At the end of May, the amount of voluntary savings was 108,601 million pesos (mdp). This meant an annual increase of 14.2%, according to the National Commission of the Retirement Savings System (Consar).
Compared to the month of April, the balance showed an increase of 3.5% to 104,837 million pesos. In the fifth month alone, 3,764 million pesos entered, the largest amount so far in 2022.
Enrique Díaz-Infante, specialist director of the financial sector and social security of the Espinosa Yglesias Study Center (CEEY) commented that the increase is to be celebrated because people are aware of saving.
“It talks about financial education in a society that is aging and that is realizing that it has to save for its future. The 14% increase is a reflection of the awareness of the workers,” Díaz-Infante said in an interview.
The CEEY analyst also mentioned that the amount of voluntary savings becomes more relevant due to the inflationary context that Mexico is going through. In May alone, the National Consumer Price Index stood at 7.65% at the annual rate.
“Mexicans are making an effort, despite the inflation that is eating up spending, this shows that the Afore instrument is here to stay and that it is an essential tool for the worker and a long-term wealth strategy,” he commented. Diaz Infant.
Voluntary savings is the additional contribution that a worker makes to his Afore account and that can be used for a future expense or investment or to increase the amount of the pension, explained Consar.
Voluntary savings are deductible
In accordance with the Income Tax Law, in its article 151, fifth section, voluntary contributions are tax deductible.
The law establishes that the amount of the deduction will be up to 10% of the taxpayer’s cumulative income.
For fiscal year 2021, said contributions cannot exceed the amount of 163,467 pesos voluntarily saved during one year.
The maximum to be deducted cannot exceed 15% of all personal deductions combined with other concepts such as donations, medical expenses or funeral services.