By Barbra Teddy Arimi
The National Social Security Fund introduced a Voluntary Membership Plan four years ago, to enable employers and workers that are not compelled by the mandatory provisions of the NSSF Act an opportunity to voluntarily save for their retirement. This is one of those savings platforms that can lead you to the millionaires’ club even in your 20s, as you are just starting to make money.
When you think of your 20s, savings are rarely the first thought that comes to mind. We have many other activities and thoughts vying for our attention and time that we often neglect this important aspect of life that will play a vital role going forward. Some of the seemingly more pressing needs may include rent, airtime, transport and leisure activities. While it is understandable that savings may not be at the top of our priority list during this exciting point in our lives, it certainly deserves more attention than it is often given.
Saving may seem like a big sacrifice but it is not. Like starting a new diet, it may seem difficult at first but gets easier as you go. Additionally, the results will be worth your while. Most of the expectations and dreams we have for our lives lie at the other end of saving. The car, the house, the travel and businesses you want to start all rely on how well you save in your 20s.
Not all saving is equal. It is largely dependent on the person, the amount they make, are willing to save and where they save it. You can choose to save large amounts of money or small amounts of money. The great thing about saving, no matter the amount, is the cumulative advantage it provides. Even a small amount goes a long way after a couple of years.
Several solutions exist in the Uganda market. There are banks, insurance savings schemes and work saving schemes. Despite several options, very few are tailored to make it as convenient and affordable for someone in their 20s.
The NSSF Voluntary membership Plan offers one freedom to save from as low as UGX 5000, basing on one’s incomes and aspirations. It also provides the flexibility for you to change the amounts you are saving when your incomes change. Topping it all off is an unmatched interest rate usually two digits above ten year inflation. In the last five years, the interest rate varied between 10-12%. Most of the other offers by banks pale in comparison averaging about 6.5% in 2021.
Employers with less than 5 employees, and their employees are eligible to join this plan. Former NSSF members, whom the Fund already paid their respective benefits, but are still able and willing to save with the Fund also qualify to join the Voluntary Membership plan.
For those who are self-employed, under the current law, you must first register your company/business, after which you would then be eligible to enroll for the plan under Voluntary Employers category, even if you are the only employee of your company/business.
At 20yrs old, there are plenty of activities fighting for your attention, time and resources which may make it difficult to think of the future. Irrespective, the future is just as important as or even more important than the present. It is in your best interest to dedicate a small amount to your savings so that you can have the life you want in the near future. To kickstart your retirement saving journey, enrol for the NSSF Voluntary membership plan, by simply going to https://www.nssfug.org/voluntarymembership/ or any NSSF branch countrywide.
You could even start by taking off one weekend of fun a month to gather your savings. If you spend about UGX 100,000 a weekend and saved it over 10years, you would have close to UGX 22 million. Voila, a millionaire in your 30s!
It can only get better, the more you save.
The author is the Head of Marketing and Communications at NSSF Uganda.