Wallet Wellness: Ways to Avoid Retiring With No Money

Taking advantage of employer matching, tax savings offered by government, where to keep your money and more tips to secure your future.

Greetings, and welcome to the seventh edition of Wallet Wellness in 2024 - your midweek source of practical financial tips to elevate your money management skills!

Are you thinking about your retirement? Or better still, do you have a plan? Today, we are taking a pause to have a glance at our retirement plans.

We hope you had a chance to check out the last edition where we explored 7 Main Types of Income Streams - they will come in handy in your retirement planning.

As always, be sure to check out the Concept Corner below for a deep dive into the money concept of the week.

Let’s dive in!


7 Ways to Avoid Retiring With No Money

Planning for retirement is often overlooked in Kenya, due to a combination of factors such as high unemployment rates, low wages, and the rising cost of living.

Many individuals struggle to meet their daily financial needs, leaving little to no room for saving for retirement. 

Additionally, the lack of financial literacy and awareness about retirement planning options further contributes to the low priority placed on securing a financially stable retirement.

However, despite these challenges, it is crucial to recognise the importance of retirement planning and take deliberate steps to overcome these barriers.

To help you get started, here are some tips to ensure you have a comfortable retirement: 

1. Start Saving Early

It's never too early to start saving for retirement. Even small, regular contributions can grow significantly over time due to compound interest. Saving early also provides a buffer against unexpected financial challenges later in life.

  • Establish clear goals: Define your retirement objectives and desired lifestyle early on. 

  • Set up automatic contributions: Ensure consistent saving habits.

  • Adjust over time: Learn about different retirement savings vehicles, investment options, and strategies. Read More.

2. Utilise Retirement Savings Plans

Take advantage of employer-offered retirement savings plans such as pension schemes or open an individual retirement account. Some employers match your contributions, including with NSSF, which can accelerate your savings. 

  • Tax Benefits: Contributions to registered Retirement Benefit Schemes (RBSs) are tax deductible up to Ksh240k per annum.

  • Tax-free Withdrawals: If you join an unregistered RBS, you give up tax incentives today for tax-free withdrawals in retirement 

  • Maximise employer matches: Aim to contribute the maximum allowed and take advantage of employer matching. Free money! Read More.

3. Monitor Your Expenses

Understanding your monthly expenses can help you plan for retirement. You don't have to give up all your luxuries, but cutting down on unnecessary spending and allocating more towards retirement savings can go a long way. Read More.

  • Use budgeting apps: Track expenses easily on your smartphone.

  • Categorise expenses: Identify areas for potential savings.

  • Conduct periodic reviews: Adjust spending habits as needed. Read More.

4. Plan for Healthcare Costs

It's important to keep in mind that healthcare expenses tend to rise as you age. Therefore, it's crucial to factor in potential healthcare costs when planning for retirement. By doing so, you can avoid financial strain later on. Read More.

  • Research options: Understand medical coverage and premiums.

  • Consider supplemental insurance: Consult a professional and fill gaps in coverage.

  • Build an emergency health fund: Prepare for unexpected medical expenses. Read On.

5. Diversify your investments

Putting all your retirement savings into a single investment can be risky. Diversifying your investments can reduce risk and increase returns. Read More.

  • Allocate assets strategically: Don’t get too caught up with returns and overlook risks

  • Liquidity: Don’t go hard on illiquid investments. Cash will be necessary too!

  • Consider alternatives: Explore options beyond stocks and bonds. Read On. 

6. Consider Real Estate Investments

Investing in real estate can be a valuable asset for retirement planning. Property can provide passive income in the form of rental income or be sold for profit. Read More.

  • Research rental market: Assess potential rental income and expenses.

  • Consider REITs: You can own real estate without buying land or building. Learn More About REITs.

  • Plan for maintenance costs: Budget for upkeep and repairs.

7. Stay Informed and Adjust Your Plan

Review your retirement strategy, changes in the economy, and investment opportunities periodically to ensure you're on track to meet your goals. Personal circumstances may change over time too, requiring adjustments. Read On.

  • Follow financial news: Stay updated on market trends and developments.

  • Review retirement plan annually: Adjust strategies based on changing goals or circumstances. Don’t be rigid. 

  • Track legislative changes: Updates or changes to tax laws, retirement regulations, and government policies may impact your retirement plan. Learn More.

8. Consult a Financial Advisor

Don't hesitate to seek advice from a financial advisor who understands the Kenyan market. They can help you create a personalised retirement plan and make informed investment decisions. Read More.

  • Research advisor credentials: Look for certifications and experience.

  • Discuss retirement goals: Communicate objectives and concerns clearly.

  • Avoid high-pressure tactics: Seek advisors who prioritise education and empowerment rather than pressuring you into decisions. Learn More. 

Planning for retirement may seem daunting, but it's an important step towards a secure future. By starting early, taking advantage of retirement savings plans, diversifying your investments, monitoring your expenses, and seeking professional advice, you can enjoy a comfortable retirement in Kenya.


Time Value of Money

Time value of money is the idea that money you have right now is worth more than the same amount in the future because of its likely earning capacity. It then means, you have to utilise what you have today well. Learn More.

Money and Me

Money and Me: Tales of a Lonely, Retired Pensioner in the Village

How far along in life are you? Are you in your mid-20s, mid-30s? Well, add three decades to that figure. I’d suppose that’s your probable retirement age. How do you see your life at that age? In this first-person narration, we see life through the lenses of the writer’s retired high school English teacher. Read On.


Do You Really Need That Loan?

More Kenyans than ever before are taking loans. With loan being accessible at the click of a button, it may be an easy choice whenever a financial need arises. In today’s MoneyTok, we explore 5 things to consider before taking any loan. Watch Video.


5 Things to Consider Before Taking Any Loan #Money254 #Personalloans #MoneyManagement #Fyp #Moneytok #personalfinance

That's it for the seventh Wallet Wellness edition of 2024! We hope these financial tips have added some energy to your mid-week hustle. Stay tuned for more practical insights in our next edition of "Wallet Wellness" next week and watch out for Money Weekly on your inbox this Friday.

Also, don’t forget to download the Money254 App on the Google Play Store, and remember that we can help you compare over 300 loans, savings accounts, current accounts, and more if you’re thinking about your next product.

Cheers to your wallet's well-being!

Eric and the Money254 editorial team.


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