Tomorrow it won’t be possible to pay today’s pensions

Social Security accumulates losses of 100 billion from 2010 to 2018. The Court of Auditors warns that Spain must solve a financial sustainability problem of a “structural nature”.

In 2020, damages wreaked by COVID-19 have reduced Social Security revenue in proportions similar to the drop in GDP. Expenditures continue to grow due to the retirement of the baby boomer generation, increase in life expectancy and the decrease in the birth rate.

We are living with greater concern about retirement. Young people don’t even want to think that they may be eligible tomorrow and middle-aged people aged 45-54 are truly concerned and need to make decisions now. It may be complicated later.

Pensions are not payable, sustainable, or sufficient.

We reflected on the future in the months of confinement. We have learned that “health comes first”. Health is a problem of time that is solved with fast attention. Now the level of saturation and delays in tests and diagnoses in Social Security is much higher. There are private insurance alternatives and the time to hire them is when we are well. Everything becomes complicated afterwards.

The second reflection is how we guarantee our purchasing power.

The Government has created the Longevity group with 100 experts who have designed “Spain 2050”. One of them is José Antonio Herce. He affirms that “pensions, as they are thought of today, will not be able to be paid: we need changes that make pensions payable, sustainable and sufficient.”

When our working life ends, we will need a supplement. We will need to have a Plan B designed to match our income. It is difficult to choose Medical Insurance, a Savings Plan or a Retirement Plan appropriate to our ability to save, financial commitments, family responsibilities or age…are we 30, 40, 50 years old? There are solutions that adapt to everyone. You need a professional to advise you.

At our brokerage, you have experts at your disposal that can guide you in choosing the option that best suits your personal circumstances and needs.