News Africa07 Oct 2019

Kenya:Residents underestimate their retirement funding needs

07 Oct 2019

Only a third of Kenyans are adequately prepared for retirement, with the majority of them hoping to retire at the age of 58, said Association of Kenya Insurance executive director Tom Gichuh.

Furthermore, Kenyans think that they only need 20% of their last drawn salary to finance their retirement expenses, while the ratio should be anywhere between 70-75%, said Mr Gichuh.

The low preparedness level for retirement is attributed to several factors such as high cost of living, not having enough income to save money, lack of a savings discipline, lack of financial advice and lack of investment ideas or options, reported the newspaper The Star.

Geographically, populations in Nyeri, Meru, and Kericho had the highest levels of retirement preparedness while those working in formal employment were more prepared than those in informal employment. Residents in rural areas are slightly better prepared for retirement than those in urban areas. Women reported being more prepared than men at 31% and 27% respectively.

The report also indicates that most Kenyans want to be involved in income-generating activities and that they do not favour the option of relying on their children to take care of them in retirement

Many Kenyans point to their savings as their major fall back plan while preparing for retirement.


 

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