If you want to make the right investment plan, you should start thinking about retirement plan at an early stage . It is important to find the right form of income at old age for you and your dependents. In this article we explore what a Kenyan should pay attention to and give helpful tips for retirement planning in Kenya.
What is retirement savings and why is it important?
Retirement planning is a good step to ensuring you have income as a financial security for the old-age years of your life. Kenyans are comparatively complacent when it comes to retirement planning. Poverty in old age threatens more and more people in Kenya.
Earlier, we provided a guide to saving with NSSF, the country’s pension insurance (NSSF). However, NSSF alone is often not enough to maintain a good standard of living in old age. The bottom line is that the statutory pension is often lower than what you paid in yourself. It is therefore important to consider private retirement plan products such as fund savings plans or life insurance in addition to the state pension insurance.
Get professional advice to select the right pension plan for you
Professional advice is an important step in finding the right pension plan. Most people have no idea where to start when it comes to planning their retirement savings. A financial advisor can help you identify your goals and create a plan to achieve those goals.
There are different types of financial advisors, so make sure you choose the right one for your needs. Many banks and credit institutions offer advisory services, but not all are equally qualified. Look for a consultant who has a certification and/or degree in financial planning. There are many independent advisors.
Also, make sure the consultant you choose has experience in the Kenyan industry. Ask for references and check the consultant’s website. Make sure the advisor has worked with a variety of investors and has extensive knowledge of different investment products.
A good financial advisor in Kenya should be open about their fees. Look for an advisor who is transparent and doesn’t charge hidden fees. Ask for a quote for the consultant’s services and make sure all fees are included in the quote.
Don’t forget that you are ultimately responsible for your retirement savings. Let your gut instinct guide you and choose the advisor you trust the most. Don’t hesitate to contact and compare several advisors before you decide.
What types of retirement pension plans are available in Kenya?
Funds are a good way to invest your savings with a high return. With a fund savings plan, the money is invested in mutual funds. Mutual funds are collections of different securities and other investment products. They therefore offer a high degree of flexibility and can be tailored to personal needs.
Life insurance is also a good way to provide for old age. With a life insurance policy, a policy is taken out in which it is agreed that the insurance company will pay out a certain sum to the relatives or to the insured person in the event of death or in the event of a need for care.
So there are different ways to save for old age. Which retirement plan is the right one depends on personal needs and individual assets.