"Planning for Retirement: The Personal Responsibility You Can't Ignore"

Retirement planning is a crucial aspect of any worker's financial life. However, many people still blindly rely on Afores (Retirement Fund Administrators) as their only strategy to ensure a comfortable future. Paulina Casso, author of the book "WTF with Retirement," warns that this dependence can be a serious mistake. “Retirement is something individual and personal. You are responsible for the quality of retirement you will have,” emphasizes Casso, suggesting that the responsibility does not fall on the government, employers, or even children. Afores have been seen as a significant step toward saving for the future, but Casso clarifies that they are not a salvation. For example, those governed by the 1997 Law who did not make voluntary contributions to their retirement fund will only receive a pension equivalent to 30% of their last salary. Although the 2020 reform aims to gradually increase employer contributions to 15% by 2030, this will barely raise the pension to 70% of the final salary. These figures raise concerns about the viability of living comfortably on the pensions derived from Afores. It is crucial for workers to prepare and supplement their savings. Casso recommends exploring personal retirement plans (PRPs) or investing in financial instruments that offer attractive returns. "Saving under the mattress or in the bank are not viable options," she pointed out, noting that it is essential to act today to ensure a better tomorrow. The author highlights that the best time to start saving is now, as “age makes all the difference.” Investing in the future should be a priority, and the sooner one starts, the easier it will be to achieve desired goals. Investing in the right tools is crucial to ensuring a comfortable retirement. Casso advises using calculators from the Retirement Savings System (SAR) or the Afores themselves to get a clear idea of how much money needs to be saved to achieve the desired quality of life in the future. However, simply saving is not enough; it is essential that those savings are invested in instruments that generate returns that outpace inflation. One of the main barriers facing the population is the mentality surrounding retirement savings. Many fall into the trap of thinking that retirement is far off, which leads them to take no immediate action. Casso emphasizes that living with the goal of saving does not mean sacrificing all present pleasures. “It’s about finding a balance,” she says. The key is to enjoy the present while also allocating a portion of income to investment and savings. The use of technology has made the savings process easier. Nowadays, it is possible to set up automatic contributions to an Afore or a personal retirement plan. Apps like AforeMóvil and Millas para el Retiro are designed to help users manage their savings more effectively. However, it all starts with a clear budget that allows understanding monthly income and expenses. Casso recommends that at least 30% of income be allocated to savings. For those who feel they cannot save, Casso suggests evaluating their expenses. Often, small expenses like daily coffee or outings to the movies can become significant savings opportunities. The challenge is to recognize these "ant expenses" and redirect that money toward retirement savings. Those interested in improving their savings strategy should ensure that the financial institutions they choose are properly registered and regulated. In Mexico, there are 45 authorized institutions that can offer secure retirement plans. It is essential to research returns, fees, and any penalties associated with early withdrawals before signing any contract. “You need to have clarity about what you are signing and what it implies in terms of costs and benefits,” Casso emphasizes. Retirement planning is a personal responsibility that should not be left to chance. With the right information and informed decisions, any worker can take proactive steps to ensure a stable and successful financial future. The key is to act today, educate oneself, and prioritize saving as part of a long-term financial strategy. Financial health in old age will largely depend on the decisions made in the present.