Retirement planning is one of the most important activities that individuals should undertake during their most productive years. Unfortunately, too many people underestimate the amount they need to put away each month in order to have a comfortable retirement. While the actual figure varies from person to person, there are certain useful benchmarks you can use to help you understand if you are on track with your retirement savings. 

The 3 A’s of retirement savings

When calculating the amount you should save each month for your retirement, you will find the 3A’s of retirement savings useful. They are: 

  1. Amount: It is recommended that you save at least 15% of your pretax income annually, if possible
  2. Account: What other sources of income can you channel towards your retirement fund? They can include investments, proceeds from a business, etc.
  3. Asset mix: If you invest in assets that have a high rate of return, you will be able to channel more into your retirement fund.

How do you check if you are on track?

To check that you are on track, consider how much you have already accumulated and your age. Experts recommend that you should be able to replace nearly 80% of your current annual income in retirement so you can maintain your lifestyle once you retire. This means that you should hit the following benchmarks by the following ages:

Current ageIdeal amount of retirement savings required
50Equivalent of 6 times annual salary
55Equivalent of 7 times annual salary
60Equivalent of 8 times annual salary

How much should you live on upon retirement?

Once you retire, you need to be able to manage your savings effectively so that you do not deplete them. You may seek guidance from the 4% rule, which recommends spending 4% of your retirement balance each year, plus inflation. If, for example, your retirement portfolio is worth kshs 40 million, you would withdraw ksh 1.6 million the first year, and from the second year onwards, it would be Kshs 1.6 million plus inflation. By this rule, it is estimated that your retirement fund will last you approximately 25-30 years after you retire.


It is important to plan for your retirement during your most productive years so that you are able to accumulate enough to live comfortably when you are no longer working. Investing in a high-yielding fund can also get you closer to achieving your retirement savings goals. For a consult on achieving your financial and investment goals, contact

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