How to invest pension money wisely in Kenya

Retirement age in Kenya is 55 to 60 years. Upon retirement, you get your pension ujipange nayo.Here is where most people get confused, they squander the money and after a couple of years, they sink into poverty. As a retiree, there is a clever way of investing your money so as not to suffer in your retirement.

—-Invest in Annuities

There are insurance companies which have annuity plans where you invest your money and earn constant income until you die. The money invested will be earning interest annually. You can save as low as Ksh 10,000 monthly. You can also save the lump sum amount and spend the interest only.

—-Start a profitable business

If you have never operated a business, it’s hard to start a new business. However, business like hardware shop or Agrovet are easy to manage. The venture will also keep you from boredom.

One of the greatest challenges of retirement is boredom. It’s a life that you were not used to. By owning a hardware shop, you will be engaged and also earning money.

—-Start doing farming

Another clever way of retiring without wasting your money and time is by starting farming. Buy dairy cows so as to be selling milk, plant cash crop like tea, grow vegetables and fruits. Farming will help you eat fresh food from your farm, thus ensuring that you live longer. You will also be busy, your mind will be engaged. The money you generate from the venture will help you travel and buy whatever you want.

—–Have a medical insurance cover

Old people are vulnerable to opportunistic diseases. You might find yourself spending all your pension on hospital bills.Enrol for NHIF as well as independent medical cover. The insurance cover will be paying your hospital bills as you get busy enjoying your pension money.

—–Invest in unit Trusts

Unit Trusts offer you a chance of earning interest daily. If you invest Ksh 4 million, you will be earning interest of Ksh 40,000 to Ksh 70,000 monthly. You can instruct the company to credit your Mpesa with the interest monthly.

Unit Trusts are safe investments, your money won’t be lost or stolen by anyone.

Unit Trusts earn interest of 6% to 18% annually. Some of the institutions with best fixed deposit accounts in Kenya are:CIC Insurance,ICEA Lion,Britam and Old Mutual.

—–Save the money in fixed deposit account

Open a fixed deposit account and save the money there in order to earn interest monthly. Instead of spending the pension money, you will be spending money earned from the interest. The interest rate for fixed deposit accounts in Kenya range between Ksh 4% and Ksh 10% annually.

—–Invest in real estate

You can inject some of the money into real estate where you build bedsitters, single rooms and apartments. The rent collections will help pay your bills and buy essential items. With money, you will live long.

—–Buy shares in a Sacco

Identify a good Sacco and buy shares from them. The money will be generating income annually through dividends.

Assuming that you have earned Ksh 4 million from your pension, here is how to spend the money:

Ksh 1 million—money market fund

Ksh 1 million—Fixed Deposit account

Ksh 500,000—dairy farming

Ksh 500,000—Shares in a Sacco

Ksh 500,000—Insurance health cover

Ksh 200,000—Start a business

Ksh 300,000 —Saving account