Retirement planning is rarely a subject that is talked about in the country as people dread the thought of having to one day retire from their respective jobs.
Retirement is, however, an issue that people should not shy away from as a better and early planning could lead to a happy and fulfilling retirement.
It is against this background that Springboard, Your Virtual University, a radio programme on Joy FM used last Sundayâ€™s edition to educate listeners on retirement planning.
Sharing an overview of the Ghanaian situation with regards to retirement, the Financial Planner of Axis Pension Trust, Ms Mimi Anane-Appiah, said out of the over 12 million Ghanaians in the labour force, only 12.5 per cent of them contribute to the Social Security and National Insurance Trust (SSNIT).
She also indicated that these 12 million workers, only about 13.92 per cent contribute to private pension.
She said the figure of the private pensions was more than that of SSNIT because there were people in the informal sector who contribute to private pensions on their own.
â€œFor SSNIT, we have 67, 000 employers that contribute to SSNIT but we have just 31, 000 employers that contribute to private pensions for their workers.
â€œIf your employer is paying SSNIT for you but not paying your tier two, what it means is that there will be no lump sum for you when you retire. SSNIT is no longer paying the lump sum so if your employer is not paying tier two for you, it means you will get the monthly payment from SSNIT but no lump sum when you go on retirement,â€ she stated.
She said the lump sum was, however, a very important part of oneâ€™s retirement benefit.
Sharing some statistics on how much Ghanaian retirees are receiving monthly as pension, she said â€œlast year, we had 78 per cent of retired people taking home GHÂ¢1000 or less.â€
â€œWe had 50 per cent of pensioners earning GHÂ¢600 or less and about 25 per cent earning GHÂ¢400 or less,â€ she noted.
She said only about one per cent of Ghanaian pensioners earn between GHÂ¢5000 or more.
Men more prepared
When asked about which gender tends to be more prepared for retirement, Ms Anane-Appiah, said â€œwith the information I have, it is the men who look more prepared for retirement.â€
â€œA lot more men work in the private sector or formal sector so they tend to rely on what their employers do for them but a lot of women are in the informal sector and generally in that sector, they donâ€™t really plan for their retirement.
â€œSo I will go with the men not because they are deliberately making any effort but because they tend to be the ones who work more in the formal sector,â€ she stated.
A different view
Also speaking on the show, the president of the Chartered Institute of Bankers, Ghana, Mrs Patricia Sappor, said she, however, believed women tend to be more prepared than men.
â€œWomen are more financially prepared for retirement than men because women are more conscious of the future, they want to be very comfortable so they prepare for it,â€ she said.
When to start preparing
Commenting on how early one must start having a conversation about retirement, Mrs Sappor said â€œas soon as you start working you should start thinking about retirement because it is inevitable.â€
â€œOnce you start earning income, you should start planning for your retirement because whatever income you receive, your future is part of that income so you start thinking about how well you can spread that income and invest some in your future because you will not be able to work throughout your life.
â€œYou cannot run away from the facts of life. You just have to ask yourself that will you be in a position to work throughout your life and look at how you can position yourself to face the challenges of the future,â€ she noted.
Sharing her personal experience as a retiree, she was extremely happy the day after her retirement because she had retired honourably.
â€œWhat was very important and crucial to me was the next step after retirement, what to do with my life and how I can impact the lives of other people.
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â€œThe fear of retirement is very real and I went to SSNIT three years before my retirement to ask them if I am to retire today what am I going to get and I tried to live within that amount,â€ she noted.
Source: Graphic online