daywalker12911:
How much have you saved?

ednut1:


Voluntary Contributions are additional contributions you can add to your mandatory pension contributions. These funds would be deducted from your monthly emolument by your employer and remitted into your Retirement Savings Account (RSA), along with your regular pension contributions.The significant advantage of VC over other savings scheme is the contribution is deducted before tax thereby reducing your tax liabilities. Note that income (not the contribution) earned on Voluntary Contributions is subject to Personal Income Tax if withdrawn within 5 years. It is advisable to withdraw quarterly; bi- annually or yearly and Withdrawal takes 2-3 weeks to process. The contributions are managed like your pensions. The smart workers also pay their bonus into the VC to avoid tax.

TheRealAdonye:
I'm assembling a team of Personal Financial advisers.

You're hereby hired.
Pro Bono, of course.

No, No, No. Don't thank me.
You're welcome.

proficienc:
Nice piece but the voluntary contribution idea doesn't sit well with me. There's penalties for withdrawing your money before retirement and you get hit by tax too.
I think I'm open to the idea of T-bills though. I know people that do it but the return isn't something to jump about. The comforting part is the fact that my money is safe.
Ednut, Abeg give 2 T-bills mak I manage am jare

funkystanl:


I beg to correct there are no penalties for withdrawing the pension voluntary contribution before retirement. You only suffer tax (which you have avoided) if you withdraw your contribution within 5 years.

funkystanl:


Nice piece ednut. Please can you explain better the sentence in italics bold.

proficienc:
Nice piece but the voluntary contribution idea doesn't sit well with me. There's penalties for withdrawing your money before retirement and you get hit by tax too.
I think I'm open to the idea of T-bills though. I know people that do it but the return isn't something to jump about. The comforting part is the fact that my money is safe.
Ednut, Abeg give 2 T-bills mak I manage am jare

ednut1:
scheme has been abused of recent. rumour has it that the tax man wud soon release a circular/ law, only 33% of ur net pay can go into vc and the withdrawals will be limited to once or twice a year.

daywalker12911:

Tax is on profit made on the voluntary contribution and not the contribution.
Trust Nigerian to always do VC when it's time for profit sharing.
If you don't do VC on ur yearly bonus you need serious deliverance

daywalker12911:

Tax is on profit made on the voluntary contribution and not the contribution.
Trust Nigerian to always do VC when it's time for profit sharing.
If you don't do VC on ur yearly bonus you need serious deliverance

MarvellousGod:
Tbills, bonds and mutual funds are my best investment instruments. ...

Jamean:


I prefer tbills, fixed deposits and forex trade. Osusu, cooperative abi na ajor is not my thing

MarvellousGod:
fixed deposits don't pay as much as tbills & bonds.. lol @ osusu.. it's not my thing too... I don't know much about forex trading but I heard it's profitable if you know the business well....

Jamean:


Well, getting a good rate is key.

Have a good Sunday

coolbibz:
Ednut1, thanks for this post. Please I've got some questions to ask.

•Upon resignation from a firm, do you get paid both your VC and pension or just VC?

•Can one withdraw from a mutual fund investment at any given time? Upon exit, would interest also be prorated, or you'll just need to pay a certain percentage of the overall transaction value as fee?

•Given a rate of say 11% on a mutual fund investment, and you fund your account every month with a sum of 20,000 Naira, what would be the accumulated amount in 3 years? how exactly would the interest be compounded? I did a rough calculation, but it isn't making sense to me.

Don't be vexed if my questions come across as lame abeg. Thanks for your anticipated response.

adeoti01:
Ednut1 I hope your door is open for *face2face* disco on this...cos this financial stuff is giving me headache..."Money slow to enter,money quick dey go"...reply asap....

ednut1:

1. you have 100% control over your VC can can withdraw all when u wish to. for your pensions you are entitled to 25% of your balance after some time( afta 3 months if am nt mistaken) when u resign and the rest till ur 50.

2. a money market fund has a minimum holding period of 30 days( if u liquidate within 30 days there is a charge of 0.5% on the value as at dat date), some others like equity has 2-3 months holding period. the interest is earned daily ( prorated). the balance when you liquidate ( principal+ accrued interest) is yours.

3. the interest on a money market mutual fund is earned daily.( the interest rates moves or can be constant for a few days).
lets assume you invested 50k today and the rate is 12.35% for d day. u get N16.9 ( 12.35% *50000 , den divided by 365 days.). day 2 assume d rate is now 12.40%. your interest is for day 2 is now 12.40%*50016.9 divided by 365 days. and so on. lets assume u added 20k on Day 16 when d rate was 12.35%. your interest will be calculated as thus 12.35% *70300 divided by 365 daya( 50k+20k+ 300( assumed accumulated interest)

coolbibz:


Thanks alot. It's the same way I did my calculation; the interest small for my eye lol

ednut1:
better pass savings account or inside pillow or mattress na , and its withholding tax free

MissJennifer:

Nice piece, I read somewhere that you can invest as low #10,000 in Tbills( actually it was an advertisement for FG Tbills) but your post says otherwise, how so?