Having a pension is an advantage when you retire, as it will enable you to maintain a good standard of living, but there are other needs to be taken care of. Perhaps the greatest of these is health. From her experience dealing with pension and pensioners, Jacqueline Karasha, the Chief Sales Officer at Sanlam Life, has advice on how one can take care of their medical expenses during retirement.

1. Plan to be cash-liquid during retirement.

During Covid, the lesson learnt by many was that having a shamba, a house, which in Kenya translates to being rich, does not mean that you will access emergency healthcare because hospitals want cash for admission. With age-related illness being a constant in retirement, cash is a matter of life or death.

2. Separate retirement medical funds from pension money.

Pension money should be thought of as a salary in your retirement years. It is the money that caters for the day to do needs. Medical funds are to cater for medical expenses, which increase with age. Having two pots makes for ease of living in retirement.

3. Put cash saved for medical in retirement in an interest-earning, easily accessible place.

When one is working, they are advised to have cash set aside for a rainy day – usually said to be 6 months of their current salary. With healthcare being the biggest challenge in retirement, one is advised to save for health expenses. The money saved should be easily accessible but also earn interest – money market funds can be an option.

4. Buy post-retirement medical insurance cover when you are still working when you are younger.

Medical cover for seniors attracts higher premiums and a lot of restrictions to cater for the perceived high risk from the elderly. Because of surveys showing Kenya’s aged population is ravaged by health care-induced poverty, RBA came up with post-retirement medical insurance cover where you buy medical cover when still working and cash in during retirement.

5. Be mentally and physically in shape ahead of retirement. 

Retirement is a life-changing occurrence. The transition from having a purpose to doing nothing hit all hard, with anecdotal evidence showing that men are mentally harder hit than women. There is also physical deterioration due to age. So, one is advised to take care of their bodies when younger and mentally prepare for retirement so as not to be shocked when it happens.