Sigma Pensions Limited, has urged Nigerian youths to plan towards saving for their retirement early so as to achieve financial independence.
The managing director/CEO, Sigma Pensions, Dave Uduanu, gave the advice while addressing youths at a masters class session organised by Sigma Pensions at the Junior achievers conference recently held in Lagos
Uduanu while educating the participants on the relevance of saving ahead of retirement, he also challenged them to be disciplined in spending prior to being working adults.
He said, “By starting pension saving immediately you start working, you are on your way to financial Independence. You can start early, how much you save depends on you. The trick is that, from studies, if you save 20 to 30 percent of your income since the day you start working, you are on your way to financial independence.”
He added that as they become salary earners, they should work towards increasing their savings percentage.
“Now as your income increases, the rate of increase in consumption should be lower than the rate of increase in income, meaning that, your savings rate should go up. So if your income is increasing by 50 percent a year, but your consumption is increasing by only seven percent a year, it means that your savings rate must go up.”
“If you start pension savings at age 25, and by the time you are 60 years, depending on the quality of your savings, and when you leave it in an account and it compounds at 15 percent a year, it is going to worth a lot but the trick is you need to start early”, he noted.