The SanlamAllianz Retirement Benchmark Report Kenya 2026 says that costs of treating serious illnesses can erase up to eight years of pension savings for retirees.

Based on a benchmark monthly retirement income of KSh21,900, the report estimates that a public hospital admission for stroke would consume the equivalent of 11 months of pension income, while treatment for stage III cancer in a public facility would take about nine months.

In private facilities, the same stage III cancer treatment would require the equivalent of 45 months of pension income and a private hospital admission for stroke could absorb income equal to 99 months.

“Common serious health conditions can generate medical expenses equivalent to many months, and in some cases several years, of pension income. The comparison illustrates how quickly a major illness or ongoing treatment can place pressure on retirement finances,” the report says.

Survey data in the report show that 61 per cent of retired respondents are worried about the cost of healthcare or medicines, and an equal share doubt that their existing cover is sufficient.

Additionally, 42 per cent say healthcare is difficult or very difficult to afford, and 24 per cent report paying most of their medical expenses out of pocket.

The findings also indicate that medical insurance does not fully protect retirees, as premiums, co-payments and costs beyond benefit limits still erode savings.

“Healthcare is already on people’s minds, but concern has not yet translated into clear financial provision, medical expenses could compete with everyday living costs for the same pool of retirement income,” the report adds.

More than half of respondents – 53 per cent – have either thought about post-retirement healthcare costs without saving for them or have no plan at all, while only 21 per cent have set aside dedicated funds for such expenses.

Another 23 per cent expect to rely on their pension, investments or general savings to cover medical bills.

The Retirement Benefits Authority’s 2024 Pensioner Survey found that 54.9 per cent of pensioners receive less than KSh20,000 a month, roughly KSh21,900 in 2026 terms, underscoring the vulnerability of many retirees to large hospital bills.

The report argues that traditional retirement planning, which mainly targets replacement of employment income, must incorporate potential healthcare costs and the number of years retirees may need medical support.

It warns that a pension balance appearing sufficient before retirement may become inadequate once serious illness reduces the money available for routine household spending, especially as many Kenyans face competing financial obligations during their working years.

Respondents cited family costs, irregular income and debt repayments as barriers to building separate medical reserves.