RETIREMENT PLANNING: AFTER WORK, WHAT NEXT?

Imagine cruising through your work life worried about your future, especially your retirement, only to get to that stage and get struck by anxiety because you did not plan properly.

Picture meeting up with your peers, seeing them happy and content, enjoying their hard-earned retirement years, while you struggle, whining about how you do not have enough and wishing you had done things differently.

Recent statistics from the Retirement Benefits Authority (RBA) reveal that an alarming 70% of Kenyans aged 40+ have not started saving for retirement. Additionally, the 2024 RBA pension survey indicates that only 40% of retirees are satisfied with their pensions.

The Retirement Challenge: Why Many Struggle

Retirement planning is challenging for those in the informal sector (juakali industry) because their income is unpredictable and they lack access to employer-sponsored plans. Without a consistent paycheck, saving regularly can seem impossible.

Enjoying a comfortable and stress-free retirement requires careful planning. If you are like most people, you may worry about not having saved enough – but the good news is, it is never too late to start!

Securing A Joyful Retirement

Research shows that most people start retirement planning too late and later regret not saving more while they had the chance during their working years. The best approach is to start early and remain consistent.

Key Steps to Retirement Planning: –

1. Decide when to start- The best time to start retirement planning is now. The earlier you start, the more time your money has to grow, reducing the pressure of catching up later.
2. Estimate your future cashflows- Determine how much income you will need in retirement. Consider your current income, expenses, and expected retirement lifestyle. This helps in setting realistic financial goals.
3. Align with your lifestyle and priorities- Factor in your future expenses, liabilities, and life expectancy. Decide how much to set aside monthly to stay on track.
4. Choose the right retirement plan- Everyday financial obligations can make saving difficult, but prioritizing your pension is crucial. Explore different pension schemes and invest in one that fits your needs.
5. Review your plan regularly- Track your progress and adjust your savings plan based on your life changes.

Beyond Money: Other Retirement Considerations

While financial security is a major aspect of retirement planning, other factors contribute to a fulfilling retirement. Two key considerations are:

1. Identity and Purpose:

 During your working years, your career becomes an incredibly significant part of your identity. So, who do you become once you retire? It is important to develop a post-working-phase identity to maintain self-esteem and fulfillment.

2. Connections:

 A fulfilling retirement is not just about money, it is also about mental, physical, and social well-being. If you want to live a meaningful life in your golden years, you need to cultivate strong relationships outside of work.

Final Thoughts

Retirement expectations have changed in the 21^st Century, and relying only on savings or a state-provided pension is no longer enough. The key to a worry-free and enjoyable retirement is starting early, planning wisely, and making informed financial decisions today.

Reach out to us today for a quick, no-obligation needs analysis review so that you can make an informed decision.

Article by Shirlyn Akinyi