OPINION: Why more retirees are looking for flexibility in how they access their pension

By Albanus Muthoka

I recently spoke with a gentleman who had been retired for six years. I'll call him Peter.

When Peter left formal employment, he thought he had planned carefully for retirement. He had calculated his expected expenses, settled on a comfortable monthly income and looked forward to a slower pace of life. But retirement had other plans.

Within a few years, his son had returned home with his children after losing his job. He found himself paying school fees he had never budgeted for. He also accepted consultancy work that generated additional income, reducing his reliance on his pension for a time. More recently, rising healthcare costs have become a bigger priority than travel or leisure. His retirement had not gone off course. It had simply evolved.

That conversation reminded me that while we spend considerable time helping people prepare financially for retirement, we spend far less time discussing how retirement itself changes over time.

Much of retirement planning is built around assumptions. We estimate how much income someone will need, what their monthly expenses will look like and how long their savings should last. Those assumptions are necessary, but they are rarely static. Retirement is shaped by life events as much as financial calculations.

A child may return home unexpectedly. A spouse may require long-term care. A business opportunity may emerge. Healthcare costs may rise sooner than anticipated, while other expenses fall away altogether. Some retirees continue earning an income well into their seventies, while others stop working entirely on the day they retire. No two retirements follow the same path.

Yet retirement income is often approached as though they do.

Perhaps this is because we have become very good at helping people accumulate wealth. We encourage regular pension contributions, promote long-term investing and remind people to start saving early. These are all important conversations. But accumulation is only one part of retirement planning. The equally important question is what happens after the final payslip.

How should retirement savings provide income over a period that could last twenty or thirty years? How should retirees respond when their financial needs change? And how much flexibility should a retirement income solution provide as life evolves?

These questions deserve greater attention because retirement today is very different from what it was a generation ago. People are living longer, remaining economically active for longer and increasingly viewing retirement not as an end to work, but as a transition into a different phase of life. Financial solutions should reflect that reality. This is where income drawdown arrangements offer an important alternative for retirees who value flexibility.

Unlike retirement income solutions that require a once-off decision at retirement, income drawdown allows retirees to keep their pension savings invested while drawing a regular income from their fund. The income can be reviewed periodically, within the applicable regulatory framework, allowing retirees to adjust their withdrawals as their circumstances change.

For someone like Peter, that flexibility matters. During the years he was consulting, he needed less income from his retirement savings. When family responsibilities increased, he required more. As his priorities shifted again towards healthcare, his retirement income strategy needed to evolve with them.

Income drawdown recognises that retirement is not a single financial event but a phase of life that evolves over time. Retirement demands resilience, thoughtful planning and, increasingly, the freedom to adjust course when circumstances change. As financial needs change, retirement income should be capable of changing with them. We should have that conversation more often.

Albanus Muthoka is the Asst. General Manager – Operations at Enwealth Financial Services Limited.