FOUR SIMPLE WAYS THE SELF-EMPLOYED CAN PLAN RETIREMENT

According to Investopedia, retirement refers to the time of life when one chooses to permanently leave the workforce behind. Unlike employees in the formal sectors self-employed are solely responsible for their own retirements plans. For the formal employment as stated by Investopedia a pension plan is a retirement plan that requires an employer to make contribution to a pool of funds set aside for a worker’s future benefit. In Ghana 80% of the workforce are in the informal sector and most of the self-employed do not have proper plans in place for their retirements which is usually 60years as in most of the African countries. Below are four simple ways these entrepreneurs can plan their pension to have something to rely on and have proper health care whiles not inactive work;

SAVINGS
Its important for an entrepreneur especially those in the micro sector to develop the habit of savings. This can be flexible since any amount can be deposited. As a business owner you can also have funds and term deposits though its necessary to inquire on the credibility of the institution considering what happened in the country in 2019 where most pensioners lost their investments. According to Scotiabank, personal planning is important because it is the determining factor of your satisfaction with your retirement lifestyle.

SSNIT CONTRIBUTION
The Social Security and National Insurance Trust (SSNIT) has introduced a pension plan for workers in the informal sector thus self employed which is called Informal Sector Social Security Scheme(ISSSS).Under this scheme members can contribute in a very flexible way depending on their business ,it could be daily, weekly, bi weekly, monthly, annually or seasonally. If Informal workers enroll on this scheme, they can also enjoy the retirement package just like those in the formal sector. As a contributor to SSNIT you also have access to the National Health Insurance Scheme (NHIS)which is a social intervention program introduced by governments to provide financial health care for resident in Ghana without paying any premium whiles contributing and on pension .However any Ghanaian can enjoy without paying premium after age 70.

SUCCESSION PLAN
As an entrepreneur its necessary to develop people with the aim of occupying major roles of your business in the future. These people can either be family, mostly children or current staff, in this way whiles you are away from active work the business can still be functioning and you can also make income to cater for yourself.

This plan is very important as most businesses in Ghana turn to collapse immediately the owner is old or dead. As an entrepreneur your joy would be fulfilled when you step aside and witness your business grow.

REAL ESTATE
As an entrepreneur its important to have landed properties to be used for rental which would generate income in your retirement. It doesn’t necessarily have to be expensive buildings, estates or shopping complex. You can have any style of property be it a simple self-contained depending on your financial strength where you can take your rents when you are on pension without relying solely on the business or your family. Remember buildings appreciate hence it’s a best form of investments.

If the above steps are taken into consideration the self-employed in the country would have a fulfilling life when on retirement.