We are in the first month of 2022, 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 money matters and how we would forge ahead. Retirement planning should have its fair share of the 2022 resolutions. Obviously, the fact remains that the time of fruit-taking shall surely come. 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 retirement planning tips or resolutions for 2022.
1. Tips for Retirement Planning: Register with a Pension Scheme now
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 2022 be the year to register in a private pension scheme and start to contribute.
If you are self-employed or in employment and want to increase contribution into your pension pot, you must register for a personal pension scheme with a registered corporate trustee. Visit the National Pensions Regulatory Authority’s website to access the full list of registered trustees.
Such pension contributions have no age limit and are flexible even for those who have left it too late. Note that if you have already attained 45 years and above, you will not be able to register for the 1st tier pension with SSNIT. Therefore your efforts should concentrate on the 2nd and 3rd tier schemes if you are self-employed and/or operate within the informal sector space.
2. Tips for Retirement Planning: Acquire basic knowledge on Retirement Planning
One other important factor to consider in planning for retirement is the basic knowledge of expected personal benefits. Expected benefits depend 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 contributes 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. There are many sources of such knowledge. The author carries out such sessions for organisations and associations sometimes for free. It is worth taking time off your busy schedule to attend at least one or two of such sessions in a year. Experience has proven that people fall into hard times in retirement, not because they did not make enough money in their work life, but lack of knowledge robbed them.
If you are 35 and above, this is a must for you. This will be a good year to join my Retirement Planning and Investment Masterclass 2022 as well as other sources of such information.
3. Tips for Retirement Planning: Self-Monitoring of Retirement Options
The long term nature of the fund brings in the third resolution. Monitoring of long term financial arrangements is critical to its success. In just the same way short-term financial schemes like bank savings attract attention, long term pension arrangements should also get that attention. The third tip for retirement planning for 2022 would be to monitor the performance and future relevance of all retirement options.
4. Tips for Retirement Planning: Seek Financial Advice
One resolution for people in 2022 must be to seek financial advice when necessary. The era where one relied on recommendations by friends and family is over. The recent happenings in the financial sector have proven so.
Relatives who worked in failed financial institutions did not genuinely know what was coming, in order to alert their relatives who had invested in their places of work. Now siblings and friends are being blamed for the loss of investments. Planning for retirement is a long term activity and as such regular advice is needed. Also, pensions can be confusing. Make it a necessity to seek advice for retirement planning in 2022.
The regulator is expected to tighten the regulatory supervision of the industry. Economic trends for 2022 may be that of increasing treasury rates and an unpredictable stock market, more likely to see a dip. More importantly for pension funds, the investment industry is expected to deepen and widen with the introduction of new asset allocations 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 of what that means for you.
Today’s piece looks at just a four-point resolution for retirement planning. Obviously, we should know how resolutions can easily become self-broken promises if not followed through with discipline.
My personal resolution for 2022, is to keep educating and keep managing my pension funds well.
If you are retiring in 2022, may you Retire Richly. Happy New Year to All.
This will be a good year to join my Retirement Planning and Investment Masterclass 2022. The masterclass is for companies, groups and individuals. Call now to book for the next public session or book for your company.
Author: Yaw Korankye Antwi
The author is a Pensions Expert