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Today we are going to look at alternative retirement planning.

We are all going to retire at some point in our lives. Let’s face it, this is the reality and we better make peace with it sooner rather than later, because that’s how it is.

Making peace with it puts you in a position to prepare for it mentally and psychologically.

You are in such a better position to make sound decisions regarding retirement. For one, retirement does not have to be a nag. If prepared well, this is something that one can look forward to.

That is why, you find some people are usually very excited to retire young because then it means that; they’ll have time to do other things rather than being employed the rest of their lives. So today I wanted to cover a specific product. It’s relatively new in the market and very exciting.

A product that you should consider. It has great benefits and really good returns for people across a wide range. Most insurance products have limitations in age, especially at the entrance.

By this I mean that; when it comes to life assurance, the later you take up a policy, the more expensive it gets. But with this product, no matter how old you are, as long as it’s below 65 years of age, you are surely going to get something above your savings. And if you are younger, then it’s even better.

And you should consider it sooner because if you sign early, you’ll get more benefits in terms of monetarily. Let’s say, for example, you’re a guy aged 32. You’re making a relatively decent living job.

You’re making around 150k a month. And you have a wife who is also bringing home around 137k. Your kids’ education policy is also ongoing and taken care of.

After your cumulative monthly costs and investments, you have something like 100,000/= left in your joint bank account. Most of the time you find yourself squandering all this monies without a meaningful reason.

You probably do impulse buying and spending just anyhowly because you have the cash in the bank and no proper plan for it. But with this product, I’ll help you to commit at least half of that money, so that you spend the 50,000/= and save the other 50,000/= for your retirement.

With this product, you can make up to 50% interest on your total savings by the end of the policy term. That is if you take a full term of 12 years.

Insurance policy is the best savings mechanism because, it not only encourages you to save, but it also gives you an assurance security in the event of untimely death of the policy owner.

In the event of untimely death, there’s a sum assured of 100% is paid to the next of kin within 90 days of the demise. So, irrespective of the time you’ll have saved, your kin will be paid. Even if you’ve saved only for a month or two, your kin will still be paid.

This product gives you a tax relief. Of course, it’s obvious, that every Kenyan must pay taxes. This is the best way to avoid tax legally. So, with this alternative retirement savings plan, you also enjoy tax relief of 15% on your monthly contributions, which helps you to reduce your tax burden, thus avoiding tax. This product is not taxed at maturity. The sum assured is paid in full at the end of the term.

ILLUSTRATION

So that’s a table there, showing the much you’re saving per month. And by the end of the 12th year, the total amount that you’ll have saved is around 7.2 Million. The sum assured on the other hand is 10.9 million.

The returns and tax relief total $ 3.7 million – which is over 50% of your total savings (7.2million)

The minimum term for this product is five years, and the maximum term is 12 years.

I know that some of you are thinking that 12 years is such a long period. Well, time flies.12 years is not that long.

I mean, time is running fast, and 12 years is not such a long term. At 32, if you want to retire in 12 years, you’ll only be 44 years old at the time your policy is maturing. ‘Life begins at 40’ – you know.

So, if you want to retire in 12 years, don’t be worried about term. The maximum term equals to maximum yield. So, by all means, go for the maximum.

The normal retirement schemes limit retirement terms to be between 55 and 65 years of age and the pension savings are also taxed at maturity. But this product allows you to decide or rather to dictate when you want to retire. You set your terms for retirement.

You can even save on this product at the age of 65 at the maximum entry time and still, you’ll have enough time to save for your retirement.

Questions and Answers:

1. Why do you need an alternative retirement plan?

Imagine retiring at 65 years, and God allows you to live up to 99 years of age.

That’s a difference of about 34 years. What will you be doing with 34 years? I mean, you see, My grandmother died at 99 years and she was a business lady. So, that means that if she retired at 65, then the rest of the years she would be languishing in poverty if she had not planned well for her old age.

The latest Retirement statistics show that most of our Kenyan retirees (80%) are languishing in poverty because, either they saved too little or started saving for their retirement too late. Some depend on their children who are also overwhelmed by their responsibilities. So, a normal Mwananchi should have some good savings besides their normal retirement plan (those in employment). Those who are not in employment Retirement Schemes should have started with this plan like yesterday.

The risks of life include; dying early or living too long, So, if one dies early, then their next of kin will benefit from whatever they will have saved – “A good man leaves an inheritance to his children’s children” This Bible verse teaches us about legacy, how to keep our life goals, our vision and our future front and center when we’re choosing how to use our money today. But if you live long, then you’ll be able to have some good money to take care of you.

Have you planned how you’re going to RETIRE?

Are you employed? Good, does your employer have a retirement for staff? No? Why don’t you start on your own then? You need to start planning for your retirement today. Can you plan for it? (Good question).

Your employer has a good Pension Scheme for the staff. How much is your monthly contribution? How many years do you have left for your retirement? If you continue with the same contribution, will you have enough for your old age? If it’s not adding to at least 7Million then it will not be enough. Can you see why you need an alternative retirement plan?

Are you a business person – self-employed? Do you prefer investing in Property? Property investment is very good and is profiting but have you considered the cost of building, Management, and Maintenance? Do you have sufficient information on how to become a real estate investor? How about the unpredictability? Are you equipped in case of Corruption cases and bribery? What about the Infrastructure challenges? You may have your buildings/property fully occupied and rented-really doing well and appreciating.

Imagine if another COVID pandemic hits up. Of course, I’m sorry to scare you a bit. Yeah, life happens. Imagine a fresh lockdown everywhere in the world. What if there are no buyers, no occupants, and no tenants in your buildings for over 1 year? What if your children are also hit badly and are not able to support you financially? How do you expect them to help you? Will you manage to survive? So don’t look up to them to help you during your retirement. “Your children are not your Retirement Package”-your savings are.

Are you a Kenyan living and working abroad? At retirement time, you will have to come back home. Do you have a plan? My uncle was an IT personality in the US for more than 20 years. He came back home for retirement but because he had not saved enough back at home, he presently has nothing to show that he was once a person of integrity in Chicago for more than 20 years. He only has pictures and certificates of money. Apart from his children who send him some cash monthly, he would have died due to depression (God forbid).

I know that you probably have schooled your children at Harvard University and the like. Maybe you are hopeful that your children will take care of you during your old age-which is every parent’s delight. But what if they are not there at that time? What if their family responsibilities overwhelm them? What if? Just what if?

Old age comes with a lot of expenses, especially Medical Expenses. You will require an Annuity or Income drawdown to help you earn some money monthly.  You need this product to supplement your normal retirement plan for your future medical cover too (Medical Cover for Retirees). So, if you plan well now, you’ll have extra money to spend on hospital expenses.

A coin invested today will save a rainy tomorrow.

Requirements

A copy of your National ID or passport

A copy of your KRA pin letter

A duly filled application form

First Premium payment notification

Monthly payments can be made through the checkoff system, Bank Direct Debits, Cheques, or MPESA.

The first premium is usually done through M-Pesa. Our pay bill number is 541400 and the account number at the initial payment is new. Once you pay, ensure that you forward to me the M-Pesa notification.

Once your policy is issued, you will be sent, a policy document through your email. So, ensure that the email address you use during registration is working and secure.

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Contact

Email: weretamara@gmail.com

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Thank you so much for watching. I’m glad that you have llearneda a thing or two from ifromthis posts.

I look forward to journeying with you to your Retirement season. See you, stay focused, stay blessed.

“Tamaras, your Advisor to a wealthy retiree”