Life expectancy is increasing, that makes retirement years lengthen. In an idyllic setting our retirement pensions would be enough to keep us calm, unfortunately the picture may not be like that for many people.
There are many surveys carried out in countries such as the United States, Germany, or the United Kingdom, in which we begin to see a trend that will undoubtedly come to us: more and more people are afraid to survive their own savings and stay No money during retirement .
You might think that this is only applicable in countries where public pension systems are different from ours, in this article you can learn about different pension systems by country , but, an increasingly aging population and the public pension system do not predict Nor is a great future in our case.
In our pension system active workers are those who keep retired workers . The proportion goes down so that each time, and in the future more, less active workers will have to keep more people retired . The conclusion is simple; The pension system will either end up being reformed or disappearing as such, but in any case the pensions will be lower in amount than we know.
Running out of money in retirement
In our country, at least today, there are both contributory and non-contributory retirement pensions . The first are the ones we know, those pressures that are granted to us when we reach a minimum of years worked and quoted. The latter, of much smaller amount, are granted to those people who do not reach the minimum requirements in terms of years quoted to request a contributory retirement pension .
In both cases, especially obviously in the second, the income derived from these pensions will generally be low and will force us to modify certain aspects of our lives, unless we have accumulated money thanks to retirement savings through tools such as savings insurance or pension plans among others.
The real possibility of running out of money in retirement is there. It is evident that with minimum income it is very difficult to maintain the pace of life that we have been able to lead during our working life.
It is true, that, it is assumed, some expenses will be reduced: housing in most cases will already be amortized, expenses related to the development of our professional activity are eliminated, and, generally, also general and consumption expenses decrease.
In the health section is where we have the best panorama. On the one hand the concept of universal health that is handled in our country, provides the necessary medical and medication care and even to those with non-contributory pensions.
A high life expectancy and a very low income during that retirement period may mean that, as is already the case in other countries, we have to make drastic decisions . At this point it is assumed that the children are already emancipated and therefore these decisions can be valued.
Selling the house and moving to a house of lower value and with lower maintenance costs is one of the most interesting actions in this period of our life , when the money we manage is not enough to maintain the adequate standard of living.
As for consumption and leisure are the part that most resents without a doubt if we do an exercise in futurism. For those people who run out of money during retirement both consumption and leisure will be areas in which to measure every penny of euro spent.
You can avoid running out of money in retirement
The truth is that you never know what can happen. Obviously, who runs out of money during retirement does not do so voluntarily, that is, it is the circumstances that lead him to that situation.
In a labor market model in which fixed contracts have become a rare advertisement in the offer of employment , situations of few years quoted or even lack of years quoted for the contributory pension may be increasingly.
The only possible tool to use against this is saving
Save as soon as possible, save in a sustained manner over time and save with awareness of the future. These are three basic keys that will allow us, through different saving tools, to be able to accumulate money to use it to complement our income in retirement. This message is so basic that it should be part of our financial life since it begins, even before entering the labor market.
It is true that when you are young it is hard to think about the future, and more so in a consumer society where immediate spending is almost a consumption dogma. But the truth is that those people who better control their personal finances from an early age, and are used in depth in savings, can more likely avoid the worries of an old age with economic problems.