‘Children cannot be your security to retirement’
The thought of retirement can cause anxiety and many feel overwhelmed and unprepared. The biggest wish for those approaching retirement is ensuring that they can continue to enjoy their present lifestyle even in retirement, without missing out on anything.
The good thing is that this wish can be actualised once a good retirement plan is carried out.
Ironically, planning for retirement is the last thing on the mind of people. The sad part is that people normally plan for retirement seriously when they are about to retire and when it is almost too late.
It is for this reason that, Springboard, Your Virtual University, a radio programme on Joy FM, used this week’s edition to educate listeners on retirement planning.
The programme, which is hosted by Rev. Albert Ocran, had the General Manager of Enterprise Trustees, Mr Joseph Ampofo, and the Chief Operating Officer of Axis Pensions Trust, Mr Simon Ayivi, who both shared their ideas on how to effectively plan for ones retirement.
The two resource persons both advised listeners to desist from the habit of making children their security during retirement because it was not sustainable.
Mr Joseph Ampofo called for the need to change the mantra that children are a form of security to retirement.
“I remember when my first daughter was born at the naming ceremony, one of my uncles said ‘your retirement is secured, you have a beautiful daughter and she will be the one who will take care of you when you retire’. I had my second and third born and the same uncle kept telling me the same thing. ‘You have three daughters who will collectively ensure that in your old age, you are sorted out’ ,” he said.
“This kind of thinking must cease because children cannot be your security during retirement,” he added.
For his part, Mr Simon Ayivi said one of the biggest misconceptions that people held, “that my kids will take care of me when I retire.”
He said people had to start thinking about their retirement now and start adopting measures to have an enjoyable retirement rather than having to depend on their children.
“The truth is, if we do not die before we go on pension, we will have to live our lives after retirement in old age in poverty if we don’t plan for it,” he stated.
Income retirement ratio
Mr Ayivi said: ‘There seems to be a cause for concern in the Income Retirement Ratio, which is the amount of money that you are likely to earn when you retire.’
It is deemed that ideally, at least 70 per cent of what one is earning currently should be available to him when he retires but statistics available indicate that in Ghana, with the official regulation scheme which is SSNIT, one is likely to earn less than 30 per cent of his pre-retirement income when he retires.
This is seen as inadequate and Mr Ayivi, touching on it stated that “Just about three weeks ago, we saw the SSNIT statement of a retiree.This is somebody who at the time of working was making about GH¢8,000 a month but now this person retires and his pension is around GH¢1,500 which means that he was only receiving about 19 per cent of his pre-retirement income.”
He said the situation was not the best as it would significantly affect the standard of life of the retiree.
“Globally, there is a global retirement index, which is a data that was developed by two global giants. It examines the factors that drive retirement security. In the 2016 report, there was no African country in the top 25 performing countries. This is because, in Ghana, for instance, when you retire, your earning capacity reduces by over 70 per cent,” he said.