A PENNY FOR YOUR THOUGHTS

 “Financial freedom can only be achieved by a conscious choice. It's not an accident. It's not just merely by thinking, it's through grinding and doing what is necessary to get to that goal.” David Angway“

It is officially 2021. How do you feel about it? Are you excited? I am having mixed emotions. Last year was quite an emotional rollercoaster so this year I am choosing to be optimistically cautious. During the initial lockdown mid last year I found myself thinking of my retirement. The thought caught me by surprise for often this is a conversation reserved for when one is more advanced in the profession. Nonetheless, it got ingrained. I started having so many thoughts around it. How well am I preparing myself for it? What will I have to show for the long hours? During this time I finally came to the realization that for every day worked I get closer to my retirement. I, therefore, pose the questions. How is your financial situation? Have you been quite keen on it? In nursing, we explore many things but unfortunately, retirement planning is something that we do not discuss enough.

Currently, some of our colleagues are on strike and one of the main reasons is due to lack of remuneration. We have been hearing horrifying accounts of people being uncompensated for several months. This has resulted in them lacking access to health services when they fall ill. It is sad, but out of pocket, we cannot afford the same services we provide. It is not sustainable. This then builds a great foundation as to why we need to be smarter with our life choices. I am speaking to you young nurse. You who is assuming thirty years or more is such a long time. Do not wait till it is too late. Start now and thank me later.

Due to the changing dynamics of our career, we now have more opportunities for transitioning to non-hospital settings. These particular setups call for nurses with vast experience as often the roles are of a senior cadre. These opportunities then look to increase the longevity of one's career but if one is ill-prepared even this will be of no use. By having this in mind we then need to be financially awakened and one simple way is adopting a proper retirement savings plan. In my quest, I have discovered a few things that I wish to share. I hope that it ignites a desire to generate these conversations in our circles.

Get a good pension plan

Pension refers to a retirement plan that is paid by the employer, employee or both. In Kenya we currently have the government-affiliated plan; NSSF and private company owned schemes. The advantage of monthly NSSF deductions ensures that they are consistent and the limit has been set low enough for the majority of Kenyans to afford. However, will that be enough to meet your future needs? Calculate what you will have accrued then conduct a simplified projection of the probable future inflation rates. Ask yourself. Will it be enough? Secondly, is it reliable? Once you retire how soon will you access your finances? With such questions in mind, it brings up the question. What is a good pension plan? I have highlighted below information obtained in an article attached along with a few pieces of sage counsel from financial experts. Find more information here A guide to a personal pension and here Kenya new laws on retirement.

A good plan should be;

1. Personalized- The amount you contribute should be sustainable to ensure consistency. 

2. Flexible-  It should ease the process of funds transfer. For instance, due to switching to a new plan when changing employers or adopting a new pension plan. Percentage of money contributed should be revised when remuneration increases. This translates to greater savings.

3. Ensure maximum returns-  Among the available options within the plan. A good plan ensures that one achieves the best option among the list. 

4. Transparent- The plan adopted should be concise and not have any hidden costs.

5. Bonus benefits- Due to life's eventualities the plan should allow for the nomination of a new beneficiary.

In a nutshell, as we continue with our personal journey of self-improvement let us remember that all aspects of our lives are important and none should be dismissed. "Your economic security does not lie in your job; it lies in your own power to produce, to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth.” Stephen Covey