roles, one would not only be giving back to society but also become productively occupied in retirement.
Samson Osero is Human Resource Development Consultant and Author of ‘Transition into Retirement’. My personal email is: [email protected]