Introduction
One of the major concerns affecting the future well-being of Mexico’s adult population is the lack of sustainable income schemes for old age, particularly those independent of government support, family assistance, or continued employment. According to the 2023 National Health Financial Survey (ENSAF), 40.6% of adults (aged 18 and above) do not have an independent income scheme for old age, relying instead on working, government support, or family contributions.
Exploring Income Sources for Retirement
The remaining 59.4% of adults anticipate financing their retirement through personal mechanisms, such as pensions, Afores (private pension plans), private retirement plans, and income from rental or sale of assets like vehicles, real estate, livestock, or other financial investments. Key findings include:
- 47.4% of adults expect income from pensions, retirement plans, or Afores;
- 24.8% plan to generate income through selling or renting assets (vehicles, houses, livestock, etc.); and
- 11.2% expect income from investments in banks or financial institutions.
However, the challenge intensifies when considering that 54.8% of Mexico’s employed population works in informal sectors (National Employment and Occupation Survey, June 2025), limiting their access to Afores and compelling them to explore alternative retirement income sources.
Ensuring Sufficient and Stable Retirement Income
Besides having a retirement income scheme, its sufficiency and stability are crucial. As people age, expenses often rise, especially in healthcare. The ENIGH 2024 reports that households composed solely of individuals aged 65 or older reported an income 30.7% lower than the national average, highlighting a significant income gap that could reflect compromised living standards for this demographic.
Key Takeaways
- Financial well-being is achieved by having independent retirement income sources, not relying on the government, family, or continued employment.
- While Afores and retirement plans are important, they do not guarantee maintaining pre-retirement living standards. Diversifying income sources is essential for a more robust and resilient retirement strategy.
- Underutilized income sources for retirement, such as financial instruments, real estate, or alternative wealth-generating schemes, are often overlooked due to lack of knowledge, distrust, or insufficient financial education.
Available Financial Instruments for Retirement Planning
Today, those planning their retirement have access to various long-term financial instruments beyond voluntary contributions to Afores, including:
- Personal Retirement Plans (PPR): These plans offer tax deductions and flexible contributions.
- CETES: These are government-issued instruments allowing investment from low amounts with returns exceeding traditional savings rates.
- For those seeking diversification: Mutual funds managed by experts or ETFs (Exchange-Traded Funds) replicating indices or sectors can be purchased like stocks in the stock market. Alternatively, direct investment in equities offers higher potential returns but comes with increased risk, necessitating proper advising and research.
In conclusion, retirement planning should not be left to chance; it requires foresight and early initiation. The more proactive one is, the greater the chances of securing a dignified, stress-free, and independent old age.
Key Questions and Answers
- What are the primary concerns regarding retirement income in Mexico? The main concern is the lack of sustainable, independent retirement income schemes not reliant on government support, family assistance, or continued employment.
- What percentage of Mexican adults lack an independent retirement income scheme? According to the 2023 National Health Financial Survey, 40.6% of adults do not have an independent retirement income scheme.
- What are some alternative retirement income sources? These include Personal Retirement Plans (PPR), CETES, mutual funds, ETFs, and direct equity investments.
- Why is it essential to diversify retirement income sources? Diversification helps ensure sufficient and stable retirement income, accounting for increased expenses in areas like healthcare as people age.
