How to plan for retirement

1. Visualize Your Retirement

We are very particular about our dream job, wedding or house; often getting into specific detail about each of these things. With the very same tenacity, retirement should be looked at as a time that can be just as detailed.
For example, does retirement mean leaving the city life and driving 8 hours towards the quiet solitude of the hills? Or does retirement mean jet setting across the globe discovering new delicacies? Or does retirement mean finally being able to focus on your writing without distraction?
Define what retirement means to you.

2. Start Saving Now!

Crowd-sourced contributions are good but they soon run out. Waiting for the retirement season to approach in order to begin saving is never a good idea.
Suppose the retirement age is 65, and you are a 23-year-old final year student at the university or a fresh graduate. You are still in your prime and ready to take on life. If you chose to save UGX 20,000 per month, every month until you turn 65 – you will have saved up UGX 10,080,000. Now this is just the principal saving with no interest accrued.
Of course, during this time, you can put your money into an interest generating investment so that the savings can be multiplied.

3. Saving Through Your Job

While on the topic of interest: Are you employed? Are you and your current employer contributing to your Social Security Fund?
In Uganda, this is the National Social Security Fund (NSSF). Contributions to this fund are made from both the employer and the employee. The deduction is made off the employee’s gross salary: employee contributes 5%, while the employer contributes 10%. Making it a total of 15% of the gross monthly income contributed.
However, most employee’s shy away from ensuring that this is step up because they prefer to keep the 5% for themselves, thus cheating themselves out of their own ‘inheritance’ so to speak. NSSF invests the funds entrusted unto them thus allowing them to grow over time while earning an interest. For the financial year 2015/2016, the fund paid an interest rate of 12.3% to its members.
So why exactly would you decided to keep 5% of your salary instead of saving 15%??

4. Consider Long Term Investments

These are the kinds of investments where the possibility of earning profit can only happen long term. Investing in paper assets might be an avenue that can be considered. These assets include include stock, bills, bonds, etc.
In Uganda, the Uganda Securities Exchange is a great place to look at the different companies that have been listed.  The Bank of Uganda advertises an invitation to tender Treasury Bills every two weeks. T-Bills have maturity in intervals of 3, 6 and 12 months.
Should you consider this option, however, beware of withholding tax, commissions as well as agent fees.
If you need more information, the Uganda Securities Exchange lists brokers who have membership with them. These would be a good source of information besides the exchange itself.

5. Do Not Touch Your Stash!

Last but not least, determine not to touch your savings, whether it’s for an emergency or not. This definitely means do not keep your savings in a bank account that give you access to your funds using an ATM card. Go to your bank branch and look through their product options with regard to retirement.
With these five guidelines, let’s start looking at retirement as an exciting phase of life – one that we can choose to plan for and be excited about; and not one to just be resigned over.

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About Matovu George William

Born on the 25th November. Am a freelance website designer,Mobile App programmer and Technology blogger with clientlists and portfolios focused on arts, music, film and community work. Dedicated advocates of Clean, accessible design and have a sharp attention to detail. Since November 2007, i have a strong management and communication skills. I Keep aware of current web and print technologies and trends. Am a diligent Internet researcher. I also have a passion for typography, having designed a number of my own fonts. Panoramic photography is an activity that has always been a hobby, but which we are now bringing into my professional work.