For many Nigerians, retirement isn’t something you plan for — it’s something you assume your employer is handling. If a pension deduction leaves your salary each month, you figure that’s covered. And if it doesn’t, retirement feels like a problem for “old age,” far off enough to deal with later. Either way, the saving never really starts for many earners. So, if these describe you, you’re in the majority.
Unfortunately, the bills don’t retire when you do. So when’s the best time to start saving for retirement in Nigeria?
The best time to start saving for retirement in Nigeria was the day you earned your first Naira. The second-best time is today, whatever your age, your income, or whether you already have a pension.
Thanks to compound interest, the earlier you start, the less you have to set aside to reach the same place. At around 18% interest a year, ₦20,000 a month from age 25 grows to roughly ₦690 million by 60, versus about ₦18 million if you wait until 45.
This guide covers when to start saving for retirement, how much you realistically need, where your Retirement Savings Account (or RSA) fits (and where it doesn’t), and a decade-by-decade plan to get there — whether you earn ₦80,000 or ₦800,000.
Why is today the ideal age to start saving for retirement?
The ideal age to start saving for retirement is always as early as possible (usually your 20s) because of one thing: time. Compound interest is the engine of wealth-building, and time is its fuel, because the money you save in your 20s has 30 to 40 years to grow on its own.
To illustrate, let’s say you save ₦20,000 a month and earn around 18% a year on your savings. By age 60, you’d have roughly:
| Start age | Monthly saving | Retirement savings by age 60 |
| 25 | ₦20,000 | ~₦691.6 million |
| 35 | ₦20,000 | ~₦114.7 million |
| 45 | ₦20,000 | ~₦18.1 million |
Same money, same rate — yet starting at 25 leaves you with nearly 38 times more than starting at 45, purely from extra time in the market.
One caveat: inflation will erode the value of that ₦691.6 million over the years, so it won’t go as far in the future as it does today. This very reason is exactly why many experts recommend increasing your savings over time and keeping some money in dollars.
The truth is, “I’ll start when I earn more” rarely works either: to simply match the 25-year-old’s ₦20,000 a month, someone starting at 35 needs over ₦120,000 a month. However, while a bigger salary helps, it can’t buy back lost years.
Where you save matters too — an ordinary bank paying 4 to 6% can’t outrun Nigerian inflation, so a high-yield home for your savings should be part of the plan.
How much do you actually need to retire in Nigeria?
Knowing how much you require to retire is the big, scary question, so let’s make it easy to start. The global 4% rule (suggested by financial adviser William Bengen in 1994) says you can withdraw about 4% of your savings a year in retirement for roughly 30 years. Flip it around, and your “retirement number” is your yearly spending times 25.
In Naira, this translates to:
| Monthly income in retirement | Pot you need (25×) |
| ₦100,000 | ~₦30 million |
| ₦200,000 | ~₦60 million |
| ₦300,000 | ~₦90 million |
Because inflation runs hot and the Naira slides downwards, many Nigerians plan even more cautiously — around a 2 to 2.5% withdrawal across 20 to 30 years of retirement. That lower rate is the heart of Naija FIRE, our optimised-for-Nigeria take on financial independence: you aim for a bigger pot (and income that rises with inflation) so your savings can actually outlast it.
The full breakdown lives in our Financial Independence, Retire Early guide if you want to go deeper.
Is your RSA enough to retire on in Nigeria?
A Retirement Savings Account (RSA) is the pension that almost every formal employee in Nigeria holds under the Contributory Pension Scheme, overseen by the National Pension Commission (PenCom), Nigeria’s pension industry regulator. Each month, about 18% of your gross salary (10% from your employer and 8% from you if you’re formally employed) is contributed to it and managed by a licensed Pension Fund Administrator (PFA) until you retire.
It’s automatic, regulated and hard to raid on impulse — which makes it the strongest retirement foundation most salaried Nigerians have. And since PenCom’s new Personal Pension Plan (PPP) launched in September 2025, the self-employed and informally employed can finally open one too.
If you don’t have a pension yet, getting into the system is step one.
Why your RSA alone isn’t enough
Here’s the catch: for most Nigerians, the formal pension is either thin or missing entirely. The majority of the workforce falls outside it, and PenCom says more than 75 million informal workers face retirement with no pension at all.
Even when you do have an RSA, the average contribution is dependent on income and may be too small. Plus, many employers under-remit or pay late (so it’s worth checking yours is actually being funded).
None of this makes the RSA bad — it just makes it the foundation, not the finish line. You still have to build on top of it.
How to top up your pension with AVCs and the PPP
Two upgrades are worth knowing when building up from your RSA:
- If you’re formally employed, you can top up your RSA with Additional Voluntary Contributions (AVCs) — extra, pre-tax savings deducted alongside your normal contribution.
- If you’re self-employed or informal, the Personal Pension Plan (or PPP) lets you run a pension yourself: half of each contribution stays accessible after a few months, half is locked for retirement, and you can even open one for your children.
There’s a bigger reason to take this on yourself, too. According to the Piggyvest Savings Report 2025, more than three in five income-earning Nigerians pay black tax, and only 6% feel financially secure. Building your own retirement fund is an act of intergenerational mercy — so your children don’t become your pension plan.
As Piggyvest co-founder Odun Eweniyi put it: “When savings decline broadly, households become more fragile, the economy loses a critical source of domestic capital, and inequality widens — not just between rich and poor, but even within the same income brackets.”
How to start saving for your retirement in Nigeria
Your RSA or PPP is the foundation; Piggyvest is the floor, walls and roof you build on top — it doesn’t replace your pension; it completes it. Here’s a four-step plan you can start this week.
- Build your emergency fund first. About 6 in 10 Nigerians have no emergency funds. Without one, the first real crisis sends you raiding your retirement pot. Aim for 3 to 6 months of expenses before anything else.
- Automate your “personal pension pot.” On the day your salary lands, auto-transfer 5 to 10% into a dedicated PiggyBank labelled “Retirement.” PiggyBank earns up to 17% interest annually right now, paid monthly (rates move with the CBN’s benchmark, so check the app for the current figure). Make saving as automatic as breathing.
- Lock it away to beat inflation and temptation. As your PiggyBank grows, move chunks into SafeLock and send every windfall — a bonus, an aso-ebi refund — straight in. SafeLock pays up to 19.5% a year (longer locks earn more), with interest upfront or at maturity.
- Grow it for the long haul — and hedge the naira. Once the habit is solid, route long-term money into Investify‘s pre-vetted opportunities (real estate, fixed income and more, from ₦5,000, with returns up to 35% a year), and keep 20 to 30% in dollars via Flex Dollar (up to 7% a year) to protect your purchasing power. Use Target Savings to name the goal (“Retire by 60 — ₦30M”) and watch it fill.
That’s the whole engine — all that changes with age is the gear you’re in.
How to save for retirement at every age
The four steps don’t change with age — only the intensity does:
1. Saving for retirement in your 20s
Automate even ₦5,000 to ₦10,000 from your first paycheck — over 35-plus years, the compounding is extraordinary. Build your emergency fund, and if employed, confirm your RSA is funded.
Reframe it: at 25, you’re not “saving for old age,” you’re buying future financial independence.
2. Saving for retirement in your 30s
Rent, kids and black tax tend to land at once, so make saving non-negotiable and automate it before you spend a kobo. Push towards 10 to 15% of your income. If you’re formally employed, start AVCs; if self-employed, open a PPP; once your emergency fund is set, layer in Investify.
3. Saving for retirement in your 40s
Feeling behind in your 40s is common, but these are often your strongest earning years, so put them to work. Save more aggressively (15 to 20% or more), funnel every bonus into Piggyvest (like SafeLock or PiggyBank), audit your RSA balance, and start a dollar hedge for the next 15 to 20 years.
4. Saving for retirement in your 50s
Starting at 50, with 10 years to go, still meaningfully boosts your retirement income. The worst move is doing nothing because it “feels late.” Shift towards steadier savings like SafeLock and dollar investments (using tools like Flex Dollar), work out your real retirement number and the gap left to close it, and map your future income streams.
5. Saving for retirement in your 60s
The focus moves from growth to preservation and a steady drawdown. Formal retirees can discuss programmed withdrawals or an annuity with their PFA; if you’re self-employed, your personal pot is now your main pension — a smart time to sit with a financial adviser.
Whatever decade you’re in, the move is the same: start, automate, and let time do the heavy lifting.
The bottom line
The best time to start was your first paycheck. The second-best time is today. Start with what you have (even ₦5,000), let your RSA or PPP be the foundation, and let your personal pot make retirement comfortable. The pension coverage gap is a national problem, but it’s one you can work towards, one automated transfer at a time.
So pick one thing today: automate ₦5,000 to ₦10,000 into a PiggyBank labelled “Retirement,” or use the Piggyvest Savings Calculator to see how much to save each month. Future-you is counting on this one decision.
The articles on the PiggyVest Blog are developed by seasoned writers who use original sources like authoritative websites, news articles and academic journals to perform in-depth research. An experienced editor fact-checks every piece before it is published to ensure you are always reading accurate, up-to-date and balanced content.
- National Pension Commission (PenCom): RSA, AVC and Personal Pension Plan
- Punch: Over 75 million informal workers face retirement without pensions — PenCom DG
- Central Bank of Nigeria: Inflation Rates
- Piggyvest Savings Report 2025
- Premium Times: Nigeria's life expectancy ranked lowest globally
- Techpoint: PiggyVest reports ₦1.3 trillion in payouts and over 6 million users in 2025
- Vanguard: PenCom's new Personal Pension Plan for informal workers (September 2025)
- BusinessDay: PenCom contributions data (average remittance per RSA)
