After working for decades, one always looks forward to retirement where one can finally take time to rest and enjoy the fruits of their labor. Unfortunately, this is not always the case as there are those who dread it due to the fact that their finances are not in order. As a response to this, the Kenyan government formed the National Social Security Fund (NSSF) in 1965. The fund was created with the primary goal of providing Kenyans with basic financial security benefits upon retirement.
Here are some of the benefits that one gets on joining NSSF.
Financial Security via NSSF
By regularly contributing a portion of your income to the NSSF, you are able to build a fund that will sustain you when you eventually retire. The funds which are given out in a lumpsum on retirement, can be invested in say rental properties even Treasury bonds. This financial cushion ensures that one is able to maintain your lifestyle and cover essential expenses without having to depend on others.
NSSF Employer Contributions
Employers are obligated to submit to NSSF 6 percent of your salary as a contribution towards your retirement. This essentially means that you are receiving “free” money towards your retirement savings, significantly boosting your overall financial security.
Compound Growth
NSSF invests the money contributed by members in a diversified portfolio assets. These assets include Government securities, Corporate Bonds, Equities, Properties among others. These investments grow over time through compound interest reaching Ksh. 20.3 Billion in 2020.
Basically, compound growth enables your retirement savings to snowball, as your returns generate more returns. The earlier you start contributing, the more time your investments have to grow, leading to a substantial retirement fund.
Preservation of Lifestyle
One important thing that most people forget about when thinking about retirement is that ability to preserve their lifestyles. This is because it has a major impact on the quality of life after retirement.
When one has a substantial retirement benefit like the ones offered by NSSF. They can be able to make investments which can generate good income. This can help them avoid the financial stress and downsizing that many retirees face when they haven’t adequately prepared.
With a good retirement fund in place, one can continue enjoying hobbies, traveling, and pursuing your passions without compromising their financial well-being.
Peace of Mind
When one has a good retirement fund in place, it offers one peace of mind due to the guaranteed financial security. It enables one to face the future with confidence, knowing that you have taken proactive steps to ensure financial security. This peace of mind has a positive impact on one’s quality of life both before and after retirement.