60.5% of Latinos Believe Their Government-Funded Retirement Income Is Not Enough

Latin Americans are expected to have relevant gaps in their retirement income when they reach 60. 52% of them do not believe that their government-funded pension plan and their employer-managed pension benefits will not be enough to pay for their total basic living costs. 

The Findings of the Research

The study was performed by the Secure Retirement Institute and the Society of Actuaries (SOA).

An article from Advisor News stated that more or less 50% of Latin American consumers stand firm with the belief that it is their responsibility to plan for their retirement. They do not believe that the retirement benefit they will get from the government is enough. Also, they do not want to rely on their family members when their retirement comes. However, 55% of these people are not employing the services of a financial professional to assist them with their financial decisions for their household. 

Also, the researcher identified that only 20% of adults in Latin America had experienced an activity at least once involving their plans for their retirement income. 

Additionally, less than 30% of them have a formal written plan to handle their assets, income, and expenses for retirement.

According to Doctor Alison Salka, the director and senior vice president of the research program of LIMRA, previous SRI (formerly LIMRA SRI) research has revealed that formal retirement planning is an important indicator that one is ready for retirement. She said the research opened opportunities for firms offering financial services to reach out to these people through their employers. 

According to Doctor Salka, more than 7 out of 10 people stated that they prefer their employers to give them more comprehensive information and advice regarding saving money and planning for their retirement. She suggested that financial services businesses can collaborate with employers to offer financial management assistance to its employees.

Prioritizing Cost of Health Care 

The study revealed that 83% of Latin American consumers are problematic on being able to pay health care expense bot under a supplemental health plan when they retire. Also, they are equally scared of a chronic illness draining their savings.

 According to R. Dale Hall, the managing director of research, together with the problems about healthcare expenses, 8 out of 10 Latin Americans are problematic about the possibility that the government may reduce their retirement income coming from their pensions and healthcare benefits. More than ¾ of Latin American adults states that they will depend on the income coming from government-sponsored programs for their retirement.

The forecasted total Latin Americans age 61 and above are expected to double in number by 2050. This leads to a relevant risk of the feasibility of the pensions coming from the government. 

Lifetime Guaranteed Income Products

One solution to the risk of longevity is the lifetime guaranteed income products. Just like the LIMRA-SOA retirement research in Asia, a majority (62%) of Latin American adults had shared their interest in the purchase of financial products that guarantee an income for a lifetime such as an annuity.

Latin American young workers had expressed a great interest in having the option of receiving a guaranteed income with the potential of growth alongside the market.