3 Reasons Why You Should Start Preparing for Retirement Early

21 March, 2026 / Articles

Age has a way of creeping up on us. One minute you’re running away from the teacher on duty in primary school and the next your grandchildren are running circles around you. Time really doesn’t stop for any man. As such, if you think saving for retirement once you hit your fifties is a good idea, you probably should think again. This will likely cost you big time. This is because you will have wasted the chance to take advantage of the time value of money which works better the earlier you start. If you can start saving while in your twenties then you’d be better off. Why? Let us dive into some of the reasons why you should start saving early for your pensions.

  • Waiting will cost you

The time value of money is not to be underestimated. Factors such as inflation mean that your money will be worthless tomorrow than it was today. As such staying ahead of the curve is a huge benefit for yourself. You can do this by investing in vehicles that have higher rates as compared to the inflation rate which currently stands at around 6.4 %. It would, therefore, be advisable to look for something which has returns greater than this for you to truly benefit.

Additionally, waiting could limit how much returns you are able to gain. What you get by the time you retire if you start investing today is a whole lot more than the yield you will gain if you choose to start five years from today.

  • Compounding value of money

Compounding interest is quite an effective way of putting your money to work. This is because, depending on the terms of the investment, interest earned each day, month, or year will also earn you more interest. How awesome is that? Now imagine how much a mere Kshs. 10,000 per month could earn you by the time you choose to lay down your tools and enjoy your golden years. It’s definitely not a small amount I can promise you that.

  • Taking advantage of employee benefits

Quite a number of companies offer retirement structures to help their employees transition better once they reach that stage. As such, it would be better for one to take advantage of these facilities which tend to have some great benefits and returns when started early. Again, this goes back to the time value of money.

In conclusion

Retirement is the time many look forward to. Unfortunately, a big chunk of us usually find that we are underprepared and end up pushing it forward. And in many situations, some die before ever getting the chance to retire and enjoy their final years. It is, therefore, better to get the ball rolling on your retirement plans much earlier.

 

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