Consider stocks, bonds in retirement plans: experts

Dar es Salaam. A new survey by FinScope Tanzania has revealed a significant gap in retirement planning, with 28 percent of adults aged 55 or below lacking any plan.

This has prompted financial analysts to advocate increased investment in stocks and bonds as a solution.

The data from the survey also shows that 8 percent of the people expect their children to take care of them when they retire, and two percent depend on money from friends and or relatives.

Speaking during an investment talk event organized by Vertex International Securities in collaboration with UTT AMIS over the weekend, analysts emphasized the benefits of stocks and bonds for individuals to secure their financial futures and enjoy a comfortable retirement.

Vertex Securities International official Mr Frank Kakwezi said one of the financially sound retirement plans that people should consider during their active years are the long term treasury bonds.

“Bonds offer relative risk-free investments as they are issued by the government. This inherent stability stems from the fact that government-issued bonds are backed by the full faith and credit of the issuing government, making them a secure option for investors seeking to safeguard their capital,” he said.

Mr Kakwezi also elaborated on their transferability, meaning that bondholders have the flexibility to buy, sell, or transfer their bonds as needed, providing liquidity and ease of management within retirement portfolios.

“Bonds possess the advantage of being eligible to be pledged as collateral, allowing investors to access additional financing or secure loans against their bond holdings,” he said.

Mr Kakwezi said in addition to their stability and versatility they also have competitive rate of return providing consistent, predictable income streams through periodic interest payments.

Director of Marketing at UTT-AMIS, Mr Daudi Mbaga, emphasized the potential of the stock market in catering to retirement needs.

 "The stock market presents a myriad of opportunities that retirees can leverage to secure their financial future,” he said.

Unit Trust of Tanzania Asset Management and Investor Services (UTT AMIS), was established and vested with the several key activities including the development of collective investment schemes; acquiring and keeping in trust the shares of privatized enterprises and encouraging savings culture through wide participation in the ownership of distributed shares / units.

Highlighting the success of UTT AMIS's Bond Fund, Mbaga noted the growing interest among retirees in exploring investment avenues beyond traditional options.

Mr. Salim Rashid, a participant at the event, emphasized the need for greater awareness and understanding of investment principles.