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Preparing for retirement

Why do we go to the labour market?

The only reason you are in the labour market is to offer or sell your services in return for income which enables you to pay for your needs including food, rent, education, self-improvement, savings, and investment among others.

However, the time is soon coming when you have to retire from the labour market for reasons of old age, sickness, and un-competitiveness among others.

If you are in employment, the actual age for retirement will mainly depend on the terms and conditions of your employment.

Generally, your retirement period starts when you stop receiving a salary or any compensation for services rendered on the labour market.

What is the challenge in retirement?

Your challenge in retirement is how to finance your needs when you are no longer earning regular income from your labour.

It is a challenge if one does not save and invest during the working phase of his or her life.

When does savings and investment start?

The savings and investment for retirement should start as soon as you earn your first income however little it might appear. It is never too early to start saving and investing.

The demands on your income will become more and more as you grow old making it difficult for you to save.

You have therefore to develop the saving and investment discipline as soon as you start earning.

Rules of life

Healthier, Happier, and meaningful retirement is a personal choice and no one else can do it for you.

Hence there is a need to develop your own rules of life that will guide you as you walk your journey.

Your rules of life will keep you focused on your retirement goals.

Rules for spending income from labour

The following will guide you in spending your income on various expenditure items including your improvement and financial stability.

Remember you are the cash cow and therefore you have to take care of yourself to ensure that you can generate personal income until the creator recalls you from this world.

Therefore, your first rule should be to enhance your capacity to earn income whether employed or not.

The guidelines/rules for spending my income from employment are proposed as follows;


Expenditure heading



Food, rent, leisure, and other household items



Education of  household members including self-improvement



Community activities



Savings and investment



From the above 65, 5 and 30 per cent of the income was spent on family, community and savings and investment respectively.

It is important to include a carrot and stick rule to guide you on what steps you should take when you break your own rules.

Savings and investment

Savings is the amount of money you set aside from your current income for future use especially during retirement when you do not have a regular salary or income from employment.

Investment is the practice of turning your savings into assets that have both the potential to generate income and grow in value over time.

The aim is to have adequate assets during your retirement period that will give you adequate income to fund your needs during retirement.

Expected lifespan

Somehow you have to decide on your lifespan or expectancy as both your assets and income accumulated in your retirement scheme have to be spread over your lifespan.

You have to manage the risks of overstaying your assets or living longer than them.

For purposes of example let us assume your projected lifespan is 85 years and you plan to retire at 65 years when your accumulated saving and investment is standing at Uganda shillings 3 billion.

The 3 billion therefore will spread over 20 years (85-65) giving you access to UGX 150 million per year. The amount to be accessed may be adjusted in case of any adjustment in the life span.

Areas to invest in

It is advisable to spread your savings over various assets that will preferably earn a return and grow in value over time. 

The distinct types of assets available in Uganda include the following among others;

  • Property
  • Government treasury bills and bonds
  • Shares in listed companies
  • Fixed interest-earning deposits
  • Interest-earning cash

Your investment approach will mainly depend on your risk appetite and the degree of liquidity you wish to include in your portfolio.

Liquidity refers to how quickly an asset can be sold on the market without incurring substantial losses.


It is important to plan for a healthier, happier, and more meaningful retirement.

The issues discussed above have to be localized to your particular situation before being adopted.