DETERMINANTS OF INCOME SECURITY AMONG PENSIONABLE RETIRED PERSONS IN KENYA

Retirees’ income security constitutes a key concern for nations aiming to secure their ageing populations. Kenya has a growing retirement sector with about 252,000 retired civil servants who are on pension and a significant number of private sector retirees who receive a gratuity at retirement. Though formally retired workers may receive a pension, studies consistently report low pensions uptake and inadequate incomes for those retired as well as an increasing national and societal burden. This paper explores the key determinants of income security among 978retired persons who were receiving dues on their retirement savings. Guided by the life cycle and third age theory, the study investigated whether retirees’ socio-economic attributes, pre-retirement financial status, retirees’ benefit package, retirees’ utilization of retirement savings and investments and pre-retirement preparation correlated with income security. A mixed-method study design was used combining survey and case study approaches. Cluster, purposive and random sampling methods were employed to select retirees under the four categories of retirement schemes in Kenya across 18 selected counties of Kenya. Hypotheses were tested using the Chi square test of significance and comparison of means (t-test) specifically to illustrate the relationship between socio-economic indicators, pre-retirement factors and income security at retirement. Logistic regression procedure was employed to isolate the significant factors that predict income security in retirement. The binary logistic regression analysis confirm that retirees with higher education had 26% higher chances of enjoying income security, those who earned higher pre-retirement salary had 25% higher chances of having a secure income at retirement, those knowledgeable about pensions had 35% higher chances of being income secure while those who had planned for their retirement had 14% higher chances of achieving income security. The study recommends crafting of a robust retirement planning package, financial and health plans for retirees’ income security and sustainable livelihoods.