Gone are the days when retirement meant going home and settling for serene environments and slowly enjoying your pension savings.
After ticking out of formal employment, many would pack up, move back to the village, and set up a small venture, maybe buy a few Fresian cows for milk, keep some goats, or start a modest hardware shop.
Now, a new ‘bale’ of retirees has been opened, those that opt, or are forced by circumstances ‘to eat’ their hard-earned pensions in Nairobi and other major cities.
New industry findings by Retirements Benefits Authority, have shown that a higher number of retirees are now spending in the cities and acquiring properties within the city precincts.
RBA’s assistant director of research strategy and planning, Monica Argwings says the trend has been driven up by the fact, that dependency ratio has increased, with retirees still paying school fees for grandchildren catering for their adult children.
The findings show that nearly four in ten are still financially supporting adult children well into their mid-20s and beyond.
“We are also seeing a lot of retirees spending their savings sustaining their families, with 39 per cent of respondents children above 25 still depending on them,” said Argwings.
Overall, adult dependents (aged 18 and above) make up a substantial portion of the total, with the 18–24 and over-25 groups each registering the highest raw numbers of child dependents in the underlying survey data.
The findings align with the broader 2024 Pensioner Survey results released by the RBA in early 2025, which found that 83.2per cent of retirees have dependents relying on them often due to high youth unemployment, delayed financial independence, and extended family obligations.
The survey, covering 427 recent retirees from registered schemes, also noted that many pensioners support not only their own adult children but also grandchildren (especially in younger age brackets, where grandparents frequently serve as primary caregivers) and other relatives.
Experts link this heavy dependency burden to Kenya’s persistent youth unemployment crisis, which leaves many young adults unable to achieve economic self-sufficiency.
Retirees, often on modest pensions (with many earning below Sh20,000–30,000 monthly), face added strain from rising living costs and inadequate benefits.
“This snapshot underscores a growing intergenerational economic challenge in Kenya, while retirement is meant to offer financial security, many older citizens find themselves continuing to shoulder family responsibilities long after leaving work,” added Argwings.
Data by the pension regulator shows retirees are allocating their lump-sum pension payouts to immediate needs and income-generating activities over long-term financial instruments.
RBA data shows that 16 per cent of retirees spend their benefits on building a house, tying with another 16 per cent who channel funds into paying school fees for dependents and grandchildren.
Investments in farming ranked third at 15 per cent, reflecting continued ties to agriculture and rural livelihoods even as many retirees relocate to towns.
Starting or expanding a business accounted for 14 per cent, signalling a growing trend of retirees turning to entrepreneurship.
The productive investments such as farming and business ventures, together account for nearly 29 per cent of utilization, suggesting retirees view these as pathways to sustained income in retirement.
Buying land accounted for 10 per cent of spending, while eight per cent invested in real estate ventures such as rental units or apartments. Seven per cent of retirees opted to deposit their pension money in banks, prioritising safety and liquidity.
Only two per cent reported buying shares, highlighting a low uptake of capital market investments among retirees, despite efforts by the Nairobi Securities Exchange to attract retail investors.
The RBA says the findings show the importance of financial literacy programmes to help retirees balance immediate needs with long-term income security.
In contrast, more traditional financial savings options lag significantly only 7 per cent of benefits are placed in bank deposits, while a mere 2 per cent flow into shares, indicating limited engagement with capital markets or formal savings vehicles among this group.
The RBA’s ongoing pensioner surveys, including the 2024 edition, have consistently pointed to challenges in retirement adequacy, with many respondents noting that lump sums are often directed toward settling pre-retirement needs like children’s education, home construction, or debt reduction rather than generating long-term passive income.
The findings by RBA also mirror findings by ICEA Lion that showed most retirees in Kenya are unable to rely solely on their pensions to meet everyday expenses.
The findings, based on responses from 1,200 working and retired Kenyans, highlight the fragile financial state of the ageing population in a country where savings culture is weak and social security coverage remains limited.
The “ICEA Retirement Preparedness Survey” shows that just about half of retirees feel their pension is enough to sustain them in old age. However, when actual living costs are considered, most retirees are only able to cover roughly 40 per cent of their basic needs.
“When we asked the retirees, ‘Do you adequately meet your expenses for your retirement income?’ A majority of 76 per cent said only to some extent,” said Jackline Ochieng, the research lead at ICEA.
The survey further shows that nearly half of retirees’ savings may last only part of their expected retirement years, raising concerns about financial security in later life. Major spending areas include healthcare, food, and support for dependents.
30 per cent of retirees dedicate between 11 and 20 per cent of their income to medical costs, while a third spend up to 30 per cent of their earnings on food. Another third continues to provide financial support to children, grandchildren, or other dependents.
The survey also reveals that many workers are inadequately preparing for retirement. Only 29 per cent feel confident that their current pension contributions will suffice when they retire, even though 57 per cent participate in a pension plan.
Nearly 41 per cent save less than 10 per cent of their earnings, 60 per cent have no retirement expense plan, and almost a quarter rarely consider inflation’s impact on future savings.
Education appears to influence retirement preparedness. Workers with higher education levels tend to save more, plan better, and utilise pension products consistently.
