President of the Forum of BBVA Institute of Pensions, Jose Antonio Hercehas warned that Social Security pensions for baby boomers (born between 1946 and 1964) “would not be enough” to make it to the end of the month and that they would have to sell their home if they didn’t save for old age. Will happen .
The person in charge of economic analysis at BBVA Research at a Deusto Business alumni meeting entitled “Pension and Long-Term Savings in the Current Context”, Rafael DomenechWith Jose Antonio Hers, I have coincided urgent action The changes aimed at guaranteeing the stability of the pension system and in which the changes have been made appear to be insufficient.
BBVA economists have advocated Facing a profound reform of pensions What do oriented countries like Sweden You Norway Thirty years ago, and he has lamented “the inadequacy of the Spaniards’ savings for old age”.
Hers has stated that in Spain the starting pension represents about 80% of the previous salary and in some cases it can be close to 100%, and that there are even “millions of pensioners who are required to pay 300 euros per month”. Requires supplement” to finish the month to be able.
“Soon There Will Be Many More Millions, Because” All The ‘Baby Boomers’ Who Haven’t Saved For Retirement They will need a pension supplement of 400 or 500 euros per month To make ends meet”, he warned.
«Social Security will be able to give them 80% of their regulatory base or their pension, but it’s going to give them an inadequate pension, it can’t do better, and that would be a good enough thing, at the cost of a huge deficit, It continues as before,” he said. As a solution, he has advocated raising “provisional savings by one and a half times of GDP”.
According to him, “It’s very easy to save negligible amounts A small capital of 60,000 or 70,000 euros on the eve of retirement, between principal and yield, every month for 30 years”, which would be “about 300 euros per month for life” as a supplement to the pension of the public system. .
still, So far these prospective pensioners have allocated savings for housing, Spanish households have 3.5 times the GDP in housing, that is, 4 billion euros.
As they haven’t saved, “‘Baby Boomers’ will have to liquidate their homes and their children say goodbye to inheriting those pension supplements,” warns Hers.
“And those kids will be able to rent for half the price (as there will be many on the market) of houses they won’t inherit,” he predicted.
On the other hand, he recognized that the fall in Exemption from pension plans “Used to be not acceptable» and relied that the bill “fixes it” in parliamentary processing because, otherwise, “what’s left of Spain for Supplemental Social Security is the collapse” or its death certificate.
Furthermore, he has recognized that “if the pensions are financed by the general state budget, they will be a very basic pension” and the debt of the system will shift, but not disappear, “and Brussels knows that, They’re not fools.”
According to Hers, updating pensions with the CPI requires that the initial pension be lower than the current pension so that it can be increased over the years. said.
The latter called for “neutral” taxation for all pension products and thus same tax treatment Employment pension plans, individual pension plans and public pensions financed by social security contributions.
The BBVA says those born between 1946 and 1964 must sell their home upon retirement if they haven’t saved