Financial Challenges Affecting Elderly Doctors, Post Retirement

Exploring the critical issues surrounding retirement planning, the importance of exit strategies, and how to achieve financial freedom after a life in active medical practice.

The life of a doctor from the days in training, to his or her active professional practice days, is usually very tasking and busy. Often, having no time to unwind, be involved in other activities in the society, or plan for life, after active practice.

The doctor while in active service is either in paid employment in the public or private sector, often augmenting with round the clock moonlighting or runs his or her private practice.

For those in paid employment, issues of post retirement challenges are common as in other people in paid employment, however, those in self-employment pose additional issues. For the latter category, a booming and profitable practice or hospital business today, may not be so, when the practitioner is in the retirement age of 60years and above, when energy, mental and physical fatigue have set in. More so at this age bracket, ones contacts in retainer companies would have diminished greatly because of new “kids” in the block, with greater agility and reach. For such practices, the thing to do is to plan an exit strategy when the practice, still has value but before the business drastically slows or closes down.

The exit strategy includes arranging a full or significant buyout to other healthcare investors, which may even include other partners or employees. Better still going public, if all conditions precedent to such move can be achieved by the business. But for few exceptions, transfer of practice or hospital business to family members have not been very successful in Nigeria.

On a general note, retirement planning in Nigeria is something a lot of people believe you put off until much later in life. This wrong notion and the mantra that …”he who fails to plan, has planned to fail”, can’t be truer; with dare and sad consequences.

The analogy of preparing or not for a final examination and the positive or negative outcomes, come in very handy.

The mindset of the millennial children are different from those of the baby boomers, so relying and depending on children you have trained while in active service may not be assured. Even those who have the heart to support their old parents may be unemployed, underemployed or their businesses may only be surviving, just enough to take care of their own nuclear families.

Usually, retirement begins when a person reaches a particular age. In Nigeria, this is from 60-65 years old. If we take this definition a bit further, retirement can be defined as a state of financial freedom where you have control over your time. In a nutshell, time when your money now works for you.

That is, retirement generally refers to the duration of a person’s life after they have left the workforce. This means a person who has retired has withdrawn from any type of active service and generally engages in activities for leisure purposes or minimal enterprises.

Thus to fully understand the importance of planning for retirement, we must first understand what it is. Retirement planning is the task of identifying your retirement income goals and outlining the steps required to achieve them.

There’s no better time than when one start earning income. You might think it’s too early and that perhaps you have a few decades before you hit the Nigerian retirement age. But the truth is, you can never be too young to plan for life, after you’ve retired. Long-term planning is great to achieve those goals you may have outlined. There’s much more time to put those plans in action and achieve your goals when you start early.

BENEFITS OF PLANNING FOR RETIREMENT

Many people wonder why they should begin planning for retirement now. Here are a few benefits:

1. Planning for retirement early ensures that you’ll be able to fully enjoy your retirement years.

2. It’s a great way to take advantage of compounding interest.

3. Having worked for your money for years, now, allowing your money work for you.

4. Achieving your retirement goals well in advance means you can choose to retire a little earlier than the official retirement age in Nigeria, for personal or health reasons.

RETIREMENT PLANNING

To start the retirement planning:-

1. Outline your needs: The first step is to outline your needs for retirement. These can fall under a number of categories like accommodation, healthcare and even feeding.

2. Estimate how much it will cost to cover these needs: You’ve got a list of needs for retirement now you can estimate how much you need to cover your retirement needs. When drafting these needs also make a point to factor in inflation too.

3. The steps for achieving your retirement income goals basically include creating, savings and investment plans that help you accomplish them. After these steps are clearly defined, you can begin to make adequate actions that will lead to you achieving these goals.

TYPES OF INVESTMENT PLANS

Great attention must be given to the Type of Investment Plans you choose to take:- It is always advisable to seek the services of appropriate professional Advisers long before retirement, besides depending on one’s pensions as enshrined in the nation’s Pension Act, using registered Pension Managers’, other areas of setting money aside for the rainy days includes investments in money and capital markets such as buying Annuities (an insured regular retirement income stream). Bonds, Shares Dividends, Mutual Funds and of course rental of Real Estate. The later may be dicey in Nigeria, with the issues of unstable socio-economic and geographic dynamics.

In all of these, it’s always advisable to spread the investment baskets to avoid being severely impacted should anything go wrong in an industry or the economy.

PERIOD OF RETIREMENT

The period of retirement is key and most crucial as during retirement, some choose to continue in a very active work even when mental and physical fatigue have set in, thus exposing one to health and productivity challenges, supporting communities, participating in politics or even running of full-time businesses. Often, one may prefer to spend their retirement travelling, visiting children and grandchildren. While some may desire to go back to the village waiting for their monthly little token. It is important to plan ahead for how you will like to spend your retirement, and prepare yourself mentally and financially or whichever one you choose to follow.

Even with good financial planning, if physical and mental strength allows, retirees need to keep some degree of activities, like networking at appropriate community levels, be it religious, social clubs, alumni associations, etc., and engaging in some scaled down economic or entrepreneurial activities applying the knowledge obtained from training or hobbies like network marketing, small manufacturing, consultancies, writing, sports like golf, etc., to stay active and healthy, always conscious that we are in volatile uncertain, complex and ambiguous (VUCA) environment, with lots of unexpected disruptions and turbulence that may affect business survival.

CONCLUSION

In conclusion, an elderly doctor’s inability to meet one’s living expenses after retirement is a sure way to psychological and associated health issues like, hypertension, depression, heart related diseases, etc. Be that as it may, elderly doctors need to keep their spirits high, always.