Opinion – From Grain to Grain: What assets do you need to retire with a deputy’s income?

Last Friday, the president of the Chamber of Deputies, Artur Lira, granted the current president retirement as a federal deputy in the amount of R$30,000 per month. Bolsonaro worked for 28 years in this role. I explain what it would be necessary to save, over this time, to have the same retirement as a deputy.

In order to estimate the necessary assets to retire with the income of a congressman, it is necessary to define two variables: the time for which you will receive this income and the real interest rate that your assets should earn in this period.

Bolsonaro is 67 years old, but let’s assume that you retire a little earlier, that is, at the age of 65. According to the IBGE, on average, people who reach 65 years of age live another 19 years, that is, up to 84 years.

Realize that the risk in choosing this deadline is that you live longer and the money runs out sooner. Therefore, it is recommended to select a longer term for the calculation, for example, 25 years.

For the real interest rate, the one above inflation, it is also important to define a more conservative rate, that is, lower than the current one. After all, interest rates can fall over time, as they did in 2020. Thus, a rate of 4% per year above the IPCA would be the most recommended for the calculation.

In this way, the assets needed to obtain a federal deputy pension would be R$ 5.73 million. I wrote an article explaining how to do this calculation using a financial calculator.

To arrive at this equity, let’s consider an investment term equivalent to the time worked by the president and a real interest rate equal to 4% per year, above the IPCA.

In this way, it would be necessary to have saved an amount equivalent to R$ 8.4 thousand per month at today’s values.

Note that all interest rates used were above the IPCA. Therefore, the values ​​are all equivalent to today’s prices. Conservative returns were also considered to provide greater security for achieving the target.

According to the website of the Chamber of Deputies, a deputy currently earns a gross salary of R$ 33,760 per month. Therefore, if he were a private sector employee, he would need to save a quarter of his salary, for about three decades, to retire with an income of R$30,000 a month, as happened with Bolsonaro.

This is a good goal to set yourself as a goal for next year: save 25% of your income for 30 years and you can retire on your working salary.

Michael Viriato is an investment advisor and founding partner of Investor House

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