Now that we’ve looked at what retirement planning is and the benefits of retirement planning, it is pertinent that we explore some guidelines for successfully planning your retirement at different stages of your life.

Young Adulthood (21-35 years old)

If you fall into this age bracket, you have sufficient time to let your investments mature which is an important and valuable factor in retirement planning. The reason for this is that you enjoy the benefits of compound interest which allow your retirement savings to earn interest and that interest to earn even more interest. This means that the more time your retirement savings stays before you retire, the more interest you will earn.

If for instance, you make additional voluntary contributions of N20,000 monthly in your retirement savings to match what your employer contributes, it will be worth three times more if you invest it at age 25 than if you wait to start investing at age 45 – that’s the beauty of compounding.

Early midlife (36-50 years old)

At this time in your life, even though you may have some number of financial responsibilities to bear, chances are you may have climbed a bit higher up the career ladder with some extra income as well, hence it is critical that you continue saving at this stage of retirement planning. The combination of earning more and the time you still have to invest and enjoy compound interest makes these years some of the best for aggressive savings.

Consider bumping up your additional voluntary contributions now as well to ensure that you have enough to fund the lifestyle you desire when you retire.

Later midlife (50-65 years old)

While time is running out to save for most people at this stage of retirement planning, the possibility of receiving higher wages due to career climb and having paid off some weighing debts can provide more disposable income to invest.

This is also the time to be frugal with expenses if you haven’t saved a lot for retirement or create periodic budgets to manage all that you’ve accumulated to ensure that you don’t outlive your money.

Whatever stage you are now in the retirement planning life cycle, you can speak to us about your retirement concerns via info@armpension.com or 0700 CALL ARM.