The pensions of the future will be low: this can be done to have a good stand...

emonseo21

Pensions in the future are going to be lower than those now , especially the highest pensions. Until now in Spain we have trusted that after having contributed at the top of the table for a series of years, we will have a good pension. That is something that is going to end, because the public sector does not seem to be going to provide it to us, not least because of the capacity to do so. What can we do?

Fortunately, we can still do a lot on our side to have a more comfortable retirement than what the public sector will provide us. Choosing a pension plan well and purchasing a primary residence (and an appropriate primary residence) can go a long way to making retirement more enjoyable.


Pensions will be lower
Retirement
From the reforms carried out by the Popular Party a few years ago to the reforms being carried out by the coalition government between PSOE-Unidos Podemos, the Spanish pension system is changing from a Bismarck system (contributory type used in countries like Israel , France, Germany or Finland) to a Beveridge system (of the type of care used in countries such as Great Britain, Canada, Denmark or the USA). This system is potentially cheaper, because it offers lower pensions to the population, at least it does not have the capacity for someone to receive dou  Romania Email List  ble or triple as much as someone who has contributed less time and smaller amounts.



This “silent” or “ back door ” reform has been criticized, especially because it has been carried out on the basis of several small reforms and without any debate in the public space or in the media, but it has been underway since Here We have spoken several times that this reform is advancing slowly and inexorably based on patches that are being included in our regulatory framework. This is one reason why our pension system has not exploded until now. We have been talking about this in , both in El Blog Salmón and other media, such as Nada Es Gratis.

But today it is not time to talk about the reform (or how they should have been reformed) , something that Alejandro already did , now it is time to talk about what we can do so that in a future of lower pensions, we do not experience such a high decrease in purchasing power How will we suffer if we do not put any means.

It is possible that we think that once we retire, expenses will decrease, it will not be necessary to travel to work every day, so we can still do without a car and its associated expenses, we may not need to eat out as much or spend money on clothes and that children are older and have their own income, but the opposite can happen. According to Dan Ariely, professor of behavioral economics at Duke University's Fuqua School of Business, we will need % of our expenses due to more free time.

What I can do?
Retirement
The first thing of all is to quantify the economic needs. Each person knows the level of life they want to lead, but do we know how we could maintain it? At some point we have talked about the % rule , which according to its creator could be %, although there are those who say that it should be more conservative and withdraw between and %.

Basically what this rule says is that we could withdraw % from a capital indefinitely, maintaining the initial capital and living off said income. And that adjusted for inflation. That is, if we have , euros saved we could withdraw , euros per year permanently and we would not lose purchasing power. Our life expectancy is not eternal, so in that sense we could recover more than % of the capital of savings.

In this sense, the sooner we start saving the better, since the greater the effect of the capitalization of our investments (and their accumulation through compound interest). That is, the sooner we start saving for this moment the better. The recent tax reform of pension plans, limiting the tax deductions (which we warned was the government's intention ) for contributions to these products to €, per year will not allow us to make large contributions, but it does establish a limit to which many economies will be able to arrive. If we do not want to give up liquidity, we can always opt for an investment fund (losing tax advantages, of course).