Saving For Retirement: A Comprehensive Guide for Employees

Certainly, the greatest undoing of any employee will be inadequate preparations or negligency as regards saving towards retirement. And truth be told, the ever-sumptuous paychecks, promotions, bonuses and other benefits employees enjoy while still working could trick one into believing this will go on forever, forgetting that the object in the mirror (retirement) is closer than they appear.

Retirement is one of those things that we know we should be saving for, but often don’t because it’s not the most exciting thing to think about. It signals the end of one’s working days, employees’ benefits and the beginning of boredom and old age. However, this is inevitable, and it’s crucial to start saving for retirement as early as possible, so as not to be caught off guard.

In this comprehensive guide, we’ll cover everything you need to know about retirement plans, pensions, and saving for retirement. But before we delve deeper into the oceans of planning for retirement, let’s have a broader perspective on retirement itself.

Retirement & Types Of Retirement

Ideally, retirement is the phase of an employee’s life in which there’s a withdrawal from all forms of work and engagement in leisure and passive activities.

In Nigeria, retirement is grouped into three parts, and they’re:

  1. Statutory Retirement: This type of retirement is basically the termination of an employee’s contract after completion of the mandatory years in office, or hitting the mandatory age set by law or the employer. Take for instance, the mandatory retirement age for Nigerian civil servants (teachers), is 65 years or 40 years in service. Note that this isn’t the same for all professions or businesses, as employers may also set their mandatory retirement age policies for their employees.
  2. Medical Retirement: This is the forceful retirement from service due to the commencement of a permanent medical condition that’ll hinder the employee’s output.
  3. Voluntary Retirement: Just as the name implies, voluntary retirement is the decision of an employee to withdraw from work without hitting the statutory requirement yet. This is majorly due to personal reasons.

Retirement Planning

Simply put, retirement planning is the process of an employee setting and adhering to financial goals for one’s post-work life and developing strategies to achieve those goals.

The sole aim of retirement planning is to ensure that employees can maintain their desired standard of living during retirement, via their savings, without having to rely solely on government benefits.

How To Begin Saving For Retirement

Actually, there’s nothing complicated with saving for retirement if the body and soul so want it. However, to err on the side of discipline, commitment and intensity, here are a few carefully woven guides you shouldn’t joke with.

  • Set Realistic Retirement Goals: Just as you set yearly and quarterly goals, you should set one for your retirement days. What are you looking to have gotten before then? How do you intend to save? Setting goals like these will keep your retirement plans in check.
  • Determine Your Expected Saving Estimate: Once you have a sense of your retirement goals, you’ll need to determine how much money you need to save to achieve them. There are many numerous and peculiar ways that can help you estimate your retirement needs based on factors such as your current age, income, and expected retirement age. Leverage on them.
  • Invest, Invest & Invest!: Setting up investments towards your retirement can’t be over-emphasized. And investment here doesn’t necessarily have to be real estate, or stock market investment that can be a pain in your ass even after retiring. Sourcing for ways to make your money work for you via passive income is also a form of investment that’ll surely come in handy.
  • Keep A Disciplined Pension/ Individual Retirement Account: Although some employment contracts already has an automated way of saving up an employee’s pension during service years, some don’t. If you fall under the latter’s umbrella, you can as well consider opening an account strictly for this purpose where you’d automate your pension savings.
  • Don’t Confuse Your Retirement Savings With Emergency Funds: It can be quite tempting to mix up emergency funds with retirement savings, however, both are completely different. The aim of saving up towards retirement is to set up enough funds for you even after you stop working. It’s meant for your post-working years, and shouldn’t be misused.

Now, if you haven’t started saving up for retirement yet, it begs the question “When should I start?”

When Should I Start Saving For Retirement?

According to the Enhancing Financial Innovation & Access (EFInA) survey, which put Nigeria’s adult population at 106.2 million (18 years+ & above), 98 million are outside the pension scheme as only 7per cent or 7 million adults were reported to have had pension savings accounts as of 2020.

This survey goes to show that more than a handful of Nigerian employees don’t have a pension saving because they’re waiting for the perfect time to start.

The simple answer to “When should I start saving for my retirement?” is – NOW! It’s never too early to start saving for retirement. In fact, the earlier you start, the better off you’ll be in the long run.

How much should I be saving for retirement?

No one is in a better position to answer this than yourself. The amount you should be saving for retirement depends on personal factors such as your age, income, and retirement goals.

It’s crucial you assess your financial situation and determine how much you can realistically save each month.


Saving for retirement shouldn’t be a negotiable task for every employee. With a clear retirement plan and a commitment to saving, you can achieve your retirement goals and enjoy financial security during your golden years. Start planning and saving for retirement now, and you’ll be glad you did in future.

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