The 4% rule
The 4% safe-withdrawal-rate rule says that a retiree can withdraw 4% of their corpus in year one of retirement, then increase that amount by inflation each year, with a high probability of the corpus lasting 30+ years. Originally derived for US markets, adjusted versions apply to Kenya with similar logic.
Concretely: if you need KES 100,000 per month in retirement (KES 1.2M per year), you need a corpus of KES 30M (KES 1.2M ÷ 0.04). The calculator does this math for you and inflates today\'s expenses to retirement-age values.
Kenyan retirement vehicles
- NSSF: mandatory, employer-matched, locked until retirement
- Employer pension scheme: occupational schemes, tax-deferred contributions, locked
- Personal pension plan (PPP): voluntary, tax-deductible contributions up to KES 30,000/month
- SACCO: deposits earn dividends, can withdraw at retirement
- Money market fund: liquid, withdraw any time, ideal for emergency component
- Treasury bonds: long-tenor, locked rate, ladder for predictable income
- Real estate: rental income through retirement, but illiquid
- NSE shares: long-term capital appreciation plus dividends
What "on track" means
On track means projected corpus at retirement age meets or exceeds the required corpus. Shortfall means current savings rate is insufficient. Two levers to close a shortfall: increase monthly contribution, delay retirement age. Both compound powerfully over decades.