3 Ways To Calculate Retirement Benefits In Kenya

For example, let’s say you worked at your job for 20 years, and your final salary is KSh1500. Here’s how you’d calculate your pension: 20 years X 12 months X KSh1500 / 480 = KSh750 per annum. Per annum means annually.

Multiply your per annum amount from the previous step by 3/4. In this case, you’d multiply KSh750 X 3/4 = 562. 5 per annum. Then, calculate your lump sum by multiplying your per annum payment by 1/4 and then by 20. The formula is 1/4 X 20 X per annum. So, you’d multiply 1/4 X 20 X KSh750 = KSh3750. If you opt for a reduced pension with a gratuity, you’ll receive both the lump sum and the reduced per annum. In the case above, you’d receive a lump sum of KSh3750 and KSh562. 5 per annum.

Let’s say your final salary is KSh1500, and you served 10 years. You’d multiply KSh1500 X 10 years X 12 months / 144 = KSh1250. This would be your gratuity. On the other hand, let’s say you made KSh1500 and served 13 years. You’d multiply KSh1500 X 13 years X 12 months / 144 = KSh1625. In this case, your gratuity would be capped at KSh1500, since that’s your annual salary.

As an example, let’s say your final monthly salary is KSh550 a month, and you’ve been in service for 15 years. You’d calculate your pension by multiplying KSh550 X 15 years / 12 = KSh687. 5.

Go here to create an NSSF account: https://www. nssf. or. ke/benefits

If your pension scheme is through your job, your human resources representative may be able to help you. They can at least tell you how to access your retirement benefits account.

Some pensions or businesses may have a different retirement age. If that’s the case, your employment or pension contract will state that age. In general, the official retirement age is 60.

You may be able to receive your full benefits if you are retiring early due to illness. If you have a personal pension, your employer won’t make any contributions. However, your money will still earn interest. The reason why you can’t access your employer contributions or interest earnings is to protect you from running out of money later in life. You’ll still have benefits to claim at the traditional retirement age of 60.

If you take a lump sum before the age of 65, only the first KSh600,000 will be tax free. If you take payments, you can receive up to KSh25,000 per month tax free until the age of 65. [13] X Research source

You might choose this option if you need money at the time of your retirement to pay off your home or cover a major expense. Similarly, it might be a good idea to get some of your benefits in a lump sum if you have multiple retirement accounts. With some plans, you’ll still receive low monthly benefits after you receive the lump sum. [15] X Research source