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The Importance Of Having A Pension Plan For Life After Service

The Importance Of Having A Pension Plan For Life After Service

For everyone who once had a career, it is very likely that some look back and wish they did things differently, while others are glad they made some good choices about their future while in active service.

A lot of people look forward to the future with so much optimism, however, experiencing one’s dream future requires planning.

Once our career gets underway and we begin to receive a paycheck, it is vital to have a plan for your retirement, because, at some point in our lives we will no longer be able to work as youthful as we once did.

Having a pension plan is a great way to prepare yourself for retirement. And the good thing about pension is it does not hurt your income.

A Pension plan/scheme is a transfer program that stands as a channel for the redistribution of income after service years to retirees and the elderly. Pension is either paid by the government or private companies/organizations to their retirees as a form of social security against old age risks and uncertainties.

In economically advanced countries, pensions are extended further to other categories of people apart from retirees, these people include widows, orphans, the disabled (disability pensions) and the elderly/aged.

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What do you stand to gain?

Pension plans promote a saving culture among current employees and this stimulates savings.

Pension makes up for some loss/reduction of income since the individual is no longer active at work and don’t earn as much since retirement.

Pension plans give protection in form of lump sums to dependents in event of the death of its members. Pension is known to be savings with tax relief so one has to worry not about tax being deducted when it’s time to get his or her money when the time comes.

If you are lucky enough, your employer will match your pension contributions each month up to a certain level. So, this means you may be able to double the amount of money going into your pension each month, and ultimately, you’ll have an even bigger pension pot to enjoy at the end of it.

Pension gives an assurance of a guaranteed income at the end of each month. Once you reach to retirement ag, you can choose to buy an annuity, which will provide you with a regular income. Annuities can be adapted to provide an income that is fixed, increases in line with inflation or rises by a fixed percentage. Having all these benefits in mind, one could be sure of a good life after retirement.

To find out more on how to explore the benefits of pension, register for the upcoming BizWatch Nigeria webinar, the webinar is themed, “Reimagining Retirement for a Secured Future“, click on the link to learn more.

About Author

Victor Okeh is a graduate of Economics from Lagos State University. He is versatile in reporting business and economy, politics and finance, and entrepreneurship articles. He can be reached via – [email protected]

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