On November 19th, 2024, a webinar hosted by the Uganda Institute of Banking and Financial Services (UIBFS) in collaboration with the Uganda Retirement Benefits Regulatory Authority (URBRA) provided valuable insights into the common mistakes many people make when planning for retirement. The event, part of the annual awareness campaign focused on “Sustainability and Personal Finance,” attracted over 150 participants, including key figures from Uganda’s banking and financial sectors.

Moderated by Ms. Lydia Mirembe of URBRA, the session featured Mr. Benjamin Mukiibi, Chief Manager for Planning, Research, and Strategy, who shared his expertise on how individuals can avoid common pitfalls and build a more secure financial future. The webinar emphasized the importance of proactive retirement planning and strategic decision-making.

Mr. Mukiibi identified several critical mistakes that can hinder effective retirement planning. One of the most common errors is delaying the start of retirement savings. Waiting too long to begin saving reduces the time available for compound interest to grow, ultimately leading to inadequate retirement funds. Many people also fail to fully anticipate the range of expenses they will face in retirement, from healthcare to daily living costs. This lack of foresight can leave individuals struggling to maintain their desired standard of living when they no longer have a steady income.

Additionally, focusing on a single type of investment, such as real estate or fixed deposits, can limit growth and increase risk, while neglecting inflation’s impact on savings can leave retirees with less purchasing power over time. Lastly, healthcare costs, which tend to rise significantly with age, are often overlooked in retirement plans, potentially leaving retirees financially strained when medical expenses inevitably increase.

Mr. Mukiibi stressed the importance of starting retirement savings as early as possible to take advantage of compounding. Even small, regular contributions can make a significant difference over time. He also encouraged participants to regularly review and adjust their retirement plans to reflect changing

circumstances, such as shifts in income, expenses, or economic conditions. Seeking professional advice was another key takeaway, as financial advisors can offer tailored strategies and help individuals navigate complex financial products. The importance of including healthcare and insurance costs in retirement planning was also highlighted, with Mr. Mukiibi recommending comprehensive insurance policies and emergency health funds to reduce the risk of financial strain later in life.

In addition to these strategies, the webinar showcased real-world examples to emphasize the importance of early action and diversification. One case study compared two retirees: one who began saving in their 20s and another who started in their 40s. The difference in their financial security was a powerful reminder of the value of early preparation. Another case study demonstrated the benefits of a diversified investment portfolio, which helped one retiree achieve a more stable income compared to another who relied solely on fixed deposits.

There are actionable recommendations for individuals, financial institutions, and policymakers. For individuals, the message was clear: start planning early, save consistently, and seek professional guidance to create a retirement plan tailored to your needs. Financial institutions were urged to develop products that encourage early savings and to promote educational initiatives on retirement planning. Policymakers were encouraged to implement policies that incentivize retirement savings, such as tax benefits or matching contributions, while also supporting financial literacy programs to improve public understanding of retirement planning essentials.

Overall, this was a reminder of the importance of strategic retirement planning and the role that early preparation, diversification, and professional advice play in securing financial independence for the future. With the collective effort of individuals, financial institutions, and policymakers, Uganda can foster a culture of informed and proactive retirement planning, ensuring that future retirees can enjoy a comfortable and financially stable life.