Too Early Saving For Your Kids’ Retirement?

I have an eight-year-old. A very inquisitive little man especially on matters of money. He even asks about taxes and why someone would wake up to go to work only for them to be ‘cut their money’ in the name of tax.

He asks why little children like him can’t have their own money without relying on their parents who only give them coins for chocolate and other snacks. Too much too soon for an under-ten, you’d say?

So this eight-year-old dude once asked about where old people get money yet they don’t go to work, and what would happen to me when I was old and toothless and wouldn’t be able to work. Both my parents are retired and he knows they have their own money, because, how else would they survive without it? This is where I thought; well, why not introduce the retirement savings conversion, albeit he would understand just a few concepts of it?

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Saving for your child’s future especially their retirement, might sound so Western. We are Africans and we barely even save for our children’s education, how could we think about a sixty-year-old ‘child’? This is something that very few parents would think of when considering Saving options and conversations with their children.

Opening a savings account for our children’s unknown future is one of the greatest financial decisions a parent can make for their children. It’s a great gift for their future because it gives them a head start on savings as well as giving them valuable financial lessons early enough for life.

From the moment one becomes a parent, other than worrying about the price of NAN, school fees, the bike, and skates, they have random thoughts about the kind of future their kids will have, but unfortunately, they rarely put the thoughts in real-life practice. It might sound weird to think of when and how your now two-year-old will live in their retirement age, but isn’t it the reality, that one day, God willing, they will be sixty-seven and helpless, toothless, and maybe penniless?

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Having a solid retirement plan for a child enables them to have a stress-free lifestyle when they are senior citizens. A solid pension scheme like the National Social Security Fund, or NSSF allows us to save for retirement and this only means we can safely plan and save with no hustle. Take, for example, the Haba na Haba savings plan from NSSF, meant for the informal sector. You’d register for your child or children in the comfort of your home via a mobile phone and still make contributions easily via mobile phone money transfer because Haba na Haba allows a member to make contributions for other NSSF members, in this case, your children.

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Such an easy and safe retirement savings plan that any parent can make for their children because it provides an introduction to investing and a good platform to teach your young persons about money and savings. The earlier we do this for them, the easier they’ll find it as they grow into the economic and money world.

We talk about inclusivity all the time in our daily conversations regarding life and all that comes with it, but we rarely think about children and retirement. A few decades from now, your twelve-year-old bundle of joy will be sixty-three. Have you begun planning for them? Saving for retirement is an essential component of financial planning and every parent should think of a retirement saving plan for their children.

‘ You don’t need to see the whole staircase, just take the first step’ – Martin Luther King Jr.

Read Also: Why Kenyans Should Start Saving The Little They Have While Young

By Diana Makokha