What You Must Not Do With Your Retirement Gratuity In Nigeria
What You Must Not Do With Your Retirement Gratuity In Nigeria – What you do with this lump sum payment at retirement benefit called gratuity may determine how long you may leave afterwards. What them must you not do with your gratuity at retirement? That is the subject of this article.
First, Gratuity is a sum of money given to someone – especially in the public sector – who had provided service, as a way to show graciousness or thankfulness for such a long meritorious service to the nation. Even though it looks similar to Severance pay which is also a lump sum paid to a worker in the company who had also served meritoriously for a long time but who is being laid off due to reorganisation or for any other reasons cordially agreed together with the employer.
In fact, the similarity here is that the two may be last wage earning for both the retiree in the public sector and the worker in the private sector who is also leaving finally may be at an age that is equivalent to retirement age.
Whichever it is, and whoever is involved, this article is for you. You have to be very careful with this money. In this article, I shall be discussing with you those things you must not do with your gratuity or severance pay. Read on as I itemise them.
The time is ticking fast and will soon be up. Know what you should do now.
Not planning for this time and money is a great life mistake. In my previous article on ‘ How to plan for my Retirement’ I enumerated how that everyone who has put in about 20 years in an employment should begin to plan for retirement. The first step should be a personal audit. This will enable you assess your age and health condition now and what you expect it to b in the next ten years, so as to know how to go about it. That will also make you work out the ideal time for your retirement. You can see that failure to plan for retirement is a grave mistake.
If you must manage your gratuity very well, you must invest your gratuity adequately. Just don’t leave any money idle. Invest not less than 80% of it. There are a lot of business ideas you can invest in. When you don’t have any ready plan for this money ask your bank to fix it for you. You can also ask your bank to be managing it for your buying Federal Treasury Bill/Bonds. This will keep the money safe until when you are ready for other forms of investments.
As I explained above, do not keep your money idle. Any idle money does not generate any further income. In this connection, you must not ignore the effect of inflation in the economy. Remember that your pension is fixed and will not be adjusted upward to reflect economic realities. Therefore, if you keep the money idle it runs down quickly and you may not have alternative income again. Consider what will happen to you if this happens. Let’s continue.
This means, you did not plan your retirement expenditure, which include investment spending as I explained above. It also has to do with your planning for your health care and regulating your lifestyle. This financial plan should be able to define your retirement lifestyle. This plan will let you assess your net worth, ensuring you liquidate all of your debts.
I have taken time to bring in so many things in this paragraph believing they will help you.
You must have a good business plan a head of time. Where this is not done, you could get endangered. There are a lot of business ideas in this website that could help you. I could also provide business coaching services for you for free for the first three months. This is to make sure you don’t get into a wrong business.
You must start your retirement plan early enough. The gratuity money is not always good to start erecting family house with. If you do, what happens when it finishes. This is why I advised that you should start early. In your retirement budget, you should have made provision for your accommodation when you retire.
Frankly speaking, this money (gratuity) is not also good for paying children school fees. It is not money for marrying a second wife, or throwing elaborate wasteful party like grandmothers memorial service.
You must not be involved in Ponzi money schemes like MMM, and other net-working investing activities returns of which are not guaranteed.
It is not time to engage in legal tussles like defending grandfathers lost land, or some customary right you thought could be yours. My point here is that this your gratuity will finish and you will not have a replacement, then what happens to you.
A business coach will help you get good business ideas, prepare business plan for you, register your business with Corporate Affairs Commission, organise your office, manage your tax matters etc. Trying to do it alone is like self-medication by the sick man himself alone.
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