Retirement: how to protect your future?

Planning now, for tomorrow. Right away, without waiting. "Buy returns, not prices thinking about speculative investments," explains Stefano Negri, Head of quantitative management Unit Linked at Banca Generali, clarifying what is at stake. Today's young people will retire at nearly 74 if no action is taken, Eures' latest analysis records. Projections of the value of one's pension for today's employees who are under 35 make one shudder: if tenure continued until 2057, thus resulting in retirement at almost 74 (73.6), the amount of the pension check would amount to only 1,577 euros gross per month (i.e., 1,099 net of Irpef), a value just above subsistence in large Italian cities where renting a two-room apartment costs more. The Inps simulator makes even worse valuations: a 25-year-old working for 12 months will only be able to retire early at age 70 and at old age six months later. Even worse if the years of contributions are less than 20 but more than five: in this case the wait for old-age retirement will extend to 74 years and 10 months.

Alberto Brambilla, president of "Itinerari Previdenziali," one of the country's top welfare experts, photographs an alarming situation as of now: "Italy has 36.5 million people of working age, but the employed are 23 million 656 thousand, the highest figure since 1977. A record," Brambilla says, "too bad that in comparison with European countries we remain in last place. At the end of 2022, there were 16 million 90 thousand retirees, an increase of about 90 thousand compared to 2018, the year with fewer retirees than ever thanks to reforms, but which increased due to measures like quota 100 and Ape sociale.

The fundamental ratio for the maintenance of the social security accounts, assets/retirees is 1.46: in view of the larger phase of population aging that awaits us in the next few years we should raise it to at least 1.5-1.6. We should recover, immediately, in the labor market about 3-4 million people. On the other hand, the labor market participation rate in Italy is just over 61 percent, but the European average is about 70 percent. Denmark, Germany, the Netherlands are even higher: between 77 and 78 percent, all of which is unsustainable. Even now, let's imagine in the future with the few children we have, therefore fewer workers, fewer consumers, less GDP and development."

That is why it is necessary to set aside, to set aside a nest egg to support oneself when one retires, also in view of the fact that end-of-life expenses are increasing and public welfare is incapable of supporting them. "You have to allocate from the beginning, and as you go along, a part of your income. As soon as you start working. This way we are just transferring our income to the future. Diversifying the risk, minimizing the entry impact of this choice in the stock and bond markets. It doesn't matter whether you decide to do it through an investment in a pension fund or through a regular accumulation plan. What matters is doing it," Negri explains. At that point, the timing of entry will not matter too much, because it is the long-term horizon that will reward this type of savings allocation. "The current geopolitical scenario on the other hand conveys a strong sense of uncertainty. It is therefore necessary to differentiate investment, fractioning thematic and geographic risk, favoring funds that bet on established trends such as the ecological transition and green technologies," Negri clarifies. "Balancing exposure between equities and bonds, favoring the former, which are riskier, at the beginning of an accumulation plan and then hand reducing them as time goes by.

For this reason, Accumulation Plans (CAPs) are also excellent forms of savings that allow economic resources to be put to good use even in the absence of large initial capital. The installments paid in accumulate among themselves gradually over time, regularly and continuously increasing the amount of savings. A small periodic sum is sufficient to subscribe to mutual funds that will operate choices in the financial markets, ensuring a final annuity. The duration of an accumulation plan is flexible. The best returns are usually obtained over medium to long periods. The cadence of the installments is also not binding: basic, monthly frequency, but it is possible to customize it by paying even a single annual installment, perhaps at the thirteenth.   At the end of the Pac term, you get the accumulated principal added by the capital appreciation, to be collected through coupons or interest.