A new report from the Retirement Benefits Authority has revealed that a large number of Kenyans are using their retirement payouts to handle responsibilities they were expected to clear during their working years, casting doubt on the country’s level of financial readiness for old age.

The data shows that the most common uses of retirement savings are paying school fees and building houses, each taking up 16 per cent of total withdrawals.

While investing in a home is often viewed as a stable and long-term plan, the equal focus on education costs suggests many retirees continue to support dependents, even after exiting the workforce.

“This points to a lack of structured financial planning,” said a Retirement Benefits Authority official.

“By the time individuals are retiring, they should not be burdened by responsibilities like school fees. Ideally, those should have been taken care of during one’s active employment phase.”

The report suggests that retirement benefits are not being preserved primarily for post-employment living but are instead being used to cover unresolved financial demands.

Farming (15 per cent) and business investments (14 per cent) follow closely behind housing and school fees, showing that many retirees try to create new income streams after retirement—but this also exposes them to new financial risks. Farming, for instance, remains vulnerable to weather changes and unstable market prices.

Other uses include buying land (10 per cent), investing in real estate (8 per cent), and bank deposits (7 per cent), showing a strong preference for lower-risk choices.

Yet, only 2 per cent of retirees bought shares, highlighting a general avoidance—or lack of knowledge—of financial markets that could provide better returns in the long run.

RBA’s data also uncovered a worrying trend regarding savings culture among workers. A staggering 81 per cent of those surveyed did not make any voluntary contributions to their retirement funds.

This means the majority rely only on what their employers contribute, a situation that may not meet growing costs such as healthcare and daily expenses in old age.

Only 19 per cent of employees made extra contributions to their pension, a signal that financial literacy and competing demands during active employment may limit long-term saving decisions.

When it comes to alternative savings, nearly half (49 per cent) of retirees have money saved in Saccos, while 20 per cent use bank accounts. Just 5 per cent have insurance-based savings, and 3 per cent put money in other types of savings.

Alarmingly, 23 per cent of retirees have no additional savings at all, leaving them highly exposed in their later years.