Planing for Retirement

[Olatunde Akanbi]

1. DO NOT RETIRE WITHOUT KNOWING YOUR FINANCIAL POSITION

One of the biggest mistakes you can make five years before retirement is assuming that your pension and gratuity will automatically be enough to sustain you.

While you are still working, your salary may cover food, transportation, school fees, electricity bills, and other family responsibilities. But when you retire, your regular income may reduce, and some benefits may take time to arrive.

You need to understand how much money you are likely to receive, what your monthly pension may be, how much debt you owe, and what your household expenses will look like after retirement.

Do not wait until your retirement date is approaching before asking these questions.
Start reviewing your pension records, expected benefits, savings, investments, and outstanding obligations now.

The goal is to enter retirement with a realistic financial plan rather than discovering too late that your expected income cannot cover your needs.

 

[Olatunde Akanbi]

2. DO NOT USE YOUR RETIREMENT MONEY TO IMPRESS PEOPLE

Some people spend years working hard, only to make poor financial decisions when their retirement benefits arrive.

They may buy expensive vehicles, organize lavish celebrations, give large amounts of money to relatives, or make unnecessary purchases because they suddenly have access to a substantial sum.

Unfortunately, retirement benefits are not ordinary money meant to be spent without a plan. For many retirees, that money must help support them for the rest of their lives.

You deserve to celebrate your years of service, but your celebration should not destroy your financial security.

Before spending any substantial amount, determine how much you need for emergencies, living expenses, healthcare, debt repayment, and long-term investments.

Do not allow the pressure to impress people to consume the money you spent decades working to earn.

 

[Olatunde Akanbi]

3. DO NOT ENTER RETIREMENT WITH UNCONTROLLED DEBTS

Imagine retiring after decades of service but still owing money on personal loans, cooperative loans, school fees, or other financial obligations.

Your pension arrives, but a significant portion immediately goes toward repayments. What remains may not be enough to support your household comfortably.

This is why the five years before retirement are an important period for reviewing and reducing your debts.

List everything you owe, including repayment terms, interest charges, and outstanding balances. Prioritize expensive debts while protecting the money you need for essential living expenses.

Avoid taking fresh loans for unnecessary purchases or speculative business ventures simply because retirement is approaching.

If you already have substantial debts, develop a realistic repayment strategy instead of trying to clear everything at once and leaving yourself without money for basic needs.

The objective is to reduce financial pressure so that your pension can support your life rather than disappear into old obligations.

 

[Olatunde Akanbi]

4. DO NOT INVEST YOUR RETIREMENT BENEFITS IN A BUSINESS YOU DO NOT UNDERSTAND

Many people believe that the best way to survive retirement is to use their benefits to start a business.

Business can create income, but it also involves risk. A business that looks profitable from the outside may fail because of poor management, weak demand, high operating costs, dishonest employees, or inadequate financial controls.

The danger is putting most or all of your retirement benefits into one venture without testing whether it can actually generate sustainable profits.

Five years before retirement, begin learning about the business you intend to operate. Understand its customers, startup costs, competition, cash flow, and risks.

If possible, test the business on a manageable scale while you still have employment income.

Keep proper records, separate business funds from personal money, and avoid investing money you cannot afford to lose in a high-risk venture.

 

[Olatunde Akanbi]

6. DO NOT DEPEND ENTIRELY ON YOUR CHILDREN OR RELATIVES

Raising responsible children and maintaining strong family relationships are valuable achievements. However, it is risky to assume that your children will always be financially capable of supporting you after retirement.

They may have their own rent, children, school fees, business expenses, and other responsibilities. Even children who genuinely love their parents may not always have enough money to provide regular financial assistance.

That is why you should prepare for retirement as much as your circumstances allow.

Build savings, understand your pension entitlements, reduce unnecessary obligations, and develop affordable sources of additional income where practical.

You can still receive support from your family, but your basic survival should not depend entirely on money that someone else may be unable to provide.

Financial preparation helps preserve your independence and reduces pressure on the people you love.

7. DO NOT WAIT UNTIL RETIREMENT BEFORE LEARNING A NEW SKILL

One mistake people make is assuming that their working life is the only period in which they can earn money.

When retirement arrives, they suddenly begin searching for business ideas or income opportunities without the knowledge, experience, or preparation needed to succeed.

The five years before retirement provide an opportunity to develop useful skills and explore realistic opportunities while you still have a regular salary.

Depending on your experience and interests, you might learn bookkeeping, small-business management, digital marketing, consultancy, agricultural business management, or another skill that solves a genuine market need.

However, do not assume that every skill will automatically generate income. Learn how to find customers, price your services, manage expenses, and deliver value.

Start small, test the market, and build experience before depending on the new activity to support your retirement.

Your years of employment have given you valuable knowledge. The next step is to identify how that experience can continue to serve you after retirement.

 

[Olatunde Akanbi]

8. DO NOT POSTPONE YOUR RETIREMENT PLAN UNTIL THE LAST MINUTE

The biggest mistake may be believing that you still have plenty of time.

Five years can pass quickly. If you postpone every important decision, you may reach retirement without adequate savings, a clear understanding of your pension, a manageable debt position, or a realistic plan for your daily life.

Start preparing now.

Review your expected retirement income and expenses. Confirm your pension contributions and records with the appropriate pension administrator. Identify any gaps in your financial plan, and set practical goals for each year before retirement.

You should also consider where you intend to live, how you will spend your time, what healthcare arrangements you need, and whether you want to continue working in some capacity.

Retirement is not simply the end of a job. It is the beginning of a different financial and personal chapter.

The more preparation you do before that chapter begins, the better positioned you will be to handle the transition.