In our country there are people who are in the AFP and others in the ONP. Those of us who are 35 years old must think that we still have 30 years to continue contributing. I have consulted various pages of each of the AFPs projecting future pensions and doing many simulations with different alternatives and my conclusion is as follows:
Analyzing the national pension system - (ONP):
In this system, your pension has limits that range between S / 400.00 and S / 900.00 per month - therefore, if you are about 45 years old and will only contribute approximately 25 years and do not earn more than S / 1000.00, my recommendation is to join this system. Don't think twice.
Analyzing the private pension system - (AFP):
Note: The projections that I detail below are under the hypothesis of 5% annual return.
- Case 1: He contributes 40 years earning the minimum salary (S / 750.00), with a return of 5% per year, he will earn approximately S / 620.00 monthly. Case 2: He contributes 20 years earning the minimum salary (750.00), with a return of 5 Annual%, he will earn approximately S / 182.00 monthly. Case 3: He contributes 40 years earning approximately S / 2500.00, with a return of 5%, he will earn approximately S / 1450.00 Case 4: He contributes 20 years earning S / 2500.00, with a return of 5 %, you will earn approximately S / 410.00 monthly.
In short, to have a pension of approximately between S / 1000.00 and S / 1200.00 you will need to accumulate a fund of approximately S / 230,000.00 - So check your AFP account statement and start doing your projections and simulations.
Therefore, my conclusions and recommendations are as follows:
- If you are in the ONP, well there is not much to do… just wait for the day you can retire (woman: 60 years old - man: 65 years old) If you are in any AFP, I can recommend that you change background and thus be able to earn a higher return on your fund (but that will depend on the number of years you have left to contribute - that is: if you are between 25-40 years old choose fund 3, if you are in the range of 41 - 50 years old, choose fund 2, and if you are over 50 years old, choose the fund 1). If you have little accumulated fund, then you should start thinking about having a higher paid job and in this way increase your fund.
Anyway… I hope this article serves as a reflection and helps you have a better picture of your future and that of your family.
Published in Diario Correo on 02/08/2014.
