Nssf is not a pension fund. for the current year, it pays 5% pa but this varies annualy as directed by the relevant minister. Any savings in NSSF can only be accessible when you retire from age 50 years. If you are employed the contributions are tax free. NSSF, I doubt if there's an option for retirement before age 50. I think that can only happen under medical conditions where the contributor becomes permanantly disabled and not able to work anymore otherwise you must wait till you are at least 50 years. Under insurance pension plans the contributions are also tax free if you are employed, you will pay the insurer management fees annually (or as prescribed in the contract), and you can "retire" and your own chosen time subject to the minimum years prescribed by the insurer running that pension plan. I think there are penalties and tax elements for "early Retirement" Insurance based Pension plans have higher returns usually averaging 8% and above per annum

Both NSSF and insurance pension plans, Lumpsum benefits beyond certain limits are taxable am not sure how much but i guess any lumpsum beyond 480k is taxable. I dont have much details unless I gather other details and share with you later. On the loan, yes, you can use the savings in both NSSF and Pension plans to secure loans against mortgages and I mean mortgages only not any other kind of loan.

Have a peek at the KRA website for a view of the tax excemptions!!!

I know the title of the thread is NSSF vs pension plans offered by insurance, but have you considered 'Saving Through Stocks'?

And why are you planning to 'retire' at 60? Why not earlier? Set loftier goals

...yes. A long time for stocks to massively outperform other instruments of generating money...

@kiterunner
Check out ICEA's and Alexander Forbes' individual pension plans. Both run very professionally.

http://www.icea.co.ke/fo...-retirement-scheme-prs/

http://www.aforbes.co.za/kenya/L-Vuni.htm


I wouldn't advise you to save for your pension using stocks, you're right, they're too easily accessible and you would have to essentially manage your own retirement scheme, not sure how wise a decision that would be. Diversification here is key.

Stocks are an excellent investment vehicle, but profits can be channeled towards other more immediate or medium term goals.

All the best.

8 years later this is still a useful thread. Ahsanteni!
Wacha niwaulize. What about NSSF for self employed. I know they recently upgraded the rules so can someone update us on how it works. For example if MM has extra 100k idle cash lying around that he wants to squirrel into NSSF as a "last case resort" under the self-employed category incase God-forbid he loses his shirt and is destitute by age 50 (by the way was this age changed?), regardless of the paltry returns, will he get paid a lumpsum or malipo za pole pole. Thanks in advance nduguzanguni.