2024-04-10 21:18:29
- There are options where we can receive the average pension of BGN 883 regardless of the state for at least 25 years. But they are related to our personal investment
- Generations X, Z and millennials are the biggest marketers for now because of the broken system
Could Gen Xers, Millennials and Zers be able to escape the retirement wolf trap? The answer is yes, but there are two conditions and they must be strictly followed.
At first glance, there is no way out of it, because those born after 1965 will not only pay the bill for all pensioners until now, but also they are the Markotets who drew the short sticks, and in the best case they will receive pensions between 3 and 7 years.
Currently, women can retire at 62 years and 2 months if they have 36 and a half years of service, and men – at 64 years and 7 months and 39 and a half years of service. But it won’t stay that way. By 2030, for women, the age will increase to 63 years and 3 months, and the necessary experience will be 37 years, and for men it will be 65 years and the time served – 40 years. Many will say – and what of this?
Isn’t this the trend all over Europe and terrible protests periodically break out on this occasion? However, there is one decisive feature in Bulgaria. We are among the very few countries in the world where life expectancy is decreasing instead of increasing. If in the period 2018 – 2020 it was 73.6 years, in the next – between 2020 and 2022, it is already 71.9 years. The reason is that, according to NSI data, men live an average of 68.3 years, and women – 75.8 years, and by 2020, the life expectancy for women was 77.4 years, and for the stronger sex 70.1 years.
The conclusion is merciless. In our country, the retirement age is constantly increasing, and life expectancy is decreasing.
Therefore, the average Bulgarian woman can receive a pension from the current retirement age of 62 – 63 until she is 75 – 76, and for men – from the current 65, when they will retire, only until the age of 68.
For these 12 – 13 years in question for the ladies and not even 3 years for the men, we pay solid bills, which everyone can check for themselves in the NOI tables for the respective years and incomes. No matter how we think about it, no matter how well we try to act in good faith, we have to admit that the system is robbing us brutally.
These days in “24 Chasa” in the article “Money for pensions runs out 2 days before the election” it was described in detail how after 2000 all governments systematically accumulated deficits in the pension system and practically broke it.
And since someone has to pay the bill in the end, it will be the current and future pensioners – the biggest marketers. That is exactly why they urgently need to find an innovative and non-standard way out of the trap set for them with programmed misery from now on.
Everyone who has studied economics or finance knows about the rule that eggs (assets) are placed in different baskets (spheres) – if something happens to one, the other survives. However, here we will launch a new idea. The undeniable advantage is that over the past 24 years it has proven that it not only preserves the value of money, but also increases it.
The principle is simple – there is a property that is apparently undervalued – there are such properties not only around Sofia, but in almost all cities. It is necessary to choose without haste, sometimes the search can last a year or more. The most important thing is that when it is found and clearly below its value, we activate – first with solid checks that there are no pitfalls, that this is not a disputed property, that there are no missing documents, etc. If everything is in order, it goes to a bank for a loan, with the financial institution doing its own independent verification of the property’s documents. One can be sure that the property is undervalued and take it into account when the bank values it at a significantly higher value than the market value.
Here is a real example. A few months ago, about 15 km from Sofia, a two-story house with 240 square meters of built-up area with a small yard was sold for 70,000 euros. The deplorable condition was visible to the naked eye, but the property was about 20 meters from a busy main street.
If the hypothetical future pensioner has done all the checks up to this point, he has two options. Either he buys it with a loan at an interest rate of just over 2%, which will mean monthly installments of about BGN 690 – 700. Or he applies for a loan of 15,000 euros more, so that he can “refresh” the property with repairs.
This is exactly what happened with the house in question near Sofia. In a few months, it got a new roof and insulation, after which it appeared on real estate sites at a price of 240,000 euros. It stayed there for several months and today it has new owners.
The example is telling, because since 2000, real estate has always kept the value of money and its prices have been inexorably going up. The reason is one – Bulgaria is part of the European Union and real estate values have not yet reached those in Eastern European countries such as Hungary, the Czech Republic and Poland. For example, in Budapest the square meter is 3,872 euros, in Prague it is 7,379 euros, and in Warsaw it is 5,992 euros. But the trend is for them to continue to grow, as they also catch up with prices in the older members of the European Union.
For example, in Paris the square meter is 12,897 euros, in Munich it is 11,326 euros, in Milan 9,817 euros, in Vienna it is 9,094 euros, in Berlin it is 8,953 euros, in Copenhagen – 8,094 euros, in Rome – 7,654 euros, etc. In other words, the trend is clear and our properties, whether we like it or not, are following it, albeit slowly.
From this point of view, whether one chooses to snap up a neglected property to sell in a year or two, or wait a few for the price to appreciate appreciably, is a matter of preference, judgment and style. The reason is that a renovated property can not only double its value, but even surpass it, and everyone can estimate for themselves what income they will have if they sell it with a profit of 140 – 155 thousand euros, which was the above example, taken from real life.
Given that the minimum pension from July will be BGN 580, the average – BGN 883, and the maximum – BGN 3,400, the bill will look like this.
We multiply EUR 140,000 by BGN 1.95 and get BGN 273,000. If we divide it by BGN 580, which is the minimum pension, we will secure this income for 39 years. But we can divide the amount in question by the average pension of BGN 883 – then we will have our own independent “pillar” for 25 years. But we can also divide these 273,000 by the maximum of BGN 3,400, and we will be able to receive it for 6.7 years.
Of course, this is neither a recommendation nor a financial advice, but only a real example of a real solution to the problem of life, that everyone should take their fate into their own hands and look for their own way out, and not rely on a pension.
It will be unfair not only because of the infinitely short receipt compared to contributions made almost throughout life, but also because the average of BGN 883 is a guaranteed and unavoidable misery.
The other approach is to live as healthy as possible so that we can enjoy our work well into old age.