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Despite being confident about being on track to meet their retirement goals, Latin Americans are still concerned about outliving their savings and burdening their families.

To what extent do you think you are on track to achieve the income you want in retirement?

The majority are preparing and confident about their retirement

Nearly three quarters of Latin Americans have started saving for retirement. Seven in ten of those saving for retirement are contributing more than the mandatory amount, with saving into a private plan being more popular than making additional contributions to a workplace plan. Among savers, 67% are confident that they will have the retirement income they need. Here, we see a significant gap in confidence between male and female savers, with women lagging 9 points behind their male counterparts.

Non-savers list face significant barriers to start saving

Confidence about retirement prospects, while still high at 60%, is lower for those not saving for retirement. Among those not saving, only 46% say they know they are on track. These investors list having immediate financial priorities, such as paying off debt and supporting children, not earning enough to save for retirement and “living for today” as the most significant barriers to their ability to start saving for retirement.

Barriers to start saving for retirement


Reasons why Latin Americans started saving

Longevity concerns are inspiring Latin Americans to take action

While most Latin Americans say they understand how much they need to save for retirement, and on average are saving 13% of their monthly income for retirement, they still have concerns about outliving their savings. Some of these concerns, including the realization that the state pension isn’t going to provide sufficient income, have encouraged Latin Americans to start saving and investing. Conversations with financial advisors have also helped Latin Americans to start planning.

Retirement income is expected from 3 main sources

For those saving for retirement today, over half (51%) of retirement income is expected to come from three sources: mandatory pension fund, cash savings, and private pension fund. In order to reach their goals, Latin Americans will have to maximize their investment outcomes by putting additional cash to work, as they’ve only saved a fraction of what they expect to have in retirement.*

Expected sources of retirement income
Chart: Reasons to start saving

Increased pay and incentives would trigger retirement contributions

We asked those who have started saving for retirement what are the triggers that would prompt them to increase their contributions. While the responses were varied, the top three answers were pay raises, greater certainty about their plan’s investment performance, and tax incentives.

Take action

While Latin Americans are balancing preparation for many financial priorities, they, and their financial advisors, need to take concrete actions to prepare themselves for their retirement. The best way to do so is in putting cash allocations to work in investments for retirement.

Takeaway 1

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BlackRock Retirement Institute assembles global leaders and policymakers around the topic of retirement.