“Riding Retirement Is Not Just for the Rich”: A Guide to Starting Your Reservation

Is planning retirement a rich thing? Is it for those who have a salary left over at the end of the month? How many times have you thought about it and let go of your plans to invest for the future?

The problem is that the future is still there, waiting for you. And unless you win the lottery, if you don’t act now, the account won’t close. It’s a matter of math.

“One day you will have no more income. He will no longer have the strength to work and will still have expenses,” says Wiany Moreira, director of strategy at the investment office Prosperidade.

In recent decades, life expectancy has increased significantly around the world. In the 1960s, the prediction was to live to be 52.5 years old. Today, it is 72, the world average. The problem is, even though we live longer, we only think about the here and now.

But where to get money to invest?

By now, you may already be considering that it might actually be worth your while to start planning your retirement. But maybe you have no idea where to get money, especially if every month it’s missing.

The question, again, is math: either you increase your income – which is difficult – or you start spending less.

Spending less is not living with a worse quality of life. It’s making rational choices. For example: your car.

It needs to be a good, comfortable and efficient car. But it doesn’t have to be luxury. A cheaper car means much less spending on taxes, maintenance, insurance.

And that goes for everything. Mainly to the two biggest money drains that middle-class incomes traditionally escape from: food and drink.

Ordering “delivery” or eating in restaurants every day is convenient. But you will, at the very least, spend twice as much as you would if you cooked at home. The same goes for drinks.

With these small savings, you’ll be able to save – even if it’s $100 – every month.

But is it useful for retirement planning? Yes, says Andressa Siqueira, from Magnetis Investimentos. “It all depends on how you want to live after you retire. But for a start, any value works”, says the investment specialist.

The important thing is to be constant. Make deposits every month. But in which investment?

For those who want convenience: private pension plans

“In the past, I only had the savings account, and it was simple to deposit every month. Today, there are more than 1,400 different investment funds. It’s natural for a person to get lost and not know what to do with their money,” says Wiany.

So, if you are not one of those people who want to dive into the investment world, there is a simple solution: private pension plans.

Basically, you’re going to make savings and you’re going to pay the bank to invest that money. And part of this income, of course, will stay with the institution – as payment for the convenience. This, however, does not preclude the choice.

There are two types of pensions. The most basic and simplest for those starting out are private pension plans VGBL, indicated for those who do not pay or refund income tax. The other modality, the PGBLs are more suitable for those who want a discount when paying the annual Personal Income Tax.

It is worth it?

Private pensions were taboo for a long time. That’s because, until 2015, the way this product was marketed, in addition to being unattractive, generated a lot of prejudice. Banks charged abusive administration and charging fees (when you get the benefit).

But as of 2015, independent fund managers created their own funds, with higher returns and lower costs, and many competitors stopped charging fees. Some changes in legislation also made these funds more attractive.

So, VGBL plans can pay similarly to fixed income investments. “Or even variable income. Today there are funds with this option”, says Andressa, from Magnetis.

And the government, according to her, encourages adherence to these plans, with much lower income tax discounts when enjoying the benefits. “In VGBL, the discount is 10% of earnings and can reach zero, depending on the income you choose to receive upon redemption.”

The funds work like a traditional savings account, but in a much more modern way. The cardholder can schedule an automatic deposit every month. And a CPF is enough to open a pension account. “There are many parents who open a pension for their children when they are still babies”, says the expert.

But of course, according to Andressa, there are other options. “The private pension is the simplest and most convenient solution. But the person can also make an investment portfolio: fixed income, stocks. The important thing is to diversify.”

Three investments to save for the future

“Investing alone is possible and it is not necessary to understand the market or the ‘day trade’”, says Wiany. The secret, according to her, is to bet on three different types of investments: one that protect against inflation, one dollarized and one variable income.

The first option is the IPCA-linked funds (Broad National Consumer Price Index) – that is, they yield at least the same as the country’s official inflation.

There is the IPCA Treasury, a public bond issued by the government. By investing in this asset, you will be lending money to the government. In return, he pays an interest rate that is a combination of inflation (IPCA) and a fixed rate.

It also has the same modality, but private, the CDB’s (Bank Deposit Certificates), which also pay the variation of inflation, plus some income.

Have a portion of your savings vary depending on the dollar it is also recommended, according to Wiany, as the US currency offers good long-term protection.

No need to buy cash. Again, banks have investment funds that track this variation.

Actions – Oh, what a fear!

The third option is stocks. They are recommended because they can yield a lot. There are shares, for example, that from March of last year until now have risen more than 100% (Locaweb, XP Investimentos, Magazine Luiza and Via Varejo, for example).

Of course, stocks also fall. But you won’t lose all your hard-earned money, unless you bet on a single company that goes bankrupt – which is difficult to happen.

Here, too, it is not necessary to keep choosing a company, reading balance sheets to know which role to invest in. There are funds that track the yield of certain stocks, as well as those that track the IPCA and the dollar.

And how much do I invest in each thing?

This is a question that depends more on you. That’s why investment advisers like to classify their clients as conservative, medium, and bold.

The more conservative bet more on what is safe: the funds that accompany inflation. At the other end, the boldest put more money into stocks and the dollar.

And real estate?

They are a very traditional option in Brazil. Who never thought of living on rent in old age? It looks simple and easy. But if you are a friend of this idea, Andressa, from Magnetis, remember that not everything is wonderful.

“What if the property becomes vacant? Then the person is without income and with expenses for taxes and condominium. And there are also maintenance expenses, renovations. If you have to sell, it takes a long time because it is an investment with little liquidity.”