Abstract
In Kenya, the number of retirees exiting the laborforce with terminal retirement benefits has been on the rise. Retirement benefits are paid in four different modes, as total lumpsum, or partial lumpsum, or monthly pension, or annuities. Although studies have been conducted to examine the income security related to these modes of payment, the experiences of the retirees receiving particularly total lumpsum benefits have not been systematically documented. Thus, the objectives of the study were: to explain the primary characteristics of the Kenyan retirees; document the experiences of retirees receiving total lumpsum benefits; and recommend ways of dealing with these experiences and challenges. A sample comprising of 978 persons aged 55 years and older were recruited from 9 regions of Kenya. Data was collected using a survey questionnaire and focus group discussions. Majority of them were males, rural residents and married and received pension benefits from among the four types of schemes in Kenya: National Social Security Fund, civil service pension, occupational schemes and voluntary pension schemes. Findings indicate that negative experiences (e.g., mismanaging pensions, business failure, and unplanned lending) outweighed positive experiences (e.g., starting and running successful business, building a house). The study recommends that: retirees be encouraged to annuitize their pension savings in case other sources of retirement income may fail; raise the minimum pension amount to dissuade pensioners from investing their retirement savings; conducting business skills training for those exiting the workforce prior to retirement; and encourage prior retirement planning to avoid income pitfalls in retirement.
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