Kiota

Why is it advisable for you to wait until retirement before accessing benefits? (i) Surveys carried out by Retirement Benefits Authority show that many workers who are paid their benefits when they change jobs use them on consumption expenditures, such as household goods, weddings and buying cars. Statistics also show that because of accessing benefits every time they change jobs, these individuals end up with very low benefits at retirement despite having saved for 30 to 40 years. (ii) Most Kenyans are not knowledgeable about investments, and therefore lack the right skills to make sound investment choices. The reality is that up to 90% of start-up small businesses wind up within two years. Even if one is an investment professional, he or she is unlikely to earn as much return investing individually as they would have earned from the scheme for three reasons: • Individual investments earn periodic simple interest, dividends, rent, interest, which are too small to reinvest, while the scheme earns compound interest by immediately reinvesting all income; • Through pooling, many small investors enjoy economies of scale in investment which results in lower costs and higher returns. Additionally, a scheme can invest in instruments which are not available to small investors due to the prohibitive minimum requirements. These include treasury bills, commercial papers, real estate and high price share; • Benefits paid out before retirement ages are subject to punitive taxation rates compared to benefits paid at retirement. Also, retirement benefit schemes do not pay tax on the investment income they earn. An individual investor will pay hefty withholding tax on all the dividends, interest, rent or profits that you may earn.

Why is it advisable for you to wait until retirement before accessing benefits? (i) Surveys carried out by Retirement Benefits Authority show that many workers who are paid their benefits when they change jobs use them on consumption expenditures, such as household goods, weddings and buying cars. Statistics also show that because of accessing benefits every time they change jobs, these individuals end up with very low benefits at retirement despite having saved for 30 to 40 years. (ii) Most Kenyans are not knowledgeable about investments, and therefore lack the right skills to make sound investment choices. The reality is that up to 90% of start-up small businesses wind up within two years. Even if one is an investment professional, he or she is unlikely to earn as much return investing individually as they would have earned from the scheme for three reasons: • Individual investments earn periodic simple interest, dividends, rent, interest, which are too small to reinvest, while the scheme earns compound interest by immediately reinvesting all income; • Through pooling, many small investors enjoy economies of scale in investment which results in lower costs and higher returns. Additionally, a scheme can invest in instruments which are not available to small investors due to the prohibitive minimum requirements. These include treasury bills, commercial papers, real estate and high price share; • Benefits paid out before retirement ages are subject to punitive taxation rates compared to benefits paid at retirement. Also, retirement benefit schemes do not pay tax on the investment income they earn. An individual investor will pay hefty withholding tax on all the dividends, interest, rent or profits that you may earn.

Based on experience, we believe that financial professionals serving MSMEs are also disseminators of financial knowledge. Many MSMEs do not have financial statements, and some are not even transparent or do not follow standard procedures. So, we have to educate them all the basics, including the importance of employee engagement and credit lines and the benefits of savings, and keep them posted on the supporting policies and tax incentives of the state. Account managers of inclusive finance should be familiar with all the above-mentioned information and they take on many social responsibilities beyond financial ones. #kiota #inclusive #finance #MSMEs

Ndio sasa!

Part-time employees have historically faced barriers to accessing their company’s retirement plan. Prior to Kiota, only 19% of part-time private sector workers had access to a plan, compared to 77% of full-time employees. However, the introduction of the Kiota Flexi-Saver has enabled more part-time employees to save for their futures. This platform represents a significant shift towards inclusive #retirement planning, expanding accessibility for more employees to save for their future, including long-term, part-time #employees. To learn more about the new resource, check out our website www.mykiota.com

Currently set at KES 240,000 per annum (or KES 20,000 per month), the proposed Finance Bill 2024 amendment seeks to raise the non-taxable limit for contributions to KES 360,000 per annum (or KES 30,000 per month). Yes. A 50% INCREASE! This adjustment is expected to incentivize individuals and employers to retire ready as a higher portion of their contributions will be tax-exempt. As the retirement landscape evolves, it is essential for individuals and businesses to stay informed and adapt their savings strategies accordingly. https://lnkd.in/dTV2rvxP #kiota #retirement #financebill #2024

Kiota allows more individuals to take control of their financial destiny...with help from their organizations.

Our product designer, Stephen Owoko talked about mentorship and his journey. Steve has played a monumental part in Kiota and mentoring our young team.