Retirement: The savings challenge

Like last year, Latin Americans are failing to realize the impact of longevity when looking toward and preparing for their retirement.

How has this impacted retirement ages? How are their savings stacking up to their expectations – are they prepared?

Greater longevity leads to added burden and expenses, and therefore drive up the official retirement age. Unfortunately, Latin American’s financial planning has not caught up for this reality.

In fact, many expect to retire years before official retirement age.

Retirement Savings and Longevity

Latin Americans will need to support themselves for a retirement that they estimate will last 20 years, replacing between 60% - 80% of their current household income.

This will need to come from mandatory pensions and Social Security as their savings would be exhausted in 1 – 2 years without these programs.

How much Latin Americans Are Saving for Retirement

But there’s hope – between 2014 and 2015, the proportion of Latin Americans saving for retirement increased from 67% - 69%.

This rate of increase far outpaces global retirement savings and is substantially greater than that of Europe (59%) and the US (60%).

The Proportion of Latin Americans Saving for Retirement

So how can Latin Americans get closer to their retirement goals? Further education is key.

Half of Latin Americans surveyed say they would save more for retirement if given the financial guidance that helps them understand what and how they need to save.

Items that would prompt Latin Americans to save more for retirement

More information about investing and cash allocation can help Latin American financial decision makers bridge the gap in their retirement savings.