Pension Expert Urges Retirees to Embrace Annuity Products

Mrs. Yetunde Ilori, Director-General, NIA

Pension expert has called on retirees to embrace various annuity products offered by insurance companies as a way of staying happy and guaranteeing steady income during retirement.

The expert also charged prospective retirees to receive unbiased and independent practical advice and training addressing their emotional pressures, fears, questions, personal financial planning and investment issues necessary for prudent management of their lump sum payment.

The expert gave this advice at a one-day workshop organised by the Nigerian Insurers Association of Nigeria (NIA), with the theme, “Preparing for tomorrow today,” in Lagos.

In her presentation, Olusola Ilori, who spoke on “Importance and necessity of building economic back up,” noted that many retirees were ill-equipped to invest their lump sum themselves or even to choose the right financial advisers.

She advised the retirees to seek appropriate financial management advice before investing their lump sum, adding that “Take your time; take a good look at yourself (especially your financial habits and history); get good independent advice from three good financial advisers.

“Have a plan; Diversify-don’t put all your eggs in one basket; become knowledgeable and skilled in whatever thing you decide to do; and start a business on a small scale.”

During the workshop, the experts warned the retirees to avoid scams and get rich quick schemes. “Don’t lend money to people on your lump sum (if lent to your family, consider it a gift); Don’t buy a new car; Don’t marry a new wife; Don’t start building a magnificent house,” she posited.

While explaining the importance and necessity of building economic backups, she stated that there was need to maintain balanced lifestyle out of office.

“There is the need to attain financial independence. There is the need to strive for economic self-sufficiency through other sources of income to compliment pension paid monthly to retirees.

“On no account should one be pressurized to retire without planning and having at least two or three other streams of income to compliment pension

“This gives financial security which guarantees dignity and comfort in retirement,” she stated.

Ilori warned that: “No doubt, retirement is going to come someday and for the discerning, preparations for this critical phase of life cannot start sooner for time is not your greatest friend on this project, in planning for the long years of retirement.

“For those that do start early and prepare adequately, the usual worries about surviving will not be an issue. Unfortunately, in this country people tend to believe that retirement is best dealt with when the time comes and that somehow, there will be the money to fund it even though they may not have any idea where the funds will come from.

“The unfortunate thing about this strategy is that, it becomes too late and the consequences are often dire.”

According to her, most professionals and executive often fall into this trap.