This archive report was first published on 24 September 2019.
Published on September 24, 2019, a survey by the Association of Kenya Insurers has shed light on the alarming state of retirement preparedness in Kenya.
According to the survey, a staggering 70% of Kenyans are unprepared for retirement, with experts attributing this to a combination of factors including high cost of living, meagre income, low level of saving discipline, financial illiteracy, and lack of investment ideas.
Experts also point out that lack of information on pension products and messages on the subject are contributing to the low levels of retirement preparedness in Kenya.
“Majority is not ready for retirement despite the mention of them hoping to have saved enough for when they retire. Only 29% felt that they are well prepared for retirement,” reads the report.
The survey, which covered 10 counties, found that only 2% of Kenyans are seeking information on saving for retirement from professional services, with a majority accessing information through the media and the internet.
Interestingly, the research revealed that those in rural areas believe they are better prepared for retirement compared to those in urban areas.
Experts estimate that a retired person needs up to 60% of their last salary to maintain their existing standard of living through retirement.
While there is a tendency of retirees venturing into business funded by the retirement savings, the study shows that most of such ventures usually fail due to lack of management expertise and knowledge of the business.
The report is recommending a targeted approach to educate the young population on the importance of starting early to prepare for retirement.
