Personal Retirement Plans
A Personal Retirement Plan is a long-term savings solution designed to help individuals build financial security for retirement through regular contributions over time. In Kenya, Personal Retirement Plans are regulated by the Retirement Benefits Authority (RBA) and offer individuals a structured and tax-efficient way to prepare for life after employment or business.
Unlike employer-sponsored pension schemes, Personal Retirement Plans are individually owned and remain with you regardless of where you work or whether you are employed or self-employed.
Why Personal Retirement Planning Matters
Many Kenyans rely on family support, rental income, or business income after retirement.
Without a proper retirment plan, maintaining financial stability after retirement can become difficult because of:
- Reduced regular income
- Rising medical expenses
- Inflation and increasing cost of living
- Dependants and family responsibilities
- Longer life expectancy
A Personal Retirement Plan will help you create disciplined savings towards “future financial independence.” This would mean :
- Long-term financial security after retirement
- Flexible contribution options
- Tax advantages on qualifying contributions
- Professional fund management
- Ability to transfer benefits when changing providers
Personal Retirement Plans
Who These Plans are For
These plans are ideal for:
- Self-employed individuals
- Business owners and entrepreneurs
- Freelancers and consultants
- Employees looking to supplement employer pension schemes
- Individuals without formal retirement benefits
- Kenyans in the diaspora planning for retirement back home
Coverage
WHY AIVA ?
01.
At AIVA, we help you:
- Select a suitable retirement plan
- Determine realistic contribution levels
- Consolidate retirement savings
- Review your retirement goals regularly
Frequently Asked Questions
What is a Personal Retirement Plan?
A Personal Retirement Plan is a long-term savings plan that helps individuals build funds for retirement through regular contributions. It is suitable for both employed and self-employed individuals in Kenya.
How much can I contribute?
You can contribute based on your financial ability and retirement goals. Contributions can be made monthly, quarterly, annually, or through flexible lump sum payments.
Are Personal Retirement Plans tax deductible in Kenya?
Yes. Contributions to approved retirement benefit schemes may qualify for tax relief subject to limits provided under Kenyan tax laws and KRA guidelines.
Can I access my savings before retirement?
Yes, partial access may be allowed depending on the scheme rules and applicable regulations. However, retirement plans are designed for long-term savings and early withdrawals may attract taxes or penalties.
What happens if I change jobs?
Your Personal Retirement Plan belongs to you and remains active regardless of employment changes. You can continue contributing independently.
Can I transfer my pension from another scheme?
Yes. Pension benefits from previous employers or other retirement schemes can be transferred into your personal retirement plan through pension consolidation.
What happens when I retire?
Upon retirement, you may access your benefits through:
- Lump sum withdrawals
- Income drawdown
- Purchase of an annuity for guaranteed income
Can self-employed individuals contribute irregularly?
Yes. Personal Retirement Plans are flexible and allow irregular or lump sum contributions depending on your cash flow.
What happens to my retirement savings in case of death?
Your nominated beneficiaries or dependants receive the accumulated retirement benefits
Why should I start retirement planning early?
Starting early allows your savings more time to grow through compound returns and helps build a larger retirement fund over time.
Can I have both a company pension scheme and a personal retirement plan?
Yes. Many individuals use Personal Retirement Plans to supplement employer pension schemes and increase retirement savings.