Will you have adequate cash flow in your retirement?

Let me start by telling you of a Kenyan who is retired but is earning a solid sum every month from a bank. And no, it is not money from a pension scheme. It is also not one of those borderline deals that leave someone looking behind their backs to see if the authorities are after them. It is clean money coming from a bold financial decision the Kenyan made years ago.

You can be like that Kenyan. You can have money flowing into your account in your sunset years as you take things slow and take stock of the ways you have made this world a better place.

But before that, did you know that, according to the latest Standard Chartered Wealth Expectancy Report for Kenya, the average preferred age of retirement is 56?  

That should tell you something, you Kenyan, earning more than a Sh1 million a year. It should leave you asking yourself whether, after your 56th birthday when the biological clock has started issuing some very particular commands, your cash inlets will be productive enough to cushion you in your retirement.

The wise decision that the Kenyan took was to allow experts to handle his money. He let Standard Chartered Bank guide him on where to place his money so that there would be a steady flow in his retirement. Relationship experts attached to the bank guided him through and it worked very well, sort of like a farm that yields bountiful produce as anticipated.

This is not to brag, but Standard Chartered knows the tricks and intricacies of building a person’s portfolio in government bonds and in foreign currency bonds and securities. This is one of the surest ways of having a good cash flow in a person’s latter years. It is sort of planting a tree that gives you fruits but it stands there in perpetuity, generating more fruits every season.

By the way, not many people understand the power of bonds and securities in ensuring a healthy cash flow. If somebody is retired, what they need is that they have cash to run their lives, to pay bills, to do their medicals – which is quite important at that age – and to basically get their life going. It tends to be a disaster if somebody is retired and they don’t have the cash flow.

What we ask clients to do is ensure their investment is in liquid cash or near liquid. Or we advise that their investments, even if they are not fully liquid, are generating cash flow. Bonds come in handy because 80 to 90 percent of the portfolio placed there will be able to generate cash flow. A person can live comfortably on that.

What is the difference between this and keeping money somewhere to be accessed during retirement, you may ask? Well, there is an animal called inflation. And there is another called depreciation. The easy way to understand them is that, if you keep a stash worth Sh500,000 today under lock-and-key to open it after 20 years, that cash will buy you way less than it is today.

But this does not come out of quick fixes. Standard Chartered helps you invest today so that when you retire, you get monthly returns. That is why it pays to start early. Please, start early.

Remember, it is in retirement that medical bills shoot up, health insurance premiums are almost impossible, and lenders don’t want to loan you anything. Therefore, it is important that in retirement, you earn a monthly income to support your lifestyle. Your dedicated advisor and investment specialist will guide you in building a portfolio that includes local government bonds, which deliver a steady stream of monthly income.

We have also come to perfect the ways of solving every client’s unique retirement desires. Some people have the desire to retire in a foreign country. We guide you in structuring a portfolio that earns you returns in foreign currency as you gear towards your retirement. This could be through attractive mutual funds or even international bonds.

After working so hard for years, you deserve a dignified retirement. We are ready to walk the journey of preparing for this stage in life with you. Email us today on [email protected].

Paul Njoki is the Head of Affluent Banking and Wealth Management for Kenya and East Africa at Standard Chartered.

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