RETIREMENT TIPS

by Amos Gagar

8. Address the effect of inflation. Inflation erodes your purchasing power over time. Your investment philosophy should be designed in such a way that your retirement funds keep pace with increasing costs as much as

We know that the day of disengagement from active work life will come someday and should not take us by surprise. Our situation might be different, some are in paid employment while others are self-employed. Whatever situation we find ourselves in, we should intentionally plan for our retirement.

As I plan for a second retirement at the end of September 2023, though not tired, I would like to share some tips for those who have retired or are retiring soon. I have practiced these principles over the years, and though not exhaustive, they have significantly helped me.

1. Deliberate savings for retirement. Buy annuity, pensions, other streams of income, etc. Gratuity might not be enough to sustain your current lifestyle. Build a robust portfolio of investments, this helps to manage and average out the upsides and downsides of different industry segments and jurisdictions.

2. Take care of medical. Take out medical insurance, health plans, etc. The expenses of one or two ailments without the succour of an insurance cover can wipe a significant portion of your savings.

3. Liquidity. Prioritise liquid assets over illiquid assets, prioritise operating expenditure over capital expenditure.

4. Avoid the ‘Big Bets’. The reward could be enticing especially if you feel the need to catch up on your savings. Mixing emotions with investing decisions is a potential recipe for heartache and regret.

Don’t fall for Ponzi schemes. If the reward or promise is outrageous, you need to look critically and seek professional advice before you leap.

5. Liquidate debts. Retirement is not the season to be servicing debts. Try to liquidate your debts as you move into retirement. It is not the time to experience foreclosure of your assets as a result of default. The trauma is not worth it.

6. Review your WILL/Estate. Be deliberate as to how your estate will be administered after your passage.

7. Lifestyle adjustments. Some adjustments might be required after retirement. Be engaged to stay alive and try a light business, academic, hobby, voluntary activities, outreaches, mentorship, etc.

9. Mismanaging retirement withYou need to manage your withdrawals in a prudent, tax savvy, and strategic manner. Striking a balance between being too conservative in your investments and risk having Inflation strip you of purchasing power or being too aggressive and you risk losing your money. Take too much out early in your retirement and you risk running out of money in your later years. Too stingy with your withdrawals and you might be cheating yourself out of enjoyable and memorable experiences.

10. Enjoy your family!