We are in the second week of 2017 and most of us are determined to live through our New Year resolutions covering almost everything from habits, relationships, eating lifestyles, punctuality, spirituality and others. Resolutions should also include personal finances and how we would forge ahead. Retirement planning should have its share of the resolutions. This column has shared quite a number of facts over the last couple of months and we may need to pin some of them down as resolutions for 2017.
The potential for delayed registration into a pension’s scheme is quite high for self-employed individuals. Time has been identified as a factor for the growth of funds. Pension funds usually require decades to grow to adequate levels. If any self-employed person has not yet registered and hasn’t started contributing, this should be the first resolution; let 2017 be the year to register in private pension scheme and start to contribute.
One other important factor to consider in planning for retirement is the basic knowledge of expected personal benefits.
Expected benefits depends on what options have been put in place. Each option has what it brings.
Against this background, it is worth knowing that each of the 3-tiers of Ghana’s pensions contribute a certain percentage of taxable gross salary. Other supplementary options like a business or a property have what they bring. Another resolution would be to at least acquire a basic knowledge of what benefits are expected from pension contributions and other options.
The long term nature of the fund brings in the third resolution. Monitoring of long term financial arrangement is critical to its success. In just the same way short-term financial schemes like a bank savings attract attention, long term pension arrangement should also get that attention. The third resolution for 2017 would be to monitor the performance and future relevance of all retirement options.
2017 promises to be an interesting time for pensions. A lot of the economic indicators are expected to shift from what we have known for the past 5 years. The stock market is expected to do better while treasury rates are expected to drop further. More importantly for pension funds the investment industry is expected to deepen and widen with the introduction of new asset classes and the deepening of the existing ones. This would give fund managers more options to invest our contributions.
As a contributor you should have an idea what that means for you.
Today’s piece looks at just a three-point resolution for retirement planning.
Obviously we should know how resolutions can easily become self-broken promises if not followed through with discipline.
My resolution in all this for 2017, is to keep writing.
If you are retiring in 2017, may you Retire Richly. Happy New year to all
Author: Yaw Korankye Antwi
The author is a Pensions Expert and a Certified Risk Management Professional.