Over 60% of Brazilians don't save for retirement
More than half of Brazilians in the labor force do not save for retirement and rely only on state-funded pensions for their future retirement living, according to a survey released Tuesday (Jul. 5) by Brazil's SPC credit reporting agency.
The study indicates that 74.1% of workers pay money into Social Security, either as employees or self-employed persons, but apart from that, six out of every ten respondents said they do not have any savings or investment schemes in place to see them through retirement.
SPC Chief Economist Marcela Kawaut says the survey confirmed the experts' existing perception—Brazilians do not plan ahead for the sharp income declines facing them when they have to stop working permanently. “Yet, as they age, health insurance gets more expensive, and they become increasingly susceptible to medical conditions that require them to take expensive medication,” she noted.
In addition to the fact that state-funded pensions fall well short of a person's income while in the labor force, the economist pointed out, conditions for retirement on state-funded pension schemes can become stricter when the government's plans to change Social Security are rolled out. This makes it advisable to look to an investment or savings plan as an alternative to boost income at retirement.
More than poor finance education, however, the study revealed that financial constraints are the main reason why Brazilians do not take steps to ensure their incomes are consistent with their existing living standards when they retire.
“I've got no money to spare,” said Cintia Borges, a 45-year-old massage therapist from Brasília who works under a formal employment contract and has two children. “I wish I had, though—I shouldn't rely on a state pension alone. I wouldn't even consider retiring and never working again.”
This view is shared by 38.8% of respondents, who said they can already begin to expect their living standards to decline if they retire. Another 13.3% believe they can never afford to stop working.
Among those who said they do have some kind of investment strategy in place to boost their incomes at retirement, 19.2% said they use savings accounts. Only 6.2% of respondents said they have private retirement insurance, and 6.1% said they have real estate investments. The average saved amount is $79 a month.
Translated by Mayra Borges
Fonte: Over 60% of Brazilians don't save for retirement
