The Wallet: Why pensions are insufficient and what alternatives exist to increase retirement income?

TL;DR

Colombia has two competing pension regimes: the public RPM (Colpensiones) and the private RAI (AFPs).
RPM pensions are calculated based on credited weeks and average salary over the last 10 years.
RAI pensions depend on contributions, investment returns, and time funds are held.
A proposed pension reform would create a pillar system, with initial contributions going to the public system and excess to private funds, ending the competition between regimes.
Regardless of the regime or reform, pensions are expected to be significantly lower than pre-retirement salaries.
Factors like informality, periods without contributions, and market performance affect pension amounts.
Strategies to increase retirement income include voluntary savings, investing in income-generating assets, having rental properties, extending working life, and reducing future expenses.
The focus should be on building additional income for old age, not just choosing a pension regime.

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