The Amount of Money You Need To Save To Retire Comfortably In Nigeria

image: elpis.com.sg

To retire comfortably at the age of 65, you need about N80 million in today's purchasing power in your retirement and investment accounts.

How did I come to that number?

Here is the breakdown.

Believe it or not, the life expectancy in Nigeria is no longer the low figures it used to be and when you discount the deaths in the crisis prone part of the country and the deaths due to no access to health care facilities, you'll find that for a Nigerian already above 24 years old and working an office job in an urban area, the life expectancy is close to 85. 

"But I don't see many 85 years old people in Lagos, Abuja or PH? Michael, that figure is contentious."

You don't see them because we are still too young. The very old people you see today had their own prime when the life expectancy in Nigeria was like that in a carnivore infested jungle. Things have changed a lot and the very lifestyle we are living today is unique to us. There are no comparable past generations to use as a guide. So just swallow my words hook, line and sinker.

You should expect to live some 20 years more after retiring. And when you factor in the accumulated lifestyle taste you would have gotten used to over your active career, the maintenance cost for your physical assets (cars and house) and desire to take a well deserved vacation once in a while without having to wait for your children or grandchildren to sponsor it, then you will need an income of about N4 million per year. Multiply N4 million per year by 20 years and you get the N80 million.

But don't run off yet! That is in today's purchasing power. The type of things N4 million can buy 30 years ago, N10 million cannot attempt buy them today. So you are going to also factor in inflation.

Without the type of tumult we experienced during the military era, and just conservatively projecting the last 10 years forward, inflation-wise, you should plan for a 12% inflation rate. And at that rate the N4 million per year need doubles every 6 years. 

So how much should you save annually to meet that retirement goal?

I have taken the pain to create the analysis for you and by age.

Retirement Age: 65

Retirement Goal (NGN): 80,000,000

Inflation Rate: 12%Age: Your current age
Total Saving Required (NGN): How much you need to have in your account today to retire with N80 million after factoring inflation
Annual Saving Required (NGN): How much you will need to save annually to meet your retirement goal, factoring inflation
Total Investment Required (at 10% return rate, NGN): How much you will need to have in 10% interest bearing account to meet your retirement goal of N80 million
Annual Investment Required (at 10% return rate, NGN): How much you will need save yearly in a 10% interest bearing account to meet your retirement goal of N80 million

You can download the Retirement Savings calculator Excel file here.

Age	Total Saving Required (NGN)	Annual Saving Required (NGN)	Total Investment Required (at 10% return rate, NGN)	Annual Investment Required (at 10% return rate, NGN)
21	666,666,666.67	15,151,515.15	177,777,777.78	2,772,376.77
22	653,333,333.33	15,193,798.45	175,555,555.56	2,812,444.38
23	640,000,000.00	15,238,095.24	173,333,333.33	2,854,541.42
24	626,666,666.67	15,284,552.85	171,111,111.11	2,898,816.81
25	613,333,333.33	15,333,333.33	168,888,888.89	2,945,434.33
26	600,000,000.00	15,384,615.38	166,666,666.67	2,994,574.60
27	586,666,666.67	15,438,596.49	164,444,444.44	3,046,437.21
28	573,333,333.33	15,495,495.50	162,222,222.22	3,101,243.32
29	560,000,000.00	15,555,555.56	160,000,000.00	3,159,238.65
30	546,666,666.67	15,619,047.62	157,777,777.78	3,220,697.02
31	533,333,333.33	15,686,274.51	155,555,555.56	3,285,924.43
32	520,000,000.00	15,757,575.76	153,333,333.33	3,355,263.95
33	506,666,666.67	15,833,333.33	151,111,111.11	3,429,101.55
34	493,333,333.33	15,913,978.49	148,888,888.89	3,507,872.96
35	480,000,000.00	16,000,000.00	146,666,666.67	3,592,072.02
36	466,666,666.67	16,091,954.02	144,444,444.44	3,682,260.67
37	453,333,333.33	16,190,476.19	142,222,222.22	3,779,081.08
38	440,000,000.00	16,296,296.30	140,000,000.00	3,883,270.59
39	426,666,666.67	16,410,256.41	137,777,777.78	3,995,679.94
40	413,333,333.33	16,533,333.33	135,555,555.56	4,117,295.95
41	400,000,000.00	16,666,666.67	133,333,333.33	4,249,269.93
42	386,666,666.67	16,811,594.20	131,111,111.11	4,392,953.38
43	373,333,333.33	16,969,696.97	128,888,888.89	4,549,943.51
44	360,000,000.00	17,142,857.14	126,666,666.67	4,722,141.74
45	346,666,666.67	17,333,333.33	124,444,444.44	4,911,829.77
46	333,333,333.33	17,543,859.65	122,222,222.22	5,121,769.62
47	320,000,000.00	17,777,777.78	120,000,000.00	5,355,337.06
48	306,666,666.67	18,039,215.69	117,777,777.78	5,616,702.15
49	293,333,333.33	18,333,333.33	115,555,555.56	5,911,077.43
50	280,000,000.00	18,666,666.67	113,333,333.33	6,245,065.44
51	266,666,666.67	19,047,619.05	111,111,111.11	6,627,155.09
52	253,333,333.33	19,487,179.49	108,888,888.89	7,068,447.27
53	240,000,000.00	20,000,000.00	106,666,666.67	7,583,743.10
54	226,666,666.67	20,606,060.61	104,444,444.44	8,193,225.92
55	213,333,333.33	21,333,333.33	102,222,222.22	8,925,152.32
56	200,000,000.00	22,222,222.22	100,000,000.00	9,820,337.35
57	186,666,666.67	23,333,333.33	97,777,777.78	10,940,003.54
58	173,333,333.33	24,761,904.76	95,555,555.56	12,380,357.63
59	160,000,000.00	26,666,666.67	93,333,333.33	14,301,744.15
60	146,666,666.67	29,333,333.33	91,111,111.11	16,992,783.11
61	133,333,333.33	33,333,333.33	88,888,888.89	21,030,714.48
62	120,000,000.00	40,000,000.00	86,666,666.67	27,762,431.32
63	106,666,666.67	53,333,333.33	84,444,444.44	41,228,612.66
64	93,333,333.33	93,333,333.33	82,222,222.22	81,632,653.06
65	80,000,000.00	-	80,000,000.00	-