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How much should the bonus be to prevent the asset from losing purchasing power?

How much should the bonus be to prevent the asset from losing purchasing power?

An analysis revealed How much will be the possible loss of purchasing power of retirees during the first 5 months of the year Taking into account that the government has just formalized through resolution 38/2024 the increase in retirements for the March-May period.

Specifically, an increase of 27.2% was established for the March-May period to be applied to February’s assets. The minimum retirement will thus go from $105,713 to $134,446. An analysis by Nadin Argañaraz calculated how much the bonus should be to prevent assets from losing purchasing power

This calculation assumed a inflation of 16% in February, 15% in March, 13% in April and 10% in May. “Given the nominal increase and the expected inflation, March salaries, even increased, would have a loss of purchasing power of around 44.5% compared to the same month in 2023,” he highlighted.

In turn, it reported that the first quarter’s assets, in turn, would have a loss of purchasing power of around 43.4% and that The joint assets of the first 5 months would have a loss of purchasing power of 44.8%.

In this regard, he added: “If the government wants retirees to have pensions in 2024 with the same purchasing power as in 2023, “has as its instrument the compensatory bonus, which has been given for a few years”.

The economist revealed that a bonus of $170,000 in each of the three months would only compensate for the loss in the month of March and would leave a loss of purchasing power in the first quarter of 17.7% and a loss for the first 5 months of 12.7%, compared to the same period in 2023.

“That is to say that with a bond of this value, retirees would complete 5 months of 2024 with loss of purchasing power. In order not to have loss of purchasing power with a bond of $170,000, inflation should be 3% monthly average in the March-May period,” he added.

That is, Even giving a bonus of $170,000 in March, April and May, there should be a sharp drop in inflation to avoid actual loss of income during the first 5 months.

Continuing with the base inflation forecast in this analysis, It is essential to calculate what bonus value would allow retirees with the minimum to finish the first 5 months of the year with the same purchasing power as in the same period of 2023. In this regard, Argañaraz said that The answer is a bonus of $236,000 to be granted in March, April and May.

Only with this bonus, given the expected inflation, retirees would reach the month of May with a purchasing power for the period equal to that they had during the first 5 months of 2023, he explained.

Source: Ambito

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