Retirement can mean leaving employment to pursue other interests or businesses.
According to my personal analysis, upon retirement, 47 percent of retirees depend on relatives, 3 percent go back to working, 16 percent depend on state pension and only 34 percent have financial independence.
Interestingly, 82 per cent of those with financial independence (the 34 per cent) have gone back to working due to inflation.
It’s therefore critical to note that only a few retirees can retire comfortably hence employees should consider investing in retirement early.
Important factors to put into consideration when saving for retirement:
- Capital preservation: This means that you invest in a portfolio with low risk factor like treasury bills and certificate of deposits. It’s important for any person preparing for retirement to be cautious not to fall into quick return deals as most of them are scams.
- Instant money: Invest in portfolios where money can be retrieved on need, not necessarily easy withdrawals but accounts like fixed deposit accounts that earn interest.
One can also invest in money markets and annuity in reputable financial institutions like CIC.
- Consistency. This implies that one should invest/ save without fail.
- Ensure your portfolio assets allocation is sufficiently diversified. Invest in different fields in order to minimize risks.
- Hold a sufficient cash reserve.
- Account for inflation: Your investment should earn interest or dividends.
- Seek professional advice on matters investment. Strive to attend pre and post retirement seminars or trainings.
By Paul Ngugi Ruo
The author is a police officer, cooperative champion and post graduate student at the Cooperative University of Kenya
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