How comfortable you live after retirement is solely dependent on you, not your employer or the government. Will you be able to maintain your standard of living, or you’ll rely on your children and other family members for support after your working years?
Parents use to say they are taking care of us so we will grow and take care of them, however, with the adoption of the nuclear family system, you need to be financially independent after you retire. Children are not retirement plans.
Start Planning Early
The best time to start saving towards retirement is today! You do not have to wait until few years to retire before you start planning towards it; it might overwhelm you.
Include retirement savings in your monthly budget; start with small amounts now, so your savings can grow over time. Increase your savings as your income increases. An advantage of starting earlier is that your savings will be compounded.
Albert Einstein once said compound interest is the eighth wonder of the world. Compound interest is simply the interest you earn on both your principal and interest. If you save GHs 1,000 with a 10% interest after a year, you will get GHs 100 in interest. Compound interest is the interest you will earn on the total of your principal and interest, i.e., the GHs 1,100. So, in the second year, your 10% interest will be calculated on GHs 1,100.
How much do you need to retire comfortably?
The benchmark for retiring comfortably is that you need to save 1x your current salary by the time you’re 35 years, 3x your current salary by the time you’re age 45, and 5x your current salary by the time you’re 55years. And by the time you retire, you should have saved 8x your ending salary.
Social security or occupational pension schemes might not be enough to maintain your standard of living when you retire. You can walk into any insurance or pensions trust company to sign up for a retirement savings plan.
Don’t simply retire from something; have something to retire to – Harry Emerson Fosdick
Thanks for reading
A good blog you have here. Very useful reminder. Another post on where to put money would helpful too. By the way I followed from Jacob’s Whatsapp status.
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Thanks for the feedback, Kwesi.
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Very educating. Do give us more details on the ideal specific amount to invest and the some of the insurance packages we can invest in. Thank you Wusufor.
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Thanks Wusufor! Very insightful read! Bless you!
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I love this- I’m so passionate about early retirement and investing. I wish to see many Ghanaians of our generation adopt this principle. We should all strive for early retirement by saving and investing often.
Bless you!
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Keep it up big sis
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I’ld love it if you can educate us on some of the good insurance companies in Ghana that one can trust with savings when it comes to pension.
Nice write up Wusufor.
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Thanks for the education on planning for retirement. I’ll be glad if on your next post, you throw more light on the amount you need to retire on comfortably. If I am earning 5,000 as ending salary before retirement, it means I should have saved 40,000 right?
But will that sustain me for a while when I am no longer receiving salary?
Also, I you can give more examples of packages available for retirement planning. You mentioned the insurance companies, but it will be educating for your readers if you could mention or explain some of these packages maybe without mention the name of any bank or insurance institution.
Thanks for your good work Wusufor
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Duly noted. I’ll do that. Thanks, Jacob!
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