The clock of age does not stop and that is why you must organize your saving to have a withdrawal worthy. That being said, the future is uncertain for most people economically active. Specialists predict that the funds from the Afores will not be enough to aspire to an old age without financial worries.
In the National survey on the situation faced by people of retirement agemade by the Mexican Association of Afores (Amafore), it is revealed that only 37% of this sector made some savings or investment on their own initiative.
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Meanwhile, according to figures from choruseven out of 10 Mexican men and women are worried about running out of money in their retirement, while 57% have not tried to find out how much they need to save for their retirement.
So, if you want to avoid encountering this type of problem, we present an alternative to start saving and have fewer worries once your retirement arrives: Have you been talking about the 4% rule? We tell you what it is about.
An easy way to save
The 4% rule tells us how much of our savings we can allocate to retirement without neglecting other areas of our lives. Namely, determines how much we must save to retire and maintain a decent standard of living until then.
This method arose from studies carried out by three professors at the Trinity School in the United States. The 4% rule says that you can take 4% of the total fund for your retirement per year and that will be enough to keep you with your desired income (and increase it with inflation) for 30 years.
For example, if you want to receive 20,000 pesos a month in your retirement, multiply by 12 (the months of the year) and get 240,000 pesos. You must divide this annual figure by 4% (0.04) and the result will give you the amount of money you need to have when you retire: 240,000 ÷ 0.04 = 6,000,000 pesos.
Using this example, you would need 6 million to have that 20 thousand a month. The rest of your money can remain invested in a very safe short-term fund -or even a moderate one- so that it continues to generate returns.
fintuala startup specialized in the investment sector, points out that the sooner you start with this method, the better results you will have when investing: “Do not underestimate the value that 300 or 500 pesos a fortnight can mean for your retirement.”
Once you have applied the 4% rule and know how much money you need to withdraw, you can use this simulator to plan your retirement plan, improve your pension and take advantage of tax benefits.
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