Afore: 5 myths and realities of the Retirement Savings System

Given the importance of saving to retire with a better pension in the future life. The Retirement Savings System (SAR), unveiled some myths and realities that people may consider for their benefit.

Before moving on to the pros and cons on this topic, it will be necessary to remember that the Retirement Fund Managers (Afore) are responsible for safeguarding the resources of workers throughout their future lives, so that when they reach the retirement stage, they can transform them into a pension.

At least 10 administrators operate in Mexico. There are 8 private companies, one public and one more is a partnership between government and private. Each of them will establish the performance of each employee.

Five Myths and Realities of the Retirement Savings System

1.- MYTH: if I am self-employed I cannot save on my Afore.

REALITY.- Self-employed workers will be able to carry out their procedure at the administrator of their choice and the sooner the better. According to the National Commission of the Savings System for Retirement (Consar), starting this saving habit late could be an insurmountable obstacle to achieving an acceptable level at the time of old age.

2.- MYTH: the money that enters the Afore will not be returned to me.

REALITY.- The resources are the exclusive property of the worker and no one else, besides that they are kept in an account in their name and may be available to them once they meet the requirements established in the Social Security Act, in order to be able to enjoy a pension, or receive them in a single exhibition.

3.- MYTH: It is better for me to have my money in the bank.

REALITY.- Although banks are also an excellent savings alternative, the reality is that the SAR offers the possibility of making additional savings to the mandatory contributions to the voluntary savings sub-account, where deposits can be made without maximum or minimum amounts, according to your possibilities and without frequency established.

4.- MYTH: there is no security and ease to make voluntary savings and Afore do not give good returns

REALITY.- The investment of savings is made following all safety protocols.

In addition, Afores give higher returns than other instruments placed on the market even for very small amounts.

5.- MYTH: if I die I don't have the right to a pension. My beneficiaries don't receive the money from my Afore account.

REALITY.- The resources of the individual account may be withdrawn by the beneficiaries designated by the employee.

To do this, the interested party must locate their administrator and carry out the procedure through their electronic file or at any time when they decide to do the procedure.

In the event that there are no beneficiaries, the surrender shall be made in the order of priority provided for in article 501 of the Federal Labour Act.

Everyone should know the Administrator in which their resources are located, and they will also be able to change Afore at the time you decide to do so. The ideal is to appear at the Administrator's offices to clear up doubts.

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