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From 2024 onwards, the adjustment of retirees ' salaries will follow the updating criteria using the National Consumer Price Index (INPC) , which is the official inflation, plus the positive variation in the Gross Domestic Product (GDP) of the previous two years. With this measure, the federal government hopes to guarantee a better quality of life for Brazilians, as in recent years, the adjustment was only aimed at maintaining purchasing power.
However, these measures raise concerns for younger generations, given that the INSS basically allocates tax receipts from the young and economically active population to pay retired workers . If we consider that the Brazilian population is aging and we add the pension gap , which was more than R$261 billion, the question that younger generations must ask is:
When it is my turn to receive my pension, will it be enough to protect my old age?
In addition to the problems mentioned briefly, we still have the problem of inflation corrosion.
Inflation really is another form of longevity risk . If your portfolio, upon entering retirement, is designed to meet your spending needs for 30 years, an inflation shock could mean it will only be able to do this for 20 years, creating financial insecurity, especially in the most crucial years in terms of health.
The risk you will face from inflation depends on your circumstances. For example, if you haven't been able to purchase your own home over the years and rely on rent, new rent adjustments could take away a large part of your retirement. Property owners may be dealing with rising property taxes and maintenance costs, but renters are much more exposed to inflation.
What can younger generations do to secure retirement?
Unless you are about to start a new venture that promises to build a reserve for the future , if you are someone less active in the world of entrepreneurship, the solution is this: planning, discipline and not waiting for INSS.
Portfolio strategies are available to help mitigate the risk of inflation and possible government failure to maintain INSS payments for future generations. Saving steadily, month after month, and building an investment portfolio that includes furniture and assets immune to inflation can be an alternative for future generations. My advice is that clients maintain a balanced portfolio, with 50% in financial markets and 50% in real estate and other physical assets. Of course, this still depends on the client's risk tolerance and ability to save over the years.
If you need a CNPI analyst to give you this first guidance, you can contact me, as I can help you and avoid wasting time and money . I compare my work to the work of a doctor; You can even take medication on your own, but why take the risk?