Retirement is not something a lot of people, especially young people, think about. They tend to assume that there is a lot of time to prepare for it. While this is a wrong assumption, it is also important to know that retirement is not age-based. Retirement is a big part of life and it is essential to plan for it as you would plan for writing an important exam. One of the ways of doing that is by learning about retirement. In this article, we talk about the different types of retirement in Nigeria.
But first, let’s know what retirement is about.
What is retirement?
Retirement is the point at which a person chooses to stop working, typically due to reaching a certain age or having sufficient savings and investments to support their desired lifestyle.
Retirement marks the end of a person’s working life and the beginning of a new phase of life where they can pursue their interests, spend time with family and friends, and enjoy leisure activities. It can also involve receiving income from various sources such as pension plans, personal savings, investments, etc.
Importance of retirement planning
Retirement planning is crucial for people who want to ensure they have sufficient financial resources to support their desired lifestyle in retirement. With retirement planning, you can be assured of peace of mind.
Also, you have a sense of security from unforeseen events like inflation, illness, or job loss. It is safe to say that you’ll live a longer and fuller life when your retirement is planned for.
Types of retirement in Nigeria
1. Compulsory Retirement
Compulsory retirement in Nigeria refers to the termination of an employee’s contract of employment due to reaching the mandatory retirement age set by law or by the employer. The mandatory retirement age varies depending on the sector and the job position.
The statutory retirement age for federal civil servants is 65 years. Employers may also set their mandatory retirement age policies for their employees, which are usually outlined in the employment contract or employee handbook.
Employees are usually entitled to retirement benefits such as pension payments, severance pay, or other benefits, depending on the terms of their employment contract and the relevant laws.
2. Voluntary Retirement
Voluntary retirement in Nigeria refers to the decision of an employee to retire before reaching the statutory retirement age, usually based on personal reasons such as health, family, or financial considerations. It is not mandated by law, and it is entirely up to the employee to decide when to retire.
In Nigeria, some companies offer voluntary retirement packages to their employees as a way to reduce their workforce and cut costs. These packages may include severance pay, pension benefits, and other incentives to encourage employees to retire voluntarily.
3. Medical Retirement
In Nigeria, medical retirement is a type of retirement that is granted to employees who are no longer able to work due to a permanent medical condition.
This type of retirement is granted by an employer or the government, depending on the nature of the employee’s employment.
When an employee is granted medical retirement, they are typically entitled to a pension or other retirement benefits from their employer or the government. The amount of the pension or benefits will depend on a variety of factors, including the employee’s length of service, salary, and terms of their employment.
Bottom Line
In conclusion, there are several types of retirement in Nigeria. Each type of retirement has its own eligibility criteria, benefits, and requirements. It’s important for you to understand the different types of retirement and to plan accordingly to ensure a smooth transition into retirement. It is also important to confirm with your employer about the retirement options available to you so you can plan accordingly.
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