By the time many people begin to think seriously about retirement, they are already halfway through their working years, juggling responsibilities, probably chasing promotions and wondering if they are doing enough to have a better later day.
On the flip side, some have romanticised retirement into a singular picture that would look like you buy an eight-acre plot in Kamulu or two acres in Nanyuki, set up a modest home, plant fruit trees, maybe keep a few dairy cows.
Financial experts say comfort should be an important factor when planning for retirement. One, they advise, should aspire for the kind of comfort where monthly bills are covered, medical costs do not send one knocking on WhatsApp groups to fundraise, children’s education does not become a burden, or burden children with monthly bills.
Start early
Moses Ananga, the Head of Treasury and Custodial Services at Credit Bank, says the starting point is to look at one's life journey since investment evolves with every stage of life.
For instance, someone just starting their career is in a better position to embrace long-term investments.
“This is a person who has not much cash outlay. They can take risks on things like equities and land,” he says.
Once a person approaches their 40s or 50s, the tone changes because the runway to retirement is shorter and the risky ventures narrow.
“At this age, you cannot afford to invest in a risky climate. Look at something that will give a constant income, and you are assured that whatever you’re investing in, you’ll be able to get back,” Mr Ananga explains.
Retirement planning, he notes, isn’t about finding a one-size-fits-all product. It’s about understanding your personal situation, your goals and how much time you have to reach them.
“I don’t like classifying investment as if it fits all. Mostly it depends on the person, because people are in varied fields.”
One piece of advice Mr Ananga is keen to emphasise is to invest only in what you understand.
From a financial planning perspective, investments fall under two categories: the traditional and the alternative.
Traditional investments, he says, include equities, bonds and collective investment schemes, while the alternative investments could be land, real estate or other tangible assets.
“If you have an interest in real estate, you can either directly invest by buying land, building or selling. You also have the option of going through the indirect ownership route, which is reit (real estate investment trust) through the capital markets.”
He points out that collective investment schemes (CIS), such as money market funds, balanced funds, equity funds and fixed income funds, offer an accessible way for many people to invest without needing large sums of capital upfront.
“The advantage of going through the CIS is that they get a competitive rate of return because the fund manager can negotiate a higher rate with the banks.”
The benefit of such pooling is not just better returns. These funds are professionally managed, with a fund manager and a trustee whose roles are to look after investors’ interests. This kind of structure ensures that even the investors with limited financial knowledge can benefit from expert decision-making.
Should someone in their 50s jump on the CIS investment bandwagon?
At this age, the approach, Mr Ananga says, needs to be much more cautious but not defeatist.“There is no late time for someone to invest,” he says.
In the sunset years of a career life, preserving capital while generating stable returns becomes paramount.
Mr Ananga says retirement shouldn’t only be about money; it's about lifestyle continuity and health preparedness.
Credit Bank, Head of Treasury and Custodial Services, Moses Ananga, during an interview at his office in Westlands, Nairobi, on May 16, 2025.
Photo credit: Wilfred Nyangaresi | Nation Media Group
“As you get older, diseases will crop in. You need to ask: How am I able to meet that need? Do I have insurance cover at the end of my career because once you retire in your 60s, most insurance companies will shy away. They’ll see you as a high risk,” he says.
Life insurance
“Life insurance serves different purposes. There’s protection, investment, conservation and protection of wealth,” says Sam Ogola, the National Sales Manager at Absa Life.
A life insurance policy is a contract between an insurance policyholder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.
Mr Ogola has seen a growing number of people, especially among Small and Medium Enterprises and self-employed individuals, turn to life insurance as a retirement strategy.
“Do you want to be a retired person who is still managing tenants?” he asks. “Or do you want to fix your mind on a policy that you know will generate this much? I see a lot of our clients who are in the real estate space. They take whatever they make from rent or income and buy policies,” he says.
Life insurance, he says, can become both a saving and investment tool, especially to individuals who don’t have structured salaries or employer-driven pensions. The discipline of consistent premiums and the guarantee of protection make these products attractive.
What if one is employed and already have a pension scheme?
Mr Ogola says even then, it’s not enough. “If you’re employed, I’m sure that pension will not be sufficient when it comes to retirement, because the cost of living is going up. You can use insurance as a backup to augment what you already have in terms of pension.”
Among these products is the endowment plan, which does more than just protect. “It provides savings or investments and protection in the event of risks happening. The risks covered are death, disability and critical illness,” Mr Ogola says.
Instead of waiting for an emergency to fundraise, this policy builds a solid financial wall around the policyholder's life and their loved ones.
Mr Ogola adds that last expense covers can extend protection to the entire family, covering up to 17 people in some products.
A last expense cover pays a funeral cash benefit to help the family cover funeral expenses. Insurance companies offer lump sum payments to beneficiaries in the event of the death of a covered member, which provides financial relief during grief.
Mr Ogola demystifies the types of insurance policies: term life, whole life, endowment and investment-linked products.
“Term life, strictly looks at covering risk; if nothing happens to you within that one year, then there’s no payout. It is very good because it’s cheaper than most of the other covers.”
Absa Life Assurance National Sales Manager Sam Ogola during an interview at his office in Westlands, Nairobi, on May 16, 2025.
Photo credit: Wilfred Nyangaresi | Nation Media Group
Then comes whole life, “It means that we are covering the risks, but until it happens, like in the case of death.”
The real sweet spot for retirement planning is endowment and investment-linked policies. “An endowment cover will combine risk and savings. On one end, you pick a term of, let’s say 15 years. If nothing happens to you on the 15th year, you get your maturity benefit.”
Investment-linked products go a step further as they mirror the returns and volatility of the market. “The upside is quite high. However, the risk is high as well. For endowment products, the risk is moderate.”
How does one choose what suits best?
Mr Ogala suggests beginning with the basics, things like one's retirement horizon, age, risk appetite and income consistency.
“The first thing to consider is, how many years do you have to retire? If you have 20 years, you plan around the 20th year. You need to look at your age as a factor and do your own risk analysis. The third thing is that you look at the flexibility of the product. What happens if the music stops along the way and you’re unable to pay?”
Additionally, the insurance expert says some policies come with escalation components which help shield you from inflation.
