Anyone working in the formal sector is expected to have a pension plan. Whether it’s the mandatory National Social Security Fund (NSSF) or some other private retirement scheme, you are going to need something to keep yourself stable during those golden years. Even those in the informal sector are likely to get a piece of the pie as soon as the proposed NSSF Bill is vetted by the Cabinet.
There was a time when a college degree could land you a job as a manager or a supervisor in a fancy office. Today, a degree is as common as a counterfeit phone. Parents are sometimes forced to keep looking after their children long after they’ve graduated.
With some couples having children within their first year of marriage, planning for retirement is not an easy task. It can take years to build a fund with enough money sustain a couple, even if both of them are employed. Children keep digging into whatever funds are available until the parents are too old to support them.
The lucky few who get to retire early should never forget the fact that the longer you stay unemployed, the more expenses you have to deal with. If you have children, then you have your work cut out for you.
Children are Expensive
Even if their parents have investment plans and self-sustaining businesses, children have a way of racking up expenses. It may be a medical emergency or an extra course at the University. It may even be a date or some other post-modern form of dowry. The fact remains that children are, quite possibly, the longest lasting investment plans in a person’s lifetime.
For those who are mere months away from retirement, raising a child is no small task. If you had your first child after the age of 40, the next 20 years will be a never-ending series of debts. By the time you retire, your first, and hopefully only, child will be in college. Unless you’re a millionaire or otherwise have a stock of disposable income, you will find it hard to feed, clothe, house and educate your children.
So how do you deal with a jobless adult siphoning off a substantial amount of your pension? The answer is simple; you kick him out. As cruel as it may seem, pensioners should not be forced to put up with full-grown who have their whole adult lives ahead of them. The more lenient couples can cross their fingers, hopping that their children find employment as soon as possible.
For those who still have time on their hands, here’s what you should do:
Invest in their Future
Think of your children as an investment. You put them through school and they will be obligated to look after you after you retire. If this plan fails, and they are otherwise unemployed as you near retirement, get ready to do some charity work. However, if you managed to save something well ahead of time, maintaining a graduate may be less cumbersome than it appears to be.
One of the best things a parent can do is plan for their children’s future. As soon as your child is born, you can take up an academic insurance policy on their behalf. By the time they begin their secondary education, the scheme will have accumulated enough money to put them through high school.
For as little as KES 2000 a month, you can insure your children’s academic future for returns of up to 15% every year (after a specified grace period). Old mutual offers a tax-exempt plan known as Maxi Education, while CIC has the Academia Policy and Britam has the Super Education Plus. Jubilee gives the policy holder access to at least KES 200,000, based on their contract guidelines.
Some academic schemes double as a life insurance and accident covers, including Pan Africa and Old Mutual, which promise a 100% return on the sum assured. So with a little careful planning and some much-needed sacrifice, anyone can secure their children’s future without having to use up their pensions.