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Will Young Latinos Have A Pension When They Get Old?

The debate always remains open when it comes to pensions. A good number of young people consider this saving for old age as an illusion due to the increasing retirement age, the number of weeks contributed, and the aging of the population, which would prevent a good stable allowance in the last stage of their lives.

Older adult with a younger person

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LatinAmerican Post | David García Pedraza

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Leer en español: ¿Tendrán los jóvenes latinos pensión cuando envejezcan?

The pension is seen as a privilege in Latin America, not all people can have a decent allowance in old age because informal work is very high in Latin countries. With daily expenses and excessive debts, informal workers do not consider it important to contribute to social security, so they find it necessary to continue working in old age, fearing that they will not be able to continue with their activities due to health problems and refusing to have a good retirement.

Young Latin Americans understand the importance of having a pension, and to achieve this, formal employment is the sure way to obtain it, however, with several pension reforms where the pension age is increased and the weeks of contribution, the aspiration to being able to enjoy the savings made during working life, adding the financial crisis and the hard work to obtain assets, such as cars and a house of their own.

Also read: How much should the salary increase after a year of inflation?

Despite these factors, several young people continue to contribute to their social security by law, both in private and public schemes, although the question of Will I ever be able to see my pension? It is a constant in the conversations of the youth and young adult population.

Large Pensions And Age As Factors Of Disbelief

One of the main issues when talking about pensions is the amount that individuals will receive. Each country has autonomy in deciding its percentage. For example, in Colombia, those who are in the public system receive 70% of the salary they received while working every month, making an average of their salaries during the ten years before their retirement.

However, the 'mega-pensions' are a latent problem in society because, if a person earned 20 million pesos a month, by law they should receive 14 million as a pension, however, there are no workers who every month pay that amount, so embezzlement begins in the pension equation.

Another factor that is beginning to be visible in the region is the rise in the rate of longevity in societies. Day by day in the population there are more adults than there used to be before, so the balance between old age, adulthood, and young adulthood is destabilizing, which leads to a serious problem of financing the pensions of the oldest. If no youth contributes to the pension, there will be no pensioners shortly.

According to the World Bank, by 2050 it is expected that people over the age of 65 will be double what it is today in Latin America, therefore there will be fewer people of working age and with this scenario, it is difficult for them to dare to contribute a pension. For its part, the Inter-American Development Bank has estimated that countries like Chile, Colombia, Brazil, and Uruguay could be compared with Germany and Japan by 2050, where older adults reach 30% of the population, and in countries like Guatemala and Bolivia. people older than 60 years would represent 15% of the population.

A Brief Look At Pension Requirements In Latin America

The countries, in their freedom of governance, have different pension systems, although all are aimed at ensuring a dignified and peaceful old age.

Age is one of the variables in each of the nations of the continent. For example, Paraguay has established that both men and women retire at the age of 60 and at least have completed 25 years of contributions. For its part, Venezuela is the country where people achieve retirement faster when women turn 55 and men turn 60, both genders must comply with a minimum of 15 years of contribution.

On the other side of the scale, where it takes the longest to obtain a retirement are Argentina and Brazil, in both countries the minimum retirement age is 60 for women and 65 for men, however, in Brazil a minimum of 15 years is required contribution, while in Argentina there are 30, for both genders.

Although there is a common denominator in pension ages in Latin America, the increase in life expectancy has led several nations to debate the right age to retire, and this small discomfort has led to the Inter-American Multilateral Agreement on Social Security discuss more and more on this topic. The purpose of this agreement, of which 15 countries are part, is to allow any individual, who belongs to the attached nations, to access their pension in the country they like to do so.

New Discussions In Latam.

El Salvador recently approved a pension proposal where the amount of the pension will be increased by 30%, early withdrawal of the same will be prohibited, and, the article that has caused the most controversy, the government will be able to access these savings without limit, which gives him the right to allocate this money to what is considered necessary and urgent using a presidential mandate.

With this reform, the promise that the government had made to guarantee a minimum pension of 400 dollars fell, which finally came to just over 304 dollars.

Also, a case that is curious in the region has been the reform proposed by Gustavo Petro in Colombia, where, with the affirmation that three million older adults are on the street because they could not quote a pension at the time, The system between public and private regimes must complement each other since, finally, the only regime that ensures an allowance every 30 days is the public one, and it is where young people are the least present. And on the other hand, when the retirement age is reached, the private funds put obstacles so that the individual can obtain his savings.

Pensions are the method to obtain a dignified old age, although at the cost of adulthood that is approaching ruin.