We all want to have a golden egg for our future

What is the best option for your retirement?

You may have heard the saying, “tomorrow will sort itself out.” That is exactly the kind of thinking we don’t want you to have when it comes to retirement! It is no secret that many Zambians in formal employment are on short term contracts. This means many workplaces have made no pension provisions beyond the statutory requirements. No one wants to be numbered among the over 90% of Zambians who become dependants again at retirement, which means you need to make a plan. The trick is, not all plans are equal.

The entrepreneurial mind-set is commendable. As Zambia emerged from the 1990s, many people were still in a daze, recovering from the expectation that the large corporations would sort out financial needs from trainee to retirement stage. Many people emerged from liquidated or privatised institutions with no idea how to handle personal finances and prepare for the future. We have a come a long way, and there are now many time tested options available. The entrepreneurial acumen that was a rarity is now more common, and the dream of joining the emerging middle class is not impossible. We do, however, need to be mindful how we plan to sustain that lifestyle well into retirement.

For many people their gratuity is the capital they use for starting a business. The hope is that the gratuity will be enough to take the business through the learning-curve phase, into the profitable phase, and continue to grow. Multiple streams of income is the dream, but it is still a gamble. Not to be the pessimist, but in March 2019, it was reported in the media that PACRA deregistered about  24,700 companies, a sign that running a successful enterprise is not an easy task. Even while you take the plunge, you need to make separate arrangements to secure future financial needs. While entrepreneurship is always commendable, it is no substitute for a good pension scheme. As you consider what is your best option for retirement, here are four reasons why you need a private pension scheme.

1. Risk management by spreading your risks

Don’t think of a pension scheme as competing with your other investment plans. Rather treat it as a way of putting your eggs in many baskets! Diversifying risks is an important part of financial management, and there is no reason why this should not apply to your personal finances.

Many times we are called upon to do some form of risk management for our work places, to ensure that the organisation remains a going concern for the foreseeable future. But often times we fail to practice personal budgeting, savings and retirement planning. Spreading your risks is an important way of securing your lifestyle for the future, and a pension scheme is important to ensure your comfort well into retirement.

Passive income is important, especially when you consider the stages in life when you may not be able to work the way you currently do. The planning and forecasting we are employed to carry out for organisations is an important skill, let us use it to assess our personal financial conditions, and ensure we are secure for the future.

2. Right now, the best time to start!

You may have heard the saying, “little by little makes much.” Pensions are based on regular contributions, so you don’t have to wait for a huge lump sum for a pension scheme to be set up. If you can begin preparing for future financial needs, why delay? Any initiative you can take today to secure your future financial needs is worth pursuing. The longer you take, the more costly it will be to accumulate enough finances for a comfortable retirement. Also, the longer you contribute to a pension scheme, the kinder it will be on your pocket.

Our recommendation is that everyone should start contributing to a pension as soon as they enter formal employment. If you have already been working for a while, don’t despair, we can still give you suitable financial advice on what pension options are best for you. And when you ask what is the best option for your retirement, the answer invariably begins today.

3. Reliable experts run the pensions scheme

You may be driven by passion to start a business (albeit in your spare time) and run it after retirement. This is good, but the risks are real and it makes sense to have a separate guaranteed pension arrangement run by a dedicated financial team. Your pension contributions are handled by time-tested investment experts, who give their full time, to the process of investing your funds for a secure future income.  Your monthly contributions will begin to work for you today, compared to your own business that often has to suffer when you do not have the time to spare to oversee its operations.

4. Regular income is guaranteed by a scheme

Stability is important, especially when it comes to finances. Monthly costs of housing, electricity, groceries, medical bill and transport are sometimes taken for granted. A pension would provide a steady monthly income, which will cushion you from the fluctuating occasional or seasonal income that a small business would provide.

A regular income at retirement is important, especially that many retirees still have dependants, and are accustomed to the pleasures of urban or peri-urban life! A lot of retirees experience a drastic change in lifestyle when they no longer have a steady income, worse still if they have dependants who have not completed their education.


Finally, I hope you have begun to see that depending on gratuity when deciding what is the best option for your retirement, is at best a risky enterprise. By all means follow your passion, but diversify your financial risks as well. The stability offered by belonging to a pension scheme is worthwhile. Do not put off the crucial decision for the indefinite future. Make the most of the experts, get in touch with us today!