Second AFP withdrawal

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Second AFP withdrawal

Post by admin » Sat Dec 05, 2020 8:11 am

so congress has aproved a second withdrawal from the AFP pension system.

seen the AFP association said they would be ready monday for people to apply, but seems to be some debate about when exactly they will pay out.

seems the only change really from the first is that anyone making more than about 1,5 million a month will be taxed on the withdrawal.

But, I think it is absolutely a horrendously bad idea that will leave the country in a much weeker position in the coming decades; especially among the lower end of the economic spectrum. for most chileans, that is all they got in the pipe for retirement.

Now, on a personal level, yippy!!!!

I took my last AFP check and reinvested it in to my real retirment fund. Think I am up about 80% so far, ironically mostly trading copper stocks. The AFP sure was not giving me those sorts of returns.

still waiting for more gory details on exactly how that is suppose to work.
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41southchile
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Re: Second AFP withdrawal

Post by 41southchile » Sat Dec 05, 2020 11:26 am

admin wrote:
Sat Dec 05, 2020 8:11 am


But, I think it is absolutely a horrendously bad idea that will leave the country in a much weeker position in the coming decades; especially among the lower end of the economic spectrum. for most chileans, that is all they got in the pipe for retirement.

Its a very very small minority of Chileans that think about consequences of anything, let alone the long term. The country is a perfect case study for the theory of unintended consequences from rushed and Ill thought through public policy.
Its actually a very sad reflection on the ignorance of people in general that think these withdrawals are somehow in place for helping out the poor.

As for copper yeah it was on fire throughout November I looked at a graph the other day, up 15 percent for the month.

I heard dates for the 2nd 10 percent to be in peoples accounts before christmas 🎄, and there is also a worry about having enough physical bills in circulation, better print some more 😜
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Re: Second AFP withdrawal

Post by admin » Sat Dec 05, 2020 1:13 pm

I would not have touched a physical bill at all this last year, if the stupid toll roads did not require cash down south. my 20 pound box of spare change though is a few pounds lighter. metal coins in a pandemic are a bit more sanitary. I just try to avoid getting change back. I would not be surprised if it turns out one of the major spreaders durring this pandemic was the stupid toll roads.
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Re: Second AFP withdrawal

Post by admin » Sat Dec 05, 2020 1:31 pm

I kind of screwed up my copper mining stock investment thesis for 2020.

I loaded up on copper stocks at the very bottom, before this all started back in 2019. Kept adding every chance I got. They took off for a while, up about 40% or 50%, then they stalled when copper was around $3.

I got stupid and so started trading the volitility when they were stuck in a range. They would go up say 5 percent, then retreat. I would add a few shares with each round. Worked great for a few weeks. Think I added 20% my portfolio with that rinse and repeat.

well, one day they went up, I sold, and they just kept on going up and never looked back.

oh well. There is an old stockbroker saying, "no one ever got fired for selling at a profit".

went and bought oil and gas pipeline stocks that were at a historical low about that time. Now they are on fire. Just hope I get my AFP money before they run away from me too.
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Re: Second AFP withdrawal

Post by bow26 » Sat Dec 05, 2020 5:17 pm

I’m the first to agree there is way too much short term thinking going on in Chile.

However anyone who relies solely on their AFP for their retirement is already screwed let’s be honest, imagine if your monthly income in retirement went down from $140K to $120K... yeah it’s 20,000 pesos but you were never gonna survive of the $140K anyway.

And at the same time, if that’s what you’re looking at for retirement, you or someone in your immediate family has almost certainly been affected by Covid economically.

Hence why it’s a no brainer for most people, not just about wanting a new phone or to splurge it all on a massive asado.

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Re: Second AFP withdrawal

Post by 41southchile » Sat Dec 05, 2020 7:42 pm

bow26 wrote:
Sat Dec 05, 2020 5:17 pm
I’m the first to agree there is way too much short term thinking going on in Chile.

However anyone who relies solely on their AFP for their retirement is already screwed let’s be honest, imagine if your monthly income in retirement went down from $140K to $120K... yeah it’s 20,000 pesos but you were never gonna survive of the $140K anyway.

And at the same time, if that’s what you’re looking at for retirement, you or someone in your immediate family has almost certainly been affected by Covid economically.

Hence why it’s a no brainer for most people, not just about wanting a new phone or to splurge it all on a massive asado.
Yeah I can see that side of it , and the Latin live for the moment way of life, which is fine, but thats part of the reason the AFP pensions are so low, because very few people have actually contributed all their working lives , they get cash jobs or are independent or they work an agreement with their employer so that jt looks like they are getting less pay on paper so they don't have to pay as much, there is so much wrangling of the system.

The system had many flaws and have poorly administrated in many cases, and there should have been employer contributions too. However, is its not just this 10 percent that is short term thinking, its the fact many people have dodged contributions and were ignorant in planning and understanding compounding investments, savings etc, taking on too much credit in their lives erc, there is any number of reasons pensions are so low, Its not as simple as "AFPs bad" as many politicians and commentators make the argument out to be.
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Re: Second AFP withdrawal

Post by admin » Sun Dec 06, 2020 9:00 am

well, there is another problem with the AFP system that no one talks about.

most of the people collecting pensions now, did not pay in for their entire life because the AFP system did not exist.

even among those, think about the value of the chilean currency through the 90's, the minimum wages, various financial crisis, etc.

That is before getting to the crappy brokers running the AFP, and other dtructural problem with the system.
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Re: Second AFP withdrawal

Post by 41southchile » Sun Dec 06, 2020 11:02 am

admin wrote:
Sun Dec 06, 2020 9:00 am
well, there is another problem with the AFP system that no one talks about.

most of the people collecting pensions now, did not pay in for their entire life because the AFP system did not exist.

even among those, think about the value of the chilean currency through the 90's, the minimum wages, various financial crisis, etc.

That is before getting to the crappy brokers running the AFP, and other dtructural problem with the system.
Yeah I heard that before the AFP system existed there was another system . I am not sure how it worked, but it was better to be in that financially speaking . The guy that drives the excavator that does some work for me is in the old system, and gets 300k a month, still not a lot, but he works as well still, he reckons people he knows that switched to the new AFP system, (again not sure exactly why or how that worked, but he managed to stay in the old system ) they get 200k from the AFP.

I'm certainly not defending the AFPs but they don't exist in isolation, the politicians must take most of the blame, the AFPs existed to make a profit, the politicians failed to regulate them properly because most of the time there was a conflict of interest because they owned shares in it, employers were never made to contribute because of the lobbying from employers and the conflict of interests there .
But then I suppose you could also say the politicians don't exist in isolation and they are representives of the people, but the citizens gave up on being represented and being involved in politics and instead chased having a new pick up which they bought on 48 easy payments with 20 percent anual interest to impress the neighbors or flew off to the world cup on 48 payments on their credit card, and left the fox in charge of the hen house.

I know hindsight is a wonderful thing, but to try and pinpoint and blame any one particular party or group for the problems that exist in Chilean society is difficult. I believe its all circular, nothing happens in isolation.
I just wish people (citizens, politicians etc) would either tell the full story or self reflect on their own behavior, and be honest with themselves a bit more rather than blame and get angry and emotional.
I guess thats a bit much to ask 18 million times. Anger and simplistic arguments are what has stuffed this country and will continue to do so for a long time
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Re: Second AFP withdrawal

Post by fraggle092 » Sun Dec 06, 2020 12:51 pm

41southchile wrote:
Sun Dec 06, 2020 11:02 am
.. I just wish people (citizens, politicians etc) would either tell the full story or self reflect on their own behavior, and be honest with themselves a bit more rather than blame and get angry and emotional.
I guess thats a bit much to ask 18 million times. Anger and simplistic arguments are what has stuffed this country and will continue to do so for a long time
It's worth reading José Piñera's account of why the AFP system was introduced in the first place - attitudes haven't changed much since he wrote it.

http://www.josepinera.org/zrespaldo/el_ ... l_gato.pdf
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Re: Second AFP withdrawal

Post by cali_chile48 » Sun Dec 06, 2020 2:16 pm

I think it's a pretty simple calculation for most people, and it has nothing to do with a "screw tomorrow, I want to have fun today" mentality. Anyone with half a brain can figure out that 10% is more useful today than whatever the benefit will be from age 65 to 110.

Calculating a benefit based on the idea that someone will live to be 110 years old is a ridiculous, obvious scam. If the suits want people to stay in the system, they need to recalculate the benefits based on a more reasonable average lifespan....like...say....85 years.

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Re: Second AFP withdrawal

Post by 41southchile » Sun Dec 06, 2020 2:23 pm

fraggle092 wrote:
Sun Dec 06, 2020 12:51 pm
41southchile wrote:
Sun Dec 06, 2020 11:02 am
.. I just wish people (citizens, politicians etc) would either tell the full story or self reflect on their own behavior, and be honest with themselves a bit more rather than blame and get angry and emotional.
I guess thats a bit much to ask 18 million times. Anger and simplistic arguments are what has stuffed this country and will continue to do so for a long time
It's worth reading José Piñera's account of why the AFP system was introduced in the first place - attitudes haven't changed much since he wrote it.

http://www.josepinera.org/zrespaldo/el_ ... l_gato.pdf
Thanks I will take a look
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Re: Second AFP withdrawal

Post by 41southchile » Sun Dec 06, 2020 2:46 pm

cali_chile48 wrote:
Sun Dec 06, 2020 2:16 pm
I think it's a pretty simple calculation for most people, and it has nothing to do with a "screw tomorrow, I want to have fun today" mentality. Anyone with half a brain can figure out that 10% is more useful today than whatever the benefit will be from age 65 to 110.

Calculating a benefit based on the idea that someone will live to be 110 years old is a ridiculous, obvious scam. If the suits want people to stay in the system, they need to recalculate the benefits based on a more reasonable average lifespan....like...say....85 years.
I would be interested in hearing the truth about the "110 year calculation ". I heard an interview on the radio a while ago that was explaining how the calculations worked, I was driving and wasn't paying attention fully, but its not as its made out to be. I have heard so many arguments and disinformation that I don't actually know what to believe anymore from either side.

But yeah, whatever, people can do what they like, but as sure as the sun rises every day there will be bitching and moaning and blaming everyone else when things don't work out.
“Facts do not cease to exist because they are ignored.”

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