All Financial Wisdom

Saving For A Longer Life

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It is essential to modify our consumption patterns, considering that we have a whole life ahead of us and that, in it, the public pension will have very little space.

The end of the year approaches and the messages of insurers and other collective investment institutions are emerging with renewed strength. One thinks about retirement and the mind is full of gray hair, cataracts, rheumatism and other ailments that we associate with our grandparents. The sadness of a youth that is leaving invades us.

Although, if we dedicate a couple of minutes, we will realize the quality of life with which, in general, our parents arrive at ‘that’ age. Longevity is a very recent phenomenon from the historical point of view. For 60,000 years, 8,000 generations have been able to enjoy very little of the time they were granted; Life expectancy in the world remained around 30-32 years. Until the nineteenth century.

Babies born today will live more than 100 years. A Japanese person who retires today at age 60 may be waiting for the grim reaper for 45 years, living more years in retirement. Around the world, retirees will go from the current 600 million to more than 2,100 billion in 2050; Only China and India will contribute 600 million of them.

The overall dependency ratio, the proportion that measures the number of assets that each retiree maintains, will go from 8 to 1 today in the world to 4 to 1 in 2050.

To this situation of ultralongevity will be added a series of non-demographic issues that will need to be resolved. For example, today, approximately half of the world’s population works in the informal economy, without access to a retirement plan; In India, this number advances to 90% of its workers. And 48% of those who are of retirement age, today, do not receive any pension.

In an environment of low long-term growth, there is concern about the performance of financial assets in which workers’ savings materialize. It is expected that the future returns of the stock market will be around 5% below the historical ones, and that of the bonds will be at 3%. That also demands action.

That’s why you have to claim savings. That is why it is essential to modify our consumption patterns, considering that we have a whole life ahead of us. This situation is especially serious for women, who at lower current salaries and a longer life expectancy generate a gap between 30% and 40%.

Everything is changing. Two out of every three children who cross the Primary doors today will work in jobs that do not exist. During the first years of work, it has gone from working in 1.2 companies to almost three, in less than 15 years. The proportion of people over 65 working today in has doubled compared to 20 years ago, from one in 10 to one in five in some countries.

Just as 20 years ago sweating was frowned upon, and today, in our cities, it is impossible to pass without seeing a dozen runners. In order to carry out the cultural transformation that makes saving something sexy, not something sad or complicated, we must change our outlook. Our future is quite lilterally at stake.

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