Also, if you’re in a defined benefit scheme, the scheme must send you, every year, a summary funding statement. This gives you important details about the ability of the scheme to pay the benefits due under the scheme.

What you should Know on joining a particular Scheme

Your scheme or provider must give you basic information about the scheme when you join. If you’re automatically enrolled in your workplace pension scheme, you must be told about automatic enrollment; that you have been automatically enrolled and what this means to you; and about your right to opt-out.

If you do not qualify to be automatically enrolled, you must be told about the workplace pension scheme and your right to choose to join it. The information must be given to you before the end of the month in which you are automatically enrolled or have a right to join.

Basic details on workplace pension schemes

If you are automatically enrolled, you should be given the basic details of the scheme within one month of being automatically enrolled. If you’re choosing to join a pension scheme, you should be given the basic details within two months of joining the scheme. The type of information you must be given is:

1. What the scheme is called and who the trustees are
2. How you build up benefits and how you can transfer other pension contributions into the existing
3. The rate of employer and employee contributions and how you can pay more whether the pension scheme is registered with the Pensions Regulatory Authority
4. Whether dependents’ benefits are payable, and if so, the conditions for payment and how to get a transfer quote, a refund of what you’ve paid in or details of the benefits you have built up
5. How to complain about the scheme, including how to contact us, the Pensions Ombudsman or the Pensions Regulator about a complaint.
6. Also, if your workplace pension scheme is a defined contribution scheme, your scheme must tell you about your investment options, including investment charges. Your scheme or provider will probably give you a scheme particular containing this information.

If you have a stakeholder pension, your provider should send you an annual statement automatically within three months of the end of the scheme year.

The statement must contain, as a minimum:

1. the value of your pot on the day before the start of the statement year; the value of your pot on the last day of the statement year (or at the time when you left the scheme if you left during the year);
2. the amounts paid in by you;
3. the amounts paid in by your employer;
4. the amount of any tax relief paid into your pot;
5. any amounts deducted for charges; and
6. a statement giving a list of other information that you can request, such as the amount of investment gain or any amounts transferred in from another pot.

Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to determine if the retirement income goal will be achieved.

Retirement planning is ideally a life-long process. You can start at any time, but it works best if you factor it into your financial planning from day one of your first paycheck. That’s the best way to ensure a financially comfortable, secure, safe -and fun-retirement.

Retirement Planning Keys

1. Determine your desired retirement income in today’s present value
2. Estimate projected income that will be available to you in retirement
3. Decide when you want to retire
4. Estimate the number of years you will likely spend in retirement until say age 90
5. Take the FLF Africa Financial Wellness Barometer to determine how much you will need to fund your desired financially independent retirement
6. Start saving and investing every month toward this desired retirement goal immediately
7. Decide to monitor your investment yield as often as possible. And do well not to withdraw until you are ready to go on retirement

Stages of Retirement Planning

Below are some guidelines for successful retirement planning at different stages of your life.

Young Adulthood (ages 21–35)

Those embarking on adult life may not have a lot of money free to invest, but they do have time to let investments mature, which is a critical and valuable piece of retirement savings. This is because of the principle of compound interest. Compound interest allows interest to earn interest, and the more time you have, the more interest you will earn. Even if you can only put aside $50 a month, it will be worth three times more if you invest it at age 25 than if you wait to start investing at age 45, thanks to the joys of compounding. You might be able to invest more money in the future, but you’ll never be able to make up for the lost time.

Early Midlife (36–50)

Early midlife tends to bring a number of financial strains, including mortgages, student loans, insurance premiums, and credit card debt. However, it’s critical to continue saving at this stage of retirement planning. The combination of earning more money and the time you still have to invest and earn interest makes these years some of the best for aggressive savings.

Later Midlife (50–65)

As you age, your investment accounts should become more conservative. While time is running out to save for people at this stage of retirement planning, there are a few advantages. Higher wages and potentially having some of the aforementioned expenses (mortgages, student loans, credit card debt, etc.) paid off by this time can leave you with more disposable income to invest.