With a Ksh3 Million Retirement Package, Where Do I Invest? I Don’t Want Anything Stressful 

"I am 61, I retired as a civil servant last year after more than 37 years of service. I got a retirement package that I have kept in an MMF as I have been thinking of how best to invest it. I do not want anything to do with land as I have multiple idle investments and I do not want the stress that comes with building on those pieces of land. I also do not want a business that will require me to spend more than two hours of my time. The retirement package is Ksh3 million." Peter, Buruburu.

Here is a comprehensive guide that builds on the sound advice provided, detailing a structured investment plan designed to achieve low-stress, steady income and long-term financial security.

Consider Low-Stress Investments

Low-stress investments, like annuities that can start paying you immediately after a lump-sum investment. They are excellent options because they require minimal time and effort to manage while providing predictable income.

Read Also: Do I Move My Retirement Savings from a Sacco to  Retirement Scheme or Use an MMF? Money254 Cash Clinic

Combine Protection and Investment

A smart strategy involves striking a balance between protecting your principal and investing for future growth. A medium-term financial plan can help secure your retirement while gradually increasing your wealth.

Year 1-2: Foundation and Protection

This stage focuses on securing your financial foundation and ensuring liquidity for immediate expenses.

• Government Bonds (10-15%): Allocate around 10-15% of your retirement funds to government bonds. These bonds are low-risk and provide fixed returns, typically in the range of 12-15%. They are an excellent way to safeguard your principal while earning predictable income.
• Money Market Funds (20%): Place 20% of your funds in money market funds (MMFs). MMFs are liquid, meaning you can access your money quickly if needed. They provide better interest rates than traditional savings accounts, making them ideal for short-term financial needs.

Read Also: With a 50K Salary, How Do I Balance Saving in a Sacco & Buying Shares?

Year 3-5: Growth and Passive Income

Once your foundation is secure, it's time to focus on growth and generating passive income to sustain your retirement.

• Annuities (30%): Invest 30% of your funds in an annuity product. Annuities guarantee a regular income for a specified period or for the rest of your life, depending on the plan you choose. This ensures a steady cash flow, offering financial peace of mind.
• Endowment Policy (30-40%): Allocate 30-40% of your funds to an endowment policy. These policies combine insurance coverage with investment returns, providing guaranteed payouts at the end of the policy term.

By following this approach, you can enjoy a secure and stress-free retirement. The key is to strike a balance between protecting your wealth and generating enough income to support your desired lifestyle. 

Read Also: I Got a Job Offer Paying Ksh20k More in Net, But No Benefits, Should I Take It?

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