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South America is home to 12 sovereign nations, not counting dependent territories like South Georgia, the South Sandwich Islands and the Falkland Islands, or international territories like French Guiana.
According to the International Monetary Fund and Deloitte, some have strong economies and stable political environments. Others struggle with institutionalized corruption and economic dysfunction. Some rely on mineral deposits, forestry, oil and other natural resources. Others depend on trade, tourism or foreign alliances.
The retirement landscape varies just as dramatically from one place to the next.
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In some countries, employer-based plans do most of the heavy lifting. In others, seniors rely on public pension programs similar to Social Security that provide a minimum income for most retirees. In others, millions of seniors are struggling in poverty.
There is little reliable data on the average retirement savings among the nearly 89 million people age 60 an older who call South America home, but their prospects vary substantially from one country to the next.
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Argentina
According to the global actuarial and consultancy organization Globacs, Argentinian retirees are guaranteed a minimum income through a pay-as-you-go pension system that replaced a defined contribution system in 2009.
According to the most recent data, beneficiaries receive a base rate of roughly the equivalent of $10 per month plus 1.5% for each year of work, with a maximum monthly pension of approximately $133.
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Bolivia
According to an academic study published by the National Institutes of Health, Bolivians are eligible to receive benefits from a national noncontributory pension plan when they turn 60, regardless of income. According to the most recent data, the program provides roughly the equivalent of $50 per month to beneficiaries who don’t have private retirement plans — about 85% of recipients — or $43 for those who do.
Brazil
According to the Brazilian Report, Brazil’s government recently raised the maximum monthly payment of its pension system to the equivalent of $1,295 to compensate for high inflation. For context, that’s the equivalent of nearly six times the country’s minimum wage.
Chile
According to the Council on Foreign Relations, Chile eliminated its public pay-as-you-go pension system — which functioned like Social Security in the U.S. — in favor of a privatized model. The results have left much of the country’s aging population in dire straits. Most retirees live on less than the country’s minimum wage, which recently rose to $547 per month.
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Colombia
Columbia recently passed pension reform legislation that gives about $57 per month to retirees who have not completed a minimum of 1,300 work weeks. The maximum pension is 25 times the monthly minimum wage, which is the equivalent of $340 per month.
Ecuador
According to the most recent data from the Social Security Administration, Ecuador’s social insurance system pays between $197 and $2,167 to its old-age pension beneficiaries. Seniors receive 43.75% of their pre-retirement income with five years of contributions plus 1.25% for each additional year up to 35 years. Then, it increases to 83.25% of pre-retirement salary for 36 years and up to 100% for 40 years. Every year of contributions beyond 40 years earns another 1.25%. Recipients get 12 monthly payments plus two bonus payments per year.
Guyana
According to the Guyana Chronicle, Guyana increased its old-age pension payment from $134 per month to $158 in 2024. In 2025, the country plans to increase the benefit to $196.35.
Paraguay
According to Germany Trade & Invest’s Inter-American Development Bank, Paraguay’s “retirement and pensions system is one of the most generous in the region, with average replacement rates of 98%, exceeding the regional average of 64.7%. The benefits under the noncontributory pension system are also among the highest in the region.”
Peru
According to the most recent data from the International Organisation of Pension Supervisors, the first part of Peru’s two-part pension system pays at least $150 per month to low-income seniors.
The organization writes, “The government also provides the same amount of benefits for all members of the private pension system who, at retirement, have not accumulated enough funds in their personal accounts to finance a pension of an amount equal to or greater than the minimum pension.”
Suriname
According to the International Social Security Association, Suriname approved several changes to it social safety net programs in 2023, including raising its flat-rate old-age pension payments to the equivalent of $46 per month. That’s a 233% increase from 2022, when it was $26.
Uruguay
According to global financial services firm WTW, Uruguay recently revamped its senior pension program to provide 1.5% of a beneficiary’s previous salary multiplied by pensionable pay and their years of insured employment. Early retirement at age 60 reduces that rate to a minimum of 1.20%. It rises to 1.96% for late retirement at age 70 up to a maximum benefit of 85% of covered earnings.
Venezuela
In 2022, Venezuela boosted its monthly pension from the equivalent of $2 a month to $30. Despite the dramatic increase, the AP says that’s still only one-twelfth what the average family would need to purchase basic necessities in the country, which has been ravaged by more than a decade of economic dysfunction.
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This article originally appeared on GOBankingRates.com: Here’s How Much the Average Retiree in South America Has in Savings
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Publish date : 2024-09-30 01:00:00
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