Financial peace starts with being debt-free.
I will be retiring next year and I am scared. I am expecting a lump sum of about Sh6 million. I have three daughters and one son. Two of my daughters are married. My last-born daughter and son live with me. They are jobless. My daughter has two children who live with us. I take care of them. My son, despite being educated, has refused to take up jobs. He never holds one for long and has fallen into alcoholism. The way I see it, he is awaiting an inheritance.
I have worked all my life and have been reliant on a monthly salary. With retirement, I don't know what I will do with my time and the money I will get. I don't know what I will do with my two children living with me and how I can financially support them and protect my grandchildren. My monthly household budget comes to around Sh30,000. I live in my own house which I inherited from my late husband. I have a debt of Sh300,000 that I took to support my daughter's beauty salon which she closed after a year. I also have a church chama that I contribute Sh5,000 monthly. I pay tithe Sh10,000 and church contribution of Sh500 every Sunday. I do not have any passive investments as I have been investing in my children most of my career life. – Pamela
Rhina Namsia is the founder and Chief Executive Officer of The Acemt Consulting, a training and consultation company that provides financial planning and investment advisory
Before investing or using a single coin, clear all debts (Sh300,000). Financial peace starts with being debt-free. When the retirement money comes in, don’t rush into any decisions for the first three months. Keep it in a money market fund (MMF) earning 10-12 per cent per year while you plan clearly.
Create an emergency fund. This should cover at least 12-18 months of expenses. Keep it liquid but untouched, except for genuine emergencies or medical needs. Next, recreate your monthly salary. You’ve always lived on a salary, so don’t stop. The secret to a peaceful retirement is converting your lump sum into steady income.
Here’s a simple, realistic distribution plan for your Sh6 million: use Sh300,000 on debt repayment. Spend Sh600,000 to establish an emergency fund (in an MMF). Put Sh2 million in an income-generating investment such as MMF or T-bills). This will give you an income of Sh16,000 to Sh18,000 per month. Find a reliable sacco and deposit Sh1,000,000 for an income of Sh7,000 to Sh8,000 per month. You could build one or two bedsitters for rent, which could bring in Sh10,000 every month. Take Sh500,000 and create an education fund for your grandchildren and reinvest the income. Lastly, allocate Sh100,000 to church activities and your personal savings. With this, your total expected monthly income will be between Sh35,000 and Sh40,000, which should be enough to cover your needs comfortably.
Consider setting firm but loving boundaries at home. You have a good heart, Pamela, but this is the moment to protect your financial peace. You can help your family but through structure, not handouts. Help your daughter restart her salon smartly, not by giving cash, but by helping her rent a single chair in an existing salon. That way, she runs a lean operation with minimal costs. Encourage her to join a table banking group for accountability.
Create a matching system whereby if she saves Sh5,000, you add Sh5,000. This will teach her discipline. Avoid giving your son money directly as it will only feed his alcoholism. Offer help by paying for counselling. Involve a responsible pastor with good morals and standing, an uncle or connect him to rehabilitation programmes. If he refuses, step back in love but remain firm. Remember, your retirement money is for income, not inheritance. Use part of the education fund to pay your grandchildren’s school fees directly, not through their parents. This ensures you protect their future quietly and firmly.
Keep all your investment records
Now, here’s a realistic way to live comfortably on your investment income of about Sh40,000. Household needs and food Sh18,000, utilities (electricity, water, airtime) Sh3,000, tithe Sh4,000, chama contribution Sh5,000, grand children’s support Sh3,000, medical and transport Sh5,000, contingency and savings Sh2,000. Your capital remains untouched while financial independence is maintained.
Rediscover your purpose after retirement. The sudden lack of routine can make retirees feel lost. Replace your working hours with activities that give meaning and structure. Ideas you can start immediately include offering private tutoring or home-based lessons to local children, volunteering in your church’s mentorship or youth programme, starting a small kitchen garden (this is both therapy and food security), and joining a retirees’ group to share experiences and stay socially active. Continue with your chama, but focus on investment, not lending. This will keep your mind sharp, your heart fulfilled, and your days purposeful.
Now that you have assets and dependents, protect them wisely by writing a simple Will (through a local chief or lawyer) to prevent disputes. Keep all your investment records, PINs, and account details safely in one file and appoint one trusted person, preferably one of your married daughters to know where your documents are.
Avoid joint accounts with your son or dependents. Instead, keep clear documentation and authority.
At the end of it all, you'll have a new retirement mindset. Your goal is not to spend your lump sum, it is to make it produce income for you every month. Your money must serve your future, not your past. By keeping this discipline, you’ll have peace, dignity, and the joy of helping your family without losing your own stability. You have already lived a life of service. Retirement is not an ending; it is a new beginning. You now get to live on your own terms, slower, calmer, and with purpose. With a structured income plan, clear family boundaries, and a focus on your well-being, your Sh6 million can comfortably sustain you for the rest of your life while still allowing you to bless others. You’ve taken care of everyone else. Now, it’s time to take care of you.
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