A Credit is an account that receives monthly contributions from the employee, employer, and government so that the worker can dispose of those funds when the time of retirement comes.
In this article, we will tell you the main benefits of having a Credit and how to get the most out of them
Basically, a Credit account is a tool that will allow you to have financial assistance upon your retirement. This will allow you to cover your needs when you are no longer active at work.
The agency responsible for regulating the Credit in Mexico is the National of the Retirement System (NRS). This institution monitors the adequate protection of the funds deposited in the Credit.
In addition, NRS guarantees that workers’ funds are invested according to the provisions of the Investment Regime rules. On the other hand, it is empowered to impose sanctions or fines in case of breach of regulations.
By law, if you are a dependent worker and are listed on the Mexican Social Security Institute (IMSS), it is mandatory that you have an individual Credit account. However, since 2005, independent workers may also have a Credit account.
Do you know what are the main benefits of having a Credit?
During your active working life, you probably don’t think too strongly about the future and how you will stay financially once your retirement has arrived. However, it is important to think about how you will face old age economically.
A Credit account is an ideal instrument to ensure a dignified old age and cover all your needs. There are many benefits that you will get at the level of savings and investment.
You should know that the funds in these accounts are used by the financial entities that manage them, to invest them and produce a return. These resources are generally allocated to energy and infrastructure projects.
Being invested money generates a return. That performance is higher than in other market instruments. Basically, your pension money is more profitable in a Credit account than in another type of investment.
A Credit account can allow you to lead a dignified adult life, without worrying about the fact that you no longer belong to the active working world.
On the other hand, and no less important is the tax issue. By having a Credit account you can deduct taxes from the voluntary contributions made until the moment of your withdrawal.
How does Credit work?
As we told you at the beginning, the law establishes that, if you are a dependent worker and contribute to the IMSS, you must have a Credit account. In the same way, if you are an independent worker you can request the opening of an account and make contributions.
The NRS will be responsible for assigning you an account automatically as soon as you register with the IMSS. The agency will choose the account that charges the lowest commission according to your age.
Gradually you will have the option to continue with the account assigned to you by NRS or change to a new Credit.
You should know that regardless of whether you have already stopped working, your money is safe and you do not lose it, since it is still invested and generating a return.
What is a Credit for?
In addition to the obvious benefits that it generates to retirees, a Credit has great relevance for the economy of a country.
As we have explained, the funds deposited in the Credit accounts are used to invest and finance a large part of Mexico’s industrial and technological development. These resources clearly generate development for the GDP of our country.
How to have more money in your Credit?
The way to have more money from your Credit is through the increase of voluntary contributions, when you decide and according to your possibilities. In this way, your money grows and generates much higher returns.
How to increase my voluntary contributions? It is very simple and has several ways to do it, including:
- Directly in the Credit
- Via payroll
- Via App Transfer or Credit Mobile
And the millennials?
It is estimated that most millennials do not see old age savings as a topic of great relevance. According to a study by NRS, only 2 out of 10 people of this generation worry about saving for retirement.
This is something that would be extremely negative for this generation when it is time to retire. Millennials are motivated to save to have a mattress that allows them to face unforeseen events.
While previous generations did it to achieve stability, maintain control of debts, secure their future and have time for their families in the long term.
However, millennials have an advantage over their predecessors and it is nothing other than the internet, social networks and other technological tools. This has led them to be familiar with key terms and instruments for their finances.
Thus, millennials should take advantage of the resources and advantages they have, to establish solid strategies that allow them to have future financial stability.
It is clear that having financial support for old age is more than necessary, to ensure your quality of life after having completed your productive years.
Therefore, the Credit is a convenient instrument to ensure your long-term health, mobility and economic well-being needs.