Report paints grim picture of Kenyans approaching retirement age
More than 70 per cent of Kenyans are unprepared for retirement, a new research shows.
The research, covering 10 counties, shows people in rural areas believe that they are slightly better prepared than those in urban areas at 32 per cent.
Twenty seven per cent of respondents in urban said they were prepared.
High cost of living, the Retirement Preparedness in Kenya report by Association of Kenya Insurers (AKI) says was to blame for low preparedness.
Speaking during the launch, AKI chief executive Tom Gichuhi said other reasons for low preparedness include low income, lack of saving discipline, lack of financial advice and investment ideas or options.
“Retired persons need up to 60 per cent of their last monthly salary to maintain their existing standard of living through retirement,” he said.
However, according to Gichuhi, respondents did not expect to be poor when they retire.
“The Employees Retirement Benefits Fund can be an important source of retirement income, but it is often not enough to finance the total retirement needs,” he said.
Sadly, according to the report most contributors spend much of their savings within three years of withdrawing their pension funds after retirement.
“One way of avoiding this is by using annuities to provide a guaranteed stream of income for as long one lives,” he said.
Women were more prepared than their male counterparts at 31 and 27 per cent respectively.
The survey, conducted in April this year, featured 586 interviews from Nairobi, Machakos, Nyeri, Mombasa, Kisumu, Meru, Vihiga, Eldoret, Kericho and Garissa.
According to the survey, the National Social Security Fund (NSSF) received the highest level of awareness, at 93 per cent, as a retirement savings plan amongst all study participants, urban and rural alike.
Awareness levels of the other savings plans varied with age and location.