Retirement is not like a fairy tale where the characters live happily ever after, it is a whole different story altogether. And, according to the latest industry report by the Association of Kenya Insurers (AKI), up to seventy-one percent of Kenyans remain unprepared.
However, nobody wants to continue toiling past their prime years. Kenyans indicated that they would be ready to retire at the age of 58 – 60 years.
The AKI report notes that despite not having put up any concrete plans in place, the overwhelming majority are of the assumption that they will live out their golden lives enjoying the fruits of their labor, their savings.
But in a country where only one percent of bank accounts have more than a million shillings according to the CBK, that assumption is easily the equivalent of building castles in the air.
Only twenty-nine percent indicated that they were well prepared for retirement, the report says.
Globally, social security is in most cases the main leg of the retirement stool, designed to prevent citizens from falling into poverty after retirement.
Back at home, social security through the NSSF emerged as the most popular retirement savings plan in the country. Others included employer benefits, personal contributions to pension schemes and annuities.
Kenyans living in urban communities were seemingly more aware of other savings plans aside from the NSSF, compared to those living in rural areas.
Younger Kenyans (18 -24 yrs.) however, had little or no idea about employer-provided benefits. This comes as no surprise considering the high unemployment rate among the youth in the country, meaning lower exposure to employment opportunities.
But rarely do Kenyans meet their savings goal at the time of retirement and most of them result to moving the goal post further. It is the reason why seventy-nine percent indicated that they would want to start a business after retirement to meet their daily needs.
The AKI report now recommends that Insurers design tailored products that can be helpful in preparing Kenyans who wish to start businesses after retirement, so they know their way forward. Click here to read the full report.