Financial Literacy 101
Education is the key to Financial Security
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MAY SSS KA BA?....DAPAT MO ITONG MALAMAN
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Marami sa atin pag naririnig ang salitang pensyonado, karaniwang connotation ay masarap ang buhay dahil buwan buwan ay may tinatanggap na pera karaniwan mula sa SSS or GSIS. Subalit may idea ka ba kung magkano nga ba ang buwanang pension pag ang isang empleyado ay nagretire at the age of 60?
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For this topic, I will just give you an idea kung magkano ang monthly pention ng isang SSS pensioner.
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Based on SSS website, There are two types of retirement benefit:
Monthly pension - a lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement.
Lumpsum amount - granted to a retiree who has not paid the required 120 monthly contributions. It is equal to the total contributions paid by the member and by the employer including interest.
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Benefit Computation
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The monthly pension depends on the member's paid contributions, his credited years of service (CYS), and the number of his dependent minor children that must not exceed five. The monthly pension will be the highest amount resulting from either one of these three pension formula:
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the sum of P300 plus 20 percent of the average monthly salary credit plus two percent of the average monthly salary credit for each credited year of service (CYS) in excess of ten years; or
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forty (40) percent of the average monthly salary credit; or
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P1,200, if the CYS is at least 10 but less than 20; or P2,400, if the CYS is 20 or more.
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Let us do some Math here.
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Let us say Ricky has worked in the private sector for 30 long years and under the 16,000 Average Monthly Salary Credit (AMSC). Here are the sample computations:
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Ricky'scontribution every month - 581.30
Billy’s employer contribution - 1,208.70
Total contribution per month - 1,790.00
Ave Monthly Salary Credit (AMSC) - 16,000.00
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FORMULA NUMBER 1:
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The sum of P300 plus 20 percent of the average monthly salary credit plus two percent of the average monthly salary credit for each credited year of service (CYS) in excess of ten years
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300 + 20% AMSC + 2% AMSC for years of service in excess of of 10 years (which is 20 years excess)
= 300 + ( 16,000 x 20%) + (16,000 x 2% x 20 years)
= 300 + (3,200 + 6,400)
= 9,900
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FORMULA NUMBER 2:
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forty (40) percent of the average monthly salary credit
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16,000 x 40%
= 6,400
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FORMULA NUMBER 3:
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P1,200, if the CYS is at least 10 but less than 20; or P2,400, if the CYS is 20 or more.
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= 2,400 since Ricky has rendered more than 20 years of service.
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Now\, since the first computation is the highest, then Ricky gets 9,900 monthly pension.
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REMINDER:
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This computation is merely for illustration only. Actual computation may vary depending on employee's contributions or any changes by SSS itself. You may visit the official SSS website at sss.gov.ph.
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Now that we have an idea how much the retirement pension is, apparently that will not be enough because we also have to consider some factors like inflation. So meaning, after 30 years, maliit na yung value ng 9,900 dahil mataas na mga bilihin and of course maliban sa mga bills at pagkain, madadagdagan pa yung mga expenses like maintenance medicines.
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So how do we resolve this?
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THE SOLUTION
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We, Financial advisors always reiterate our clients not to rely on SSS or GSIS pension because it will never be enough. Remember, once you retire, your salary stops but the expenses continue. Therefore, you must have a plan B. And that is planning your retirement as early as now. You should set aside a portion of your income and put it in an investment instrument so that your money grows overtime.
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Financial planning is the first step to achieve a comfortable retirement. Those who failed to do so are the ones who belong to the majority of retirees who are either become a burden to their family, or are forced to still earn a living because they have to...not because they still want to..
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The choice is yours...
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I hope this article helps!
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