“Forever young, I wanna live forever young” is a common song and saying that most young people seem to live by.
For most young people, the last thing on their minds is having a retirement plan for when they reach an age when they can no longer work due to either health complications at an older age or just fatigue caused by old age.
Financial managers all around the world are of the opinion that people and particularly young people should contribute at least 12 percent of their total income towards a pension plan.
According to former Retirement Benefits Authority (RBA) CEO, Dr. Edward Odundo, over 80 percent of Kenyans fall into old-age poverty because they failed to save.
For this reason, most old people do not live long, due to stress from poverty and illnesses caused by old age due to the inability to finance treatment.
It is for this reason that young people are encouraged to join pension funds.
According to Cytonn Investments, at retirement, the contributions from both the employee and employer plus accrued interest are utilized to purchase a pension annuity from an insurance company with the provision that a member may take a maximum of one-third of the amount as a Lump Sum and the balance is utilized to purchase an annuity
As a young person, here are some of the reasons why you should invest in pension funds:
Have a reliable monthly income
A monthly income is important for anyone to finance basic needs, especially when you have just retired.
You don’t want to keep calling your kids for basic needs in the house such as food and paying bills.
You won’t be a burden to your children
As old age creeps in, if you do not have a reliable income, you eventually become dependent to your children.
With old age, your health deteriorates and if you do not have a reliable income from a pension fund, then you become a liability to your children who are probably just trying to survive.
You can travel to your dream destination
Everyone has that dream getaway that they have had for a long time. Be it Paris, the Maldives, or New York your dream can come true with your pension contributions.
With a reliable income from your accumulated pensions, you can travel the world without worry just after you have retired.
If you contribute faithfully and diligently to a pension fund in your younger days, you are rest assured that your retirement will be a peaceful one without worry.
You can even decide to retire early and enjoy the fruits of your savings!