I bought a 20 year retirement savings plan for myself the year I turned 30 and chose the quarterly payment plan. This means I pay my premium on quarterly basis.
So, in 20 years time, I would have saved at least 20 million naira in this pension plan.
My plan is that once I turn 50, I will start to receive pension either monthly, quarterly, bi-annually or annually depending on how I decide I want my money paid and this payment will be for life. I also had my beneficiaries clearly listed, each with their own percentages.
I have my reasons for choosing a retirement savings plan as against buying some policies that accumulates huge cash overtime. As someone who is grounded in insurance and knows exactly what policies are best for what I want to achieve. There are other policies that comes with clauses that would leave the client losing half of their savings if they opt out before certain years or before maturity.
I bought a retirement savings because it would serve a purpose, and the purpose is to plan for my old age. It is for a future where I will continue to earn money from not just one source. It doesn’t even matter if I choose to retire early as money will never be a problem. The retirement savings plan allows me to opt out at anytime and still get whatever I have saved and the interest accrued.
What this means is that if need arises and I’m unable to continue with funding my retirement savings, I can ask that the policy be terminated and I will be paid back in full whatever I have saved in the policy plus interest.
With this N20,000,000 policy, I already know what I would be earning at age 50 with other benefits attached. And if I want a one off payment, I get my money given to me in bulk. I was paying my premium diligently. I treated the policy like it were a child. I denied myself a lot of luxury to see that I paid my quarterly premium. It wasn’t easy, but I want extra cash to take care of me at old age. I want to just work less as I get older.
But tragedy struck the year I turned 34 and I had only saved for three and half years. I had two other savings plans where I was saving to buy myself another car and was also saving for an end of the year vacation in any part of the world including Nigeria, though far from home. It was supposed to be my first Christmas holiday away from my family. I wanted something different from the usual traveling down, cooking all day, sleeping and having all of us around which is fun, but I wanted something different.
When tragedy struck, these investments came in handy. I wrote my insurance company to close down those three policies and pay me what was due to me at the time, it took them less than 14 working days to transfer all my money into my bank account. That money was not anything compared to what my family was dealing with but it solved a lot of problems.
When Covid-19 and its reality hit hard, some of my clients who bought policies many years ago came calling, they wanted their money. These were people who reluctantly invested after much persuasion. Some even bought policies because they felt they were helping me keep my job or earn me promotions at my work place. When their bank alerts dropped, some of them were between N5 to N20 million richer.
I don’t know why I’m telling you all this, but just take something away from this. While you are young and full of life, plan for your old age. I understand that times are hard and we are all struggling to break even. Life can throw you a curve ball when you least expect it.
Designer shoes, handbags, expensive wigs, vacations, checking into big hotels, doing give away etc without solid future plans can leave you at the mercy of life. If you hit a 5 million or 50 million naira deal today, don’t rush off to buy yourself a 4 million naira or 35 million naira Mercedes Benz or even go on partying every day. There is no return on investment when it comes to such cars or parties. You need to throw more than half of that money somewhere and allow it work for you.
No business man/woman will be strong to run their business forever. While your business is thriving, building/buying houses and renting them out is a good, it should be one of your pension plans and not your only pension plan. Buy yourself a retirement savings, you would realise later that some tenants will never pay their house rent as and when due and you may no longer be in-charge of your business because age has taken a toll on you and you are left at the mercy of whoever is in charge of your business financially.
Your insurance pension plan is what would likely keep funding whatever lifestyle you can afford and no man can hold you to ransom because this particular money comes into your bank account directly on monthly basis. Do not stop saving, no matter how little. Forget about saving in your bank account, we all know how easily we can access such savings.
Visit any reputable insurance company, read through terms and conditions. Ask a lot of questions, while at it, consult professionals if need be. That’s where you can save for whatever project and future plans you have. You have options of years and payment plan to help you reach your target. It is not too late to start as it is wise to safe guard your future.