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PAL PADI: THE CONVENIENT PENSION SELF-SERVICE OF CHOICE Remote Work Skills to Become Successful in 2024 All You Need to Know About Contributory Pension Scheme in Nigeria

As a young self-employed creative, planning for retirement may not be high on your list of priorities. However, it’s important to start thinking about your retirement savings early on, so that you can build a secure financial future for yourself. In this guide, we’ll explore why starting a retirement fund in your 20s is crucial, and some of the options available to you.

One of the main reasons to start a retirement fund early is to take advantage of the power of compound interest. This means that the earlier you start saving, the more time your money has to grow. Even if you only contribute a small amount each month, your savings can accumulate over time and compound into a significant sum by the time you reach retirement age.

Another reason to start retirement savings in your 20s is that it can help you achieve peace of mind as regards your finances. As a self-employed creative, you may have irregular income and be more vulnerable to financial shocks. By saving for retirement early on, you’re building a strong financial foundation for the future. This can give you the freedom to pursue your passions, take career risks, and enjoy life without worrying a great deal about your future – upon retirement, you’ll have the resources to live comfortably and pursue your interests without necessarily relying on other sources of income.

As a self-employed individual, you may face unique challenges when it comes to saving for retirement – without the benefit of employer-sponsored retirement plans, it’s up to you to set up and fund your own retirement account. In Nigeria, there are several retirement savings options available for you as a self-employed creative. The National Pension Scheme is a government-backed pension scheme that is open to all Nigerians. As a self-employed individual, you can choose to set up a Micro pensions Account (MP) with a PFA, which allows you to contribute directly to your pension account. Your contributions are invested by the Pension Fund Administrator (PFA, e.g. PAL Pensions) in a range of investments, such as stocks and bonds.

Another option is to set up a personal savings account for the sole purpose of retirement or invest in stocks, bonds, or other investments. Although these options don’t offer the same tax benefits as pension schemes, they still allow you to save for your retirement and grow your wealth over time.

In conclusion, starting a retirement fund in your 20s is important as it gives you more time to save and invest, offers potential tax benefits, and helps you achieve financial independence in the long run.

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