Retirement income adequacy in Kenya
Waswa, Faustine Nangila
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Retirement income adequacy con be measured indifferent ways. One is by conducting a qualitative research where the researcher collects data in the form of opinions from retirees on the adequacy of the income they receive. Another is a qualitative research where adequacy of retirement income is measured by comparing a retirees’ income before and after retirement. The first goal of the resent United Nations Sustainable Development Goals is to eradicate poverty. This is a very important goal and this study conducted below tries to measure retirement income adequacy which is a way of reducing poverty in retirement in Kenya. This study works towards measuring retirement income adequacy using quantitative methods and quantitative data and it concentrates on the middle income earners. The data collected has 462 data points which shows an individuals’ income before retirement, income after retirement and any other retirement savings an individual made. Adequacy is measured by calculating the income replacement rates. Using the data from two main pension administrators in Kenya, the study found out that the average replacement rate for Kenyan middle income earners is 43%. This means that after retirement, an individual will receive 40% of what they were receiving as income before they retired.