
According to the World Health Organisation’s data published in 2018, Zimbabwe’s average life expectancy increased to 61.4 years from an average of 46 years in the year 2000. The WHO identified HIV/AIDS, influenza and pneumonia and coronary heart disease, among the leading causes of death in the country.
However, as Zimbabwe scores major strides in reducing deaths related to the
above-mentioned diseases, citizens now live longer, making retirement planning more critical than ever.
Retirement planning is something that many easily brush aside, especially when they are still economically active. Most citizens would think it is not
necessary to plan for retirement since they assume their children would take
care of them, as they get old. Some may have donor-dependence syndrome and simply convince themselves that Government or non-governmental organisations will provide social welfare grants and food aid respectively. Essentially, everything will sort itself in the end, right?
Unfortunately, not always!
It is high time, people move away from the traditional thinking that someone will take care of their old age needs. One should take control of his/her future, as no one is certain about tomorrow.
Why personal post-retirement plan is the answer
Whilst Government and non-governmental organisations may be willing to provide for the elderly, they may not have the capacity to cater for everything, including medical costs, food and accommodation owing to scarcity of resources.
It is also important to note that one’s children, who are normally regarded
as a source of security, may be struggling to meet their own needs, thus making it difficult for them to spare some money for extended families.
There is therefore, a need for the economically active citizens, to have personal post retirement plans to sustain oneself when he/she is no longer economically active.
Don’t waste lump-sum pay-out, have a financial plan
In Zimbabwe, pension scheme members are entitled to a third of their total benefits on retirement, which, for some, runs into tens of thousands of dollars depending on one’s contributions. The remaining two thirds is accessed as monthly payouts.
As indicated before, statistics from the World Health Organisation say Zimbabweans are now, on average, living longer than before. This means that those with pension plans will need a substantial amount to live comfortably during their years post-retirement.
Whilst the average life expectancy according to the WHO is within the average retirement age of 65-years, often people live longer than that.
Essentially, what it means is that those with pension schemes need to be financially disciplined when they get their lump-sum at retirement, so that their pension benefits can last their entire lifespan.
After working hard for so many years, the temptation to spend one’s first pension pay out on lavish hotels, holidays, expensive cars and beer is stronger. However, pensioners should resist such excessive spending.
Some pensioners are left destitute after recklessly spending their lump-sum and are eventually left with nothing to show for their sweat of many working years.
It is therefore, important for pensioners to draw up a list of things they would want to spend the money on and put them in priority order so that the primary needs are met first.
If one is not sure about how he/she can manage their lump-sum, they can seek
professional advice from financial advisers.