Retirement Planning: Can You Afford to Retire?

The Retirement Benefits Authority (RBA) recommends saving between 10% and 15% of your income. This is great, but there is an additional consideration we must all make: your 10-15% may not be sufficient for retirement. The rule of thumb is, aim to replace at least 70% to 80% of your pre-retirement income to maintain your standard of living.

Since July 1st, 2025, early withdrawals from pension schemes have become significantly more punitive. If you’re under 50 and have been in the scheme for less than 20 years, your withdrawal is subject to the following tax treatment:

Example:

[ Working Income / Month] ====> [ Income Replacement Target] ====> [ Ideal Amount/Month]

                    KES 100%               =>          70% – 80%           =>   Calculated as 70-80%

                                                                                                                of your final pre-

               (e.g., KES 100,000)    => (KES 70,000 – 80,000)    =>   retirement pay.

Explanation:

Suppose your current active working income is KES 100,000 per month. To comfortably maintain your standard of living after you stop working, we recommend aiming for an Income Replacement Target of KES 70,000 to KES 80,000 per month. This means, if you live for 40 years after retirement, you will need to have saved up about KES 38 Million.

Ponder this:

1. How far away from your ideal retirement kitty are you?

2. How much do you need to save per month to hit this target?

3. What can you do with the time remaining to achieve this goal?

We can help with the answers to these questions and more. Choosing the right retirement partner matters. Plan with us.

📞 Call:0709 551 150

💬 WhatsApp:0700 053 128