Fund Your Retirement On Leofinance Now As The Current Pension System Is Failing
No matter how young you are and how far retirement is for you, it's never too early to start to lay the groundwork for your future. Leofinance is giving you all you need to lay a foundation for your retirement.
Retirement programs, just as economies around the world are going to be in great difficulty very soon. Some are in trouble already and elders find themselves penniless after working their entire life, struggling to buy medication and pay bills. Unfortunately as time passes, the situation is getting worse and worse, no sign of improvement.
Why The Current System Is Failing
The national pension system is causing increasing challenges at the level of Governments, as in most countries a “pay-as-you-go” system is implemented. The payments performed by the active generation cover the pensions of the aged population and further, their own pensions would be covered by the future generations.
At the moment, in Romania, the mandatory pension insurance contribution represents an uncapped 25% of the gross income obtained. source
The payments performed by the active generation cover the pensions of the aged population - This tells everything.
Active generation means those who are employed at the moment, to spell it out for everyone.
With the 2 months lockdown that took place last year from mid March to mid May, a lot of businesses had to close their doors and send employees in furlough. Furlough is payed by the budget, so employees were covered to some extent, but there were no contributions to the pension fund, or that was much less. As a consequence of the lockdown and later restrictions regarding traveling, events and gatherings many businesses had to close down forever, or even went bankrupt.
Event organizers, travel agencies, transport companies, airlines, restaurants are out of business, which means less contribution to the budget. Jobs are scarce, there's less chance for these people to find a job and many are going to migrate towards countries that have a better offer.
Unemployment rate is getting higher and even thought the vaccination has started, there's no chance the situation can change anytime soon.
This is how the unemployment rate looks like for 2020 in Romania. I'm not sure how accurate the data based on which this chart has been made, but it looks bad. Restrictions are still in place, travel is minimal or non existent. Organizing events are strictly forbidden.
Global unemployment rate doesn't look good either. It started rising in 2019, 2020 shows a 2% increase and wait for 2021 to see the jump.
Pensions are indexed with the inflation rate they say, but that's never enough and besides, pretty soon there will be no funds to index pensions with. Healthcare is covered but you still need to spend a lot if you want the best care, plus medication is not free and if you have a serious condition, you go broke pretty quickly.
There are private funds where you can contribute and (hopefully) get your pension when you retire, but I would not trust any as no one can guarantee my money is safe with them.
The only thing I can do is take matters in my own hands and start building my pension plan. I wish I was wrong but the state won't be able to do that, so I need to do it.
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Posted Using LeoFinance Beta
