Why you should not bank on your kids after retirement

Any parent who is relying on the hope that their children will support them financially in their old age is setting themselves up for disappointment and despair, Old Mutual has warned

Old Mutual SME Manager Life Business George Oyuga notes that chances are that the kids may not even be economically empowered to offer much-needed support.

Oyuga regretted that un employment rate among youth has reached unprecedented level forcing many parents to retain their children in the nest as they continue supporting them financially.

He noted that children are no longer considering it a priority to offer financial support to their ageing parents.

“The above picture presents a call for everyone to start early and save for their own retirement because there is no guarantee that financial help will come from elsewhere”, he said

“If one retires before all their children finish school, how will they continue funding their children’s education with no stable income?” he posed.

He advised that those in formal employments who are already saving for their retirement do so in retirement schemes that are able to consolidate these funds and avail the much-needed pool for domestic borrowing.

Mr Oyuga said retirement schemes are huge lenders to the government as they invest in government securities.

He said assets held by the retirement schemes in Kenya are currently over Sh1 trillion in fund value.

The SME Manager also urged people to embrace an Individual Pension Plan as the safest and most flexible platform for their retirement savings.

“Those who have embraced the need to save for their retirement and are not in formal employment will embrace a culture of working harder to acquire what is needed for today and also put something aside for their future lives in retirement”, Oyuga said.