Hi people.I just want to hear your views on something I have been thinking about.
I am a contract employee and as such not pensionable.I want to have some money on retirement (I'm 25yrs).
If I join an RBA approved pension plan and contribute 10,000sh/month for the next say 25yrs and with an annual return of say 6% on contributions,my amount at the end of the next 25yrs will be something close to Ksh.6,583,741.44

On the other hand,I could save 10,000sh/month and invested quarterly on stable NSE shares for the next 25yrs.

What makes more sense?What are your views on the pros and cons of each?Any other ideas?

The major benefit of pension saving in RBA approved plan not only reduces your taxable amount but also the pension can't be attached to settle your debts without your consent. In any event pension compounds and the earlier you start the better. Investment in shares is not risk free you may end up with a portfolio wiped out. I invest in both shares and pension and even though my shares have always done much better I can never stop contributing to pension- maalipo ya uzeeni. Am sure kids in the future will just throw us in old people's home and forget.

@lovely,mkonomtupu & 2012 thanks a lot.

I think I will find a way of doing both pension and shares at the same time.For pension,I was thinking of CIC "Jipange Plan"....anyone with experiences?I also heard Britak is quite ok.

For shares (especially @lovely2010), do you use CFC Online?

bird-man, if you save 10K through the pension you only have 7k deducted from your payslip(the effect of the tax advantage) so in effect you are getting 3k from the govt for every 7k you save. A very nice return.

This effect is only upto 20k contribution(both yours and employers), at which point I would revert to good ol' stocks.

@My 2 cents......Smart point right there on tax exemption!
I would think that a mix of both would be the best.That way you are shielded from total losses if anything bad was to happen in the NSE.