Your pension according to your age: what future awaits you and how to improve it

The future of your retirement is practically already decided by your date of birth. We'll clearly explain which pension system is right for you based on your generation, how much money you could receive, and what you can do starting today to improve it.

Retirement is one of the biggest financial concerns for Mexicans, but the path to achieving it is marked by a deep generational divide. Pension system reforms over the years have created drastically different realities for workers, depending solely on their age and when they began contributing. Your retirement future, to a large extent, is already written, and understanding which group you belong to is the first step to planning wisely.

The rules of the game are not the same for everyone. In Mexico, three parallel pension systems coexist, in practice, with very different results. Identify your generation to understand your situation:

• Those over 50 (with the option to opt out of Law 73): Social Security Act of 1973, up to 100% (if they retire at age 65). They enjoy the highest benefits. Their pension is calculated based on their average salary over the last five years.
• Transition Generation (ages 30 to 50): 1997 Law (Afore). Between 30% and 35% (before supplements). They depend 100% on their savings in the Afore. For most of their working lives, they contributed at low rates (6.5%).
• Young people (under 30): 1997 Law (Afore) with reforms, between 45% and 50% (before supplements). They benefit from higher contributions (increasing to 15%) throughout their working life.

This "generational lottery" has created an unprecedented equity gap. A worker who began contributing before July 1, 1997, is entitled to a pension based on their salary, while someone who started the day after will depend exclusively on what they manage to save in their individual account. Although recent reforms seek to improve the situation for younger people, structural inequality based on date of birth persists.

To try to mitigate the low pensions in the Afore system, the Pension Fund for Welfare began operating in 2025. This fund, financed with resources from inactive Afore accounts and other sources, has a specific objective: to supplement the pensions of workers under the 1997 system.

How does it work? Its purpose is to ensure that eligible workers receive a pension equivalent to their last salary, up to a maximum of the average salary registered with the Mexican Social Security Institute (IMSS), which in 2025 will be around $17,748 pesos per month. For example, if a worker's pension with their Afore only reaches $12,000 pesos, the fund will contribute the remaining $5,748 pesos to reach the guaranteed maximum.

However, there is a crucial condition that many are unaware of: this supplement is only granted to those who retire at age 65. Those who decide to retire earlier (from age 60) will receive only their individual savings, without the right to support from the fund.

"The Welfare Fund is a safety net, but with a crucial caveat: it only covers you if you retire at age 65. Planning your early retirement means giving up this supplement."

Regardless of your generation, proactive planning is essential. The government pension should be viewed as a floor, not a ceiling.

For the Transition Generation (ages 30-50): The urgency is paramount. Your projected pension is low, and time is running out. Key actions include:

• Voluntary Savings: Make additional contributions to your Afore on a regular basis.
• Personal Retirement Plans (PRPs): Explore these instruments offered by insurance companies and investment funds. They have the advantage of being tax-deductible, giving you an immediate tax benefit while you save for the future.
• For young people (under 30): Your greatest asset is time. Although your outlook is better thanks to higher mandatory contributions, don't get complacent.
• Adopt the habit of saving: Start making voluntary contributions, even small ones. Compound interest will work wonders over 30 or 40 years.
• Consider long-term investments: In addition to your Afore, explore investments in low-cost ETFs that invest in the global market. They have greater long-term growth potential.

For All Workers (Afore regime):

• Review your account statement: Do this at least once a year. Check your contribution weeks and the performance of your Afore.
• Choose an Afore with good returns: Not all Afores are the same. Compare net returns and consider switching to one that consistently offers better results.