While enjoying your summer holidays, it’s natural to contemplate the comfort you’ll experience in retirement and to envision all the things you wish to do (or cease doing) once you transfer your business or reach the age where daily work is no longer necessary. What we often neglect when dreaming is to verify whether our finances can actually support these aspirations.
By 2050, Spain will be the world’s oldest country after Japan, according to the OECD. In fact, by 2020, the proportion of the population over 65 will already equal that of children under five, and by 2050, it will be triple. The same report also states that Spaniards are living longer and retiring earlier. This excellent news, however, raises a significant question: Will there be enough money in public coffers to ensure that when we retire, we will have sufficient funds to enjoy a long period that, generally, we face with better health and more leisure opportunities than our parents?
The reality is that growing older does not always mean becoming wiser, at least when it comes to managing our finances. Most of us have not considered how much money we will need to live as we wish from the moment we retire, even though, according to the latest statistics, we are talking about at least 20 years of life. We do not know how much public pension we are entitled to when we retire, nor do we understand the existing savings vehicles and their differences, or the effect of inflation… and all this information is crucial for making decisions now while we are still working.
The latest evaluation survey conducted by the Bank of Spain and the CNMV in 2017 indicates that barely half of Spaniards over 55 have a savings product, and that education level has a direct impact on this decision: 32% of individuals with university studies acquire savings products compared to 8% of those with primary education.
The financial sector is perfectly aware of this deficiency and the importance of citizens having knowledge about how to manage their personal finances. Greater education in this area allows you to think critically, evaluate evidence, discern false from true, real from unreal, and facts from fiction. Furthermore, it prompts you to take timely action, which is key to growing our savings.
At the Spanish Banking Association, we want older people to have a place in our financial education projects. Therefore, on October 1st, within the framework of Financial Education Day organized by the Bank of Spain and the CNMV, we will launch “Yes, tell me”. In a series of very short videos, volunteer professors Jaime and Julio will address and resolve common financial concerns for those of us who are not millennials, such as the differences between a deposit and an investment fund, or what products are available for retirement planning. The idea is for these videos to circulate via WhatsApp, one of the few applications widely used by older adults.
Older people play a fundamental role in our circles, thanks to accumulated knowledge, talent, and experience, the ability to mobilize people and resources, and as essential family support. We are key agents in our society and a demographic group with increasing weight. It is in our hands to ensure that all of us—the so-called “baby boomers” and our children—can afford the retirement we all dream of.
Beatriz Morilla Piñeiro, Head of CSR at the Spanish Banking Association
