The thought of retirement does not have to make you shudder. The main reason you could be extremely nervous about retirement is that you equate it to the loss of a revenue stream. However, that should not be the case after working dutifully for so many years you need to rest and do less-taxing activities. For some, this is gardening, family businesses, and so forth. But to be financially stable a retirement plan is something you need to pay key consideration to whether in your youthful years or when well-advanced in age.

In Kenya, most civil servants retire at the age of 60. Even so, you do not have to wait for a specific age to retire. Some people retire after hitting certain goals such as accumulating enough assets to lead a decent livelihood.

Reasons to invest in a retirement plan

•To be self-independent-In old age the last thing you want is to be a burden to your children. Some savings or revenue-generating assets will help you take care of your day-to-day expenses

•To have freedom-wealth is synonymous with freedom. Once you are financially stable, you will not have to work as hard during your retirement. After thirty productive years, you can finally spend more time with family, doing charity, and doing the things that genuinely make you happy. You can only have this luxury if you had a solid retirement plan.

•Taking advantage of government incentives-most governments give tax incentives to pensioners money to encourage the saving culture.

How to prepare for retirement

•While you are still working invest in assets such as land, rental property, stocks, shares, and so forth. These assets will generate income for you when you are retired and less productive.

•Subscribe to health insurance-with old age you will be more susceptible to diseases. Look around for health insurance that is within your budget.

•Start saving now-Besides investing in assets you need liquid cash that you can use when the need arises as a matter of urgency.

•Stay debt free-Maybe this is the time to clear that debt that you have been postponing for a while now. This is the case for high-interest rate loans especially. In retirement, you do not want auctioneers to dispose of your hard-earned property due to a debt that has accumulated interest over the years.

Types of retirement plans

•Company-sponsored plans-some organizations make arrangements for employees to be deducted directly and the proceeds go to a retirement savings plan.

• Government-sponsored plans-In Kenya we have the National Social Security Fund which is a statutory pension scheme. All employers are required to remit pensions to NSSF.

•Individual sponsored plans-These plans are offered by financial institutions or by insurance companies.

Most importantly, diversify your savings and investment portfolio.