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How to Plan for Retirement While in Your 30s
Money Management

How to Plan for Retirement While in Your 30s

Retirement is unavoidable. A time will come when you cannot work anymore and generate active income but are still required to pay off all your bills. How will you manage that? By appropriately planning for your retirement.

Retirement planning refers to the financial measures and strategies like saving and investing in schemes that will generate you income and ensure you live a comfortable life in your sunset years. Retirement planning will help you beat market uncertainties, build wealth and be self-sufficient. 

An effective retirement plan is vital, regardless of where you are in your financial journey. Even if you already made a retirement plan in your 20s when you started thinking about retirement. You should revisit it often and revise it once in a while to ensure you are on the right track. 

Responsibilities and other financial obligations increase as you age, and so does your income. Your strategies in your twenties, thirties, and forties will differ vastly.

This article will discuss five strategies you should adopt in your 30s to help you harden your retirement planning foundation and avoid hiccups later. 

Define your needs and goals

Before embarking on any financial journey, you must know your needs and goals. Retirement planning is no different. How accurately you define your goals will determine how smooth the entire process will be.

The first step of retirement planning is figuring out your timeframes. You do that by asking yourself these three questions:

When will I retire? The official retirement age in Kenya is 60. Will you retire later? If you plan to retire at 50, you must contribute more to your retirement savings than someone retiring at 67.

How long will I be retired? Advancement in healthcare has increased life expectancy. The average person will spend upwards of two decades in retirement. Longer retirement means more bills to pay.

What Will I Do in Retirement? Are you planning to have a life surrounded by loved ones and spend more time with grandkids? Are you planning to take a cruise around the globe? You should make financial plans depending on what you will be doing in retirement.

Make the Right Investments

To maintain your current lifestyle in retirement, you must generate at least 70% of your pre-retirement income. When you factor in inflation, the money you will be receiving from the NSSF pension scheme you’ve invested in since you started working won’t be enough.

In your 30s, you must boost your retirement savings and investments as your income increases. If you contribute 10% of your monthly salary towards your retirement fund, it is time to make it 15%. But then again, this might not cut it. You should invest in schemes that will generate passive income well into retirement.

You should invest in long-term and less risky vehicles that will generate constant income and, if possible, cushion you from inflation by assuring capital gains. Some recommended ones are: 

Real Estate - Developing properties in prime areas and renting them out will guarantee income generation in the long term. Notwithstanding the substantial initial investment required, it requires low maintenance and overhead and can easily be managed even in retirement.

If in your early 30s you do not have the initial investment amount to own real estate, you have to develop a plan to build towards this, such as starting with just a land parcel and building your way up. You should also look into mortgage options and see if this route makes good financial sense to you.

REITs: Real Estate Investment Trusts (REITs) are suitable for investors who want to invest in real estate but lack the significant initial investments required or those who want to diversify their real estate portfolio without having to own and manage properties. REITs pay attractive dividends at the end of every financial year. 

This can be an excellent route to take in your 30s if you do not have enough to own real estate or do not want to tie a significant percentage of your investment money in one asset class. However, note that there are just a few regulated REITs in Kenya since it is a relatively new investment type in the local market. 

Government Securities: These are government-secured investment schemes that let you loan money to the government by buying treasury bills and bonds. Investors earn attractive interest rates that are often pre-determined and don’t change. 

Treasury bills are short-term, with a maximum maturity of one year and interest paid on maturity. On the other hand, Treasury bonds have a maturity period of up to 30 years, with interests paid bi-annually.

For the purposes of retirement planning, longer-term treasury bonds are the most ideal. Since you are in your 30s - which is in no way too early to plan -you could also use treasury bills to increase the value of your savings - and then at 40, but a 20-year bond if you want to retire at 60 years. 

To achieve your retirement investments goal, it is advisable that you separate those investments. Mixing retirement investments with your kid’s education investment, for example, might make you lose sight of your future goals and cost you a lot. It also allows for diversification; if one investment fails, all your plans aren’t affected.

Manage your Cash Flow and Pay off all your Debts

Learning how to manage your cash flow will help you save more and prepare you for when you have to cut expenses in retirement. Cash management will also help you dictate the financial path you want; it is the first step in building solid financial health.

Pool all your monthly income streams together and start managing your cash. At this point, it may be ideal to spend about half or less of your income on expenses, leaving the other half (or more) for saving and investing for the future, including retirement. 

Create a budget for you and your family and stick to it as it will help you stay on track with your plans.

In your mid-30s, you should be done paying all your student loans. You may also have accumulated new debt like a mortgage or a car loan. To keep your retirement hopes alive, you should be working on repaying all your loans and possibly go into the next decade of your life debt-free.

Negotiate with your creditors to create a plan that will help you service any loan you have without affecting your retirement savings. If you take any more loans, they should be ones you can afford. You should also avoid loans that require you to put an asset as collateral; this can be detrimental to your retirement plans if repossessed. 

Secured loans may, however, in many instances be the only route to accessing significant amounts of credit which means you need to be well versed with best practices to ensure if you have to, you have certainty that you will be able to repay to make sure you will not lose an asset that is part of your retirement plan such as real estate. 

Be prepared for Emergencies.

In your 30s, you are in your financial prime. You are making more, spending more, and juggling much more on only two hands. Mistakes happen when this is the case, and things do not always go as planned. 

To ensure that you never lose track of your retirement plans, you should assess all your risks and put measures in place to help you mitigate them, leaving you with little or no financial dent.

Loss of income, career-threatening accidents, catching a chronic disease, or death of a partner are all emergencies that you have to be prepared to face. You might be forced to dig into your retirement funds if you do not have a rainy day fund.

The best way to protect yourself and your family from any unforeseeable event is to ensure you are adequately insured. Some vital insurance covers you should invest in are:

  1. Health Insurance
  2. Income Protection Insurance 
  3. Disability Insurance 
  4. Auto and Home Insurance 
  5. Education Insurance (for the children)
  6. Life Insurance 

In addition to insurance, you also need to have an emergency fund with at least six months’ worth of living expenses. While the rule of thumb also allows for 3 months, in your 30s you want your emergency fund (or rainy day fund) to be a little bigger to adequately cushion you and typically your family from the hardships of income loss. 

Learn More>> How Much Emergency Money Should a Family Have In 2022

Get a Financial Advisor

Retirement planning is no easy work as with any financial planning, especially if you are just starting the journey in your 30s. Finding suitable investments and creating time to manage them will require hard work. 

You might run into problems like driving yourself to debt or your investment efforts going up in smoke due to market instability or economic recessions and being forced to declare bankruptcy. 

Putting yourself in a position that will see you successfully plan your retirement might involve hiring a financial advisor. You can have them on a retainer basis or have them look over the retirement plan you made and offer their expert opinions. And that isn’t all. A financial planner will also:-

  • Equip you with financial knowledge to make better investments and avoid making a loss
  • Help you save on taxes you pay
  • Provide financial strategies specifically tailored for your needs and goals
  • Use the latest technologies to foresee market instabilities and make data-driven financial decisions.


Whether you are just starting your retirement plans now or have been in the trenches for a while, your 30s are the decade to solidify plans, get started with your long-term investment strategies, and pay all debt.

Starting now rather than when you are 40 or 50 will help you save more, cash in on the benefits of compound interest, prioritise your goals and provide you with peace of mind that your golden years will be–golden.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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