4 retirement mistakes Ghanaians in their 50s should avoid

Retirement planning involves more than reaching the age of 60 or completing a dream home. For workers approaching retirement in Ghana, the decisions they make with their savings, investments and healthcare arrangements can influence how comfortably they live when their regular salaries stop.

In a Facebook, Financial planner, Patrick Baah Abankwa has highlighted several financial mistakes people in their 50s should avoid.

His advice centres on a shift in financial priorities: while younger workers may focus on building wealth, those approaching retirement need to pay greater attention to protecting their capital and maintaining reliable income.

Here are four mistakes to watch out for.

Building a five-bedroom house or completing a large family home can be an important personal goal. However, putting a substantial portion of retirement savings into a property can leave little money available for everyday expenses.

An unfinished house may require additional spending on roofing, plumbing, electrical work and other fittings before it becomes suitable for occupation. Even after completion, homeowners must budget for maintenance, utilities and repairs.

The concern, Abankwa explains, is that a house does not automatically generate regular income to cover groceries, medical bills and other retirement expenses.

People approaching retirement may therefore need to assess whether completing a large property is financially sensible or whether finishing a smaller, comfortable living space would leave more money available for other needs.

The goal is not necessarily to abandon homeownership, but to avoid becoming property-rich and cash-poor.

Some workers begin considering major business ventures in their 50s when they realise their expected pension may not cover all their expenses.

However, investing a large portion of retirement savings in an unfamiliar business can expose them to significant financial losses.

Ventures such as poultry farming, transport operations and restaurants may require substantial start-up capital, specialised knowledge and consistent supervision. Without sufficient experience or a clear understanding of the risks, an investment may fail to deliver the expected returns.

The consequences of losing a large sum close to retirement can be particularly difficult because there may be limited time to rebuild the money through employment income.

Abankwa advises people who want to venture into business to limit how much of their wealth they expose to risk. He suggests keeping such exposure within 10–15% of net worth, although the appropriate amount will depend on an individual's circumstances, financial obligations and risk tolerance.

Before committing funds, prospective business owners should assess the business model, operating costs, expected cash flow and possibility of losses.

Healthcare is another expense people approaching retirement need to consider.

Although Ghana's National Health Insurance Scheme provides access to covered healthcare services, not every treatment, medicine or medical expense is necessarily covered. Older adults may also need ongoing care for chronic conditions, specialist consultations or procedures that require additional payments.

Workers who depend on an employer's medical insurance should establish what happens to that coverage when their employment ends.

Abankwa recommends preparing for healthcare expenses before retirement by setting aside money in a dedicated reserve that can be accessed when needed.

Depending on their financial circumstances, individuals may consider suitable low-risk, accessible savings or investment options for this purpose. They should also investigate available private health insurance plans before retirement, carefully checking eligibility requirements, premiums, waiting periods, exclusions and coverage limits.

Planning ahead can help reduce the pressure of having to find money for unexpected medical expenses after regular employment income has stopped.

Another mistake is assuming that pension contributions and employment records are accurate without checking them.

Errors involving personal details, missing contribution periods or uncredited employer payments can complicate pension processing. Discovering a problem shortly before retirement may leave little time to investigate and resolve it.

Abankwa recommends that workers review their pension records well before they approach retirement age.

Workers should check their contribution history with the Social Security and National Insurance Trust (SSNIT), confirm that their personal details are correct and follow up on any discrepancies. Those covered by occupational pension arrangements should also establish the status of their Tier 2 contributions and identify their pension fund trustee.

People who can afford to save more may also explore voluntary retirement savings, including an appropriate Tier 3 arrangement, after understanding the applicable rules, fees, withdrawal conditions and tax treatment.

It is equally important to estimate the pension income they may receive and compare it with their expected retirement expenses. This can help identify a shortfall early enough to consider additional savings or other suitable sources of income.

Approaching retirement requires a careful review of financial priorities. Completing a dream home, starting a business or relying on an expected pension may all form part of a person's plans, but each decision should be assessed against the need to meet everyday expenses after employment ends.

Abankwa's central message is that people nearing retirement should pay closer attention to protecting their savings, managing risk and planning for regular cash flow.

Starting these preparations early can give workers more time to address pension-record problems, build healthcare reserves and assess whether their savings are sufficient for the years ahead.