Retirement Planning

Planning for your retirement can be nerve-racking as you approach retirement, and can still be a minefield for those people who start planning for retirement early. As the Pensions Expert, Petra makes planning for your retirement a breeze.

There are a few basic rules in retirement planning:

Start Early

When you start planning for your retirement in your twenties and thirties, you give yourself the best chance to retire comfortably and to be able to support your family in later years. Think of it this way, if you save 10 GHS at a 10% interest rate, in five years the value of your investment will be worth 16 GHS, in ten years your investment will be worth 26 GHS and in 20 years your investment will be worth 67 GHS. During the first 10 years of investing your investment grows by 16 GHS while during the next 10 years it grows by 41 GHS, showing that the longer you invest the more growth you get in your investment.

Save Often

Saving a little bit all the time is better than waiting for a big windfall before putting some money aside. The more you get into the habit of saving the more you will be able adjust your lifestyle to save more.

Every Little Bit Matters

Any money you can save towards retirement matters. Since retirement plans tend to be long term savings vehicles, you benefit immensely from compounded interest making even the littlest investment today, valuable when you retire.

Take Advantage of Tax and Other Incentives

You are not taxed on your mandatory and voluntary pension contributions, up to 35% of your income. This incentive represents a 25% savings to you. Because the law allows you to use the amount built up in your Tier 2 and Tier 3 pensions as a downpayment for your primary home, these should be the primary investment options for any long-term savings plan you may have.

Employer Matching Programs

Many employers will contribute additional money to your Petra Tier 3 Provident Fund or Personal Pension Scheme. This is essentially their contribution to your welfare when you retire. You rmust take full advantage of this benefit if your employer provides it, or convince your employer to provide it if they currently do not.

Select a Pension Expert

The last and probably the most important decision you may make to increase your chances of a comfortable retirement is which trustee will oversee your Tier 2 and Tier 3 pension investment while you are busy with life. By selecting a pensions expert who has world-class administrative and investment skills, you can be confident that your hard-earned contributions to your scheme are properly managed and grown Selecting the wrong trustee could put your retirement investment at risk. Even though all corporate trustees have been certified by the NPRA, it is your responsibility to evaluate the following when making your choice – demonstrated trustee expertise, experience, focus, independence and perhaps most importantly, their commitment to you.

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