Financial Factors Affecting Retirement Planning by Savings and Credit Cooperative Employees in Nakuru Town, Kenya


Kepha Nyamweya Mokaya
Kimani Maina


Retirement planning is an important concept in personal financial management which has gained prominence in the contemporary world. Since retirement is inevitable, it is crucial to start planning for retirement early in one's life so as to ensure a comfortable life in retirement in which the retiree has a considerable nest egg. Paradoxically, very few people plan for retirement despite its importance. Financial planning is a crucial aspect of retirement planning and it involves planning for the amount of income to expect at retirement, sources of that income and the adequacy of the income to meet the retiree's financial needs such as increased cost of medical care. This study examined financial factors that affect retirement planning by Sacco employees in Nakuru town, Kenya. The specific objectives of the study were to assess the effect of income level, liquidity preference of individuals and financial literacy in retirement planning. Descriptive survey research design was adopted. Stratified random sampling technique was used to draw a sample of 96 respondents out of an accessible population of 126 Sacco employees working in Nakuru Town, Kenya. The study adopted a self-administered semi-structured questionnaire to collect primary data. Secondary data was collected from various institutional databases such as the Central Bureau of Statistics, the Ministry of Industrialization, Trade and Enterprise department of Cooperative Development and the Central Bank of Kenya among others. A pilot study was conducted to test the reliability and validity of the questionnaire. The reliability test was conducted using Cronbach's alpha (α) coefficient to test the consistency and coherence of the questionnaire. Validity was tested using content validity test. The data was analyzed using SPSS version 22 where descriptive statistical tools such as mean, mode, median, standard deviation and variance were used. Inferential statistical analysis was done by use of Pearson's Correlation Coefficient and multiple regression analysis to establish the relationship between the dependent and independent variables. Analyzed data was presented inform of tables, charts and graphs. The findings of the study will be significant as they may be used by government policy makers and regulators, human resource specialists, personal financial management practitioners, employers, employees and researchers. The findings of the study supported the research hypotheses that income level, liquidity preference of individuals and financial literacy affect retirement planning by SACCO employees in Kenya. The results also indicated that majority of the SACCO employees are between the ages of 18-50 and therefore are at the prime of their lifecycle. Thus, they need to plan early for their retirement so that they can accumulate sufficient retirement income. It was also observed that there is general apathy in discussing the important concept of retirement planning among the youth who think that it is far -fetched. We recommend that the Government, employers and other stakeholders develop deliberate programs to teach the general population about financial literacy skills so as to enhance financial inclusion in Kenya.


How to Cite
Mokaya, K. N., & Maina, K. (2017). Financial Factors Affecting Retirement Planning by Savings and Credit Cooperative Employees in Nakuru Town, Kenya. The International Journal of Business & Management, 5(10). Retrieved from