Latvian retirement savings: Experts suggest a ‘fourth pension level’

Experts suggest that state pensions alone may be insufficient for a comfortable retirement, prompting the concept of a ‘fourth pension level’—self-created long-term savings to supplement existing systems.

A Luminor bank survey indicates that many residents in Latvia still prefer conservative financial approaches. Approximately 15% of the population saves for retirement using savings accounts or similar tools, while only 10% engage in active investments.

Financial experts, including Atis Krūmiņš of Luminor, note that while savings accounts are suitable for short-term emergency funds, they often fail to grow capital effectively over the long term due to inflation. To combat the loss of purchasing power, it is recommended to distinguish between short-term safety reserves and long-term investments that offer higher potential returns, such as stocks, tailored to an individual's age, income, and risk tolerance.