One Wise Way to Get a Bigger Paycheck at Retirement

Time really flies, we’re already more than halfway through 2025. Today, we have officially moved closer to 2050 than 2000. But here is the good news, with strategies like making an additional voluntary contribution, you have the golden opportunity to refocus on your long-term financial goals, not just for the rest of the year, but also towards retirement.

If you’re reading this, you probably already have a Retirement Savings Account (RSA). You might even have a retirement plan mapped out. But do you know that making Additional Voluntary Contributions (AVCs) can significantly increase your income at retirement?

AVCs are extra contributions you make beyond the minimum mandatory 8% (employee) and 10% (employer) pension contributions, as stipulated by the Pension Reform Act 2014 and they offer powerful long-term benefits like:

1. Accelerated fund growth over time
2. A robust RSA balance through AVC increases your opportunities to home ownership through an Equity Backed Mortgage
3. Tax relief (if left untouched for at least two years)

Whether you’re just starting your career or nearing retirement, AVCs offer a flexible and smart way to build wealth and gain more financial security.

So, what are Additional Voluntary Contributions (AVC)?

Additional Voluntary Contributions (AVCs) are optional pension deposits you can make into your Retirement Savings Account (RSA). They are not required by law; you choose to make them because you understand the long-term value of growing your pension balance faster. With AVCs, you are in control of your retirement savings. You decide:

• How much to contribute (monthly, quarterly, bi-annually, or when you want)
• When to contribute
• Why you’re contributing (retirement comfort, home ownership, children’s education, etc.)

These extra contributions are invested by your Pension Fund Administrator (PFA) just like your mandatory contributions. This means your AVCs benefit from professional fund management and compound returns, the same powerful principles that grow your pension wealth leading up to your retirement.

We know this might be a bit overwhelming. So, we are organizing a webinar on August 14th, 2025, where our best and brightest will be teaching you everything you need to know about AVCs. If this sounds like something you would want to be a part of, you can secure your spot right here.

How to Set up Additional Voluntary Contributions:

It’s simple, just;

• Decide how much you want to contribute monthly.
• Notify your employer or HR department/Pension Desk Officer to deduct this amount from your salary as a Voluntary Contribution alongside your statutory pension contribution.
• Your PFA receives and invests this amount in your RSA alongside pension.

If you’re self-employed, you’re not left out. You can still make voluntary contributions through the Micro Pension Plan (now Personal Pension Plan) designed specifically for entrepreneurs, freelancers, and informal workers. This offers you the same wealth-building opportunities and access to tax incentives.

Top Benefits of Additional Voluntary Contributions

Here’s why AVCs may be the smartest financial move you make this year:

1. Faster Growth: The more you save, the more you benefit from compound interest over time which could make your retirement fund grow exponentially.
2. Flexible Contributions: You contribute what you can afford, when you can. This flexibility makes it easier to stay consistent and consistency is key to long-term growth.
3. Tax Advantages: If you leave your AVCs untouched for at least two years, you may qualify for tax relief under Nigerian pension regulations. (However, early withdrawals may be taxed.)
4. Smart Long-Term Planning: AVCs are ideal for planning big milestones like property purchases, retirement travel, lifestyle or funding your children’s university education.
5. Increased Financial Security: AVCs give you peace of mind. With inflation and rising living costs, extra pension savings mean more freedom and comfort in retirement.

A snapshot of how AVCs can potentially boost your income at retirement:

Even small contributions, if maintained consistently, can translate into a comfortable cushion to support your lifestyle in retirement.

So, here’s a Wise Takeaway:

There’s no one-size-fits-all approach to retirement planning, but AVCs give you control and flexibility. You can start small and adjust as you grow. What matters is starting now so your retirement funds have enough time to grow.

Make the wise move today for a more comfortable tomorrow. You can set a calendar reminder every six months to review and possibly increase your AVCs as your income grows overtime.

FAQs About Additional Voluntary Contributions in Nigeria

Q: Can I withdraw my AVCs anytime?
A: You can withdraw your AVCs, but if done within 2 years, you may lose the tax relief and may be taxed when withdrawing your additional contributions.

Q: Will AVCs affect my statutory pension?
A: No. AVCs are kept in the same RSA but tracked separately. They complement your pension, but they do not replace it.

Q: Can I pause my AVCs?
A: Yes, you can stop or resume contributions anytime. However, we encourage you to be consistent if you want the best results.

Q: Is there a minimum AVC amount?
A: There’s no national minimum, but some employers or PFAs may require at least ₦1,000 or ₦5,000/month. Try checking with your HR or PFA.

Join Our Upcoming Webinar on AVCs

Do you still have questions? Let’s break it down together. Join our expert-led webinar where we’ll cover:

• How AVCs work
• How to get started
• Real success stories
• Q&A session with our team

Click here to register and secure your spot.

At CardinalStone Pensions, we’re committed to helping you make smart financial decisions. Whether you’re early in your career or close to retirement, we’re here to support your journey to financial freedom at retirement. Because when you say YES to CardinalStone Pensions, you say YES to your dream retirement.