How to Afford Retirement on an Academic Salary: A Guide for African Researchers
Inflation and low income are making it more and more difficult for people to save for retirement. With most households barely earning enough to cover their living costs, saving for retirement has become even harder.
According to a recent study, only 91% of sub-saharan Africans are saving up for retirement. This is significantly lower than the global average of 55%. The percentage gets even lower with women.
Why Aren't African Researchers Keen on Planning Their Retirement?
One of the biggest reasons why African researchers don’t save for retirement is low income. In most African countries, the budget for research and development is comparably lower to other fields.
Most researchers have to get funding through grants or angel investors. These grants usually have a specific purpose and don't come in very large amounts. Combined with the high cost of living, it's almost for African researchers to have a retirement plan.
Also, there aren't so many retirement planning agencies that encourage and support financial literacy, which can be a huge factor in motivating people to invest in a retirement plan.
Why Researchers Need to Plan Their Retirement
- Medical Bills
As a researcher, chances are you have a retirement plan with healthcare benefits. But make sure you understand what those benefits are and how they work.
As you age, you are more likely to need healthcare. This can be expensive if you need long-term care, even with healthcare benefits. If you do not have a good healthcare plan in place for retirement, you could end up going into debt or not being able to afford your healthcare.
- Financial Freedom
Retirement can be a long time, a time to relax and enjoy life. You have to make sure that you have enough money to support yourself through it.
If you're not financially secure, you might have to rely on government and nonprofit programs. Unfortunately, these programs hardly give you enough money to help you live comfortably.
- Standard of Living
You want to make sure that you have enough money to cover your basic expenses and more for discretionary spending.
Think about your retirement goals and how much money you will need to achieve them. Once you know how much money you need, you can start to effectively plan your retirement.
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How Researchers Can Keep Earning Income While Retired
- Journal publication
Publishing your research papers in academic journals is a reliable source of passive income. This enables you to receive royalties from the publications, stay active in your field, and share your knowledge with other professionals.
- Consulting
Even in retirement, you can keep your passive income flowing by providing consulting services to businesses, governments, or other organizations. This allows you to use your expertise and experience to build relationships and manage projects.
- Invest in Financial Assets
You should also explore other passive income streams such as investing in stocks, bonds, or other financial assets. This not only helps you build your retirement income, but it also helps you build your wealth.
- Self Publications
You can also become an independent author or guest writer for books, articles, or other publications. So, you can either create your own brand and sell it directly to readers, or you can buy your publishing rights and get paid upfront or a percentage of the sale.
Red Flags You Should Watch Out for While Looking for a Pension Company
- Ridiculously high fees- ?Most pension companies charge a fee for the services they provide, find out how much it is. High service fees can be a real drain on your retirement funds. So, take your time when shopping for a pension company before settling on a company.
- Shady/ambiguous fees:?If you cannot understand how the retirement planning fees work, it's probably a red flag. Go for a company where you understand the fees to ensure you are getting a good deal.
- High-pressure sales tactics:?Some pension companies use high-pressure sales tactics to convince you to invest with them. These tactics can be overwhelming and lead you to make decisions that are not in your best interests.
- Unregulated:?If you can't find clear documentation of the company's registration with the appropriate organizations, don't go for it. This means that they might not be subject to the same rules and regulations as regulated companies. This can make it more difficult to protect your retirement savings if something goes wrong.
- Lack of transparency:?If the company is not transparent about its fees or investment strategies, they are likely trying to hide something. This makes it almost impossible to understand how your money is being invested and ensure it is being invested safely and responsibly.
Summary
Retirement planning can be a challenging task for anyone, but it's even more difficult for African researchers. Low income and high living costs significantly impact your ability to save for retirement.
However, with the right skills, interests, and retirement goals mentioned in this article, you can still retire comfortably as an African researcher.