Lets talk - Questions & Answers

Question/Comment 

Good day madam,

I read your write up in Allure vanguard magazine and hope I am not out of place by asking the following questions-

•   Is it possible for someone over 45 years old to start saving or investing towards retirement?
•  Monthly income is 60,000 {sixty thousand naira}
•  3 dependents 

I will sincerely appreciate any feed back with an honest answer. I know in Nigeria if one does not earn above a certain amount of money saving seems futile.  But do you think people earning the above stated income or less have hope towards any meaningful sort of savings plan or investment which should encourage one not to try and meet up by thinking honest living is not worth it.

Is there hope? I know you must be extremely busy, but, sincerely your advice will encourage me and numerous hopefuls.

Response

Thank you very much for taking time out to write to Pocket Finance.

In my opinion it is not too late for a person over 45 years old to start saving or investing towards retirement. In most organizations the retirement age is considered to be 65 years old. Therefore this still gives the individual 20 years to save.

In terms of savings, most financial planners or advisers suggest saving at least 10-15% of your income. Furthermore, the National Pensions Commission stipulates employers contribute 7.5% of gross salary towards an employees pension whilst the employee also contributes 7.5%.  

In order to be conservative, assuming an individual does not have a pension’s scheme and is only able to set aside 15% of his or her income on a monthly basis towards retirement. Without including interest, in 20 years the individual would have saved N2.1 million. This amount would be higher if the individual considers the various investments options available such as a savings account, mutual fund, a retirement savings account etc.   

In conclusion, the individual should decide whether this amount would be sufficient to maintain the lifestyle the individual would want to live during retirement. If this won't be sufficient, then the individual should begin to explore alternative ways to increase his/her income which could include looking for a new job or considering business opportunities. 

Thank you once again for taking time out to write to Pocket Finance. I wish you all the best. Remember the sky is not the limit it is only the beginning.