This archive report was first published on 26 September 2019.
According to a study conducted by the Association of Kenya Insurance, only a third of the country's population is adequately prepared for retirement. The majority of Kenyans hope to retire at the age of 58.
The study, which covered 10 regions in Kenya, including Nairobi, Mombasa, and Kisumu, revealed that the low preparedness for retirement is due to several factors, including high cost of living, lack of saving discipline, and lack of financial advice.
Interestingly, residents from rural areas are slightly better prepared than those in urban areas, with 32% of rural residents prepared for retirement compared to 27% in urban areas.
Association of Kenya Insurance Executive Director Tom Gichuhi expressed concerns over the low levels of preparedness, noting that a retired person needs up to 60% of their last salary per month to maintain their existing standard of living.
"Kenyans think that they only need 20% to finance their expenses when they retire, but it should be anywhere between 70-75% of what you used to earn before you retire," said Gichuhi.
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.
Many Kenyans have pointed to their savings as their major fall back plan while preparing for retirement, with more than half of the respondents referring to the National Social Security Fund (NSSF) as their source of income when they retire.
Looking at gender differences, females reported being more prepared than their male counterparts, with 31% of females prepared for retirement compared to 27% of males.
