SSS Retirement Benefits, Updated 2014 Is it enough for your Retirement Needs? Find Out now! if you are working and you if you still don’t have a Retirement Plan right now, then your CHILDREN becomes your RETIREMENT PLAN. Mean? Yes! But true. Statistically speaking, only 2 out of 100 Filipinos plan for retirement. Although most Filipino workers have some kind of benefits like SSS or GSIS or company given benefits. How would you know if it is enough? How do you compute how much will be your retirement pension from SSS when you retire? Is your SSS retirement benefits enough? Read on and I will show you how. Foremost of all, know your average monthly SSS contribution. If you are an employee, you can ask the HR or accounting of your company or you can look at your payslip. If you are self-paying, I guess you know how much you are paying. Below is the SSS Contribution schedule updated for 2014, which estimates your total monthly contribution and employer’s contribution. sss2014crop In the table above, note the following: ER column - is your employer’s contribution EE column - is your monthly contribution. AMSC – you can see that in the second column of the SSS table. It is the average monthly salary credit. This will be applied in calculating your monthly pension. Now, let us compute for the maximum pension you can receive. Let us suppose you are receiving an average of P 16,000 monthly salary with 12 years of service. From the range of compensation, you are in the ( see table 15,750 – over), your employer’s contribution will be P 1,208.70 and your contribution is P 581.30, for a grand total of P 1,790.00. Based on SSS computation, there are three formulas which we can use in calculating your monthly pension. The pension will be based on the highest computation from the 3 formulas. formula1Monthly Pension (MP) = P300 + (20% of AMSC first 10years) + (2% of AMSC 2 years) MP = P300 + (20%*16,000) + (2% *16, 000* 2) MP = 300 + 3,200 + 640 Monthly Pension = P 4,140 formula2Since you are a contributor for 12 years. Monthly Pension = P 1,200.00 formula3MP = 40% of AMSC MP = 40% of 16,000 MP = 6,400 Monthly Pension = P 6,400.00 Based on above computations, the 3rd formula yields the highest monthly pension (P 6,400). Your monthly pension will be based on this amount. Summary: Computed above is the maximum monthly pension you can be able to receive for a 12 years contribution. If you are earning more than 16,000/month, it does not matter. It will have the same computation unless they raise the AMSC in the future. You cannot have a monthly pension unless you have given a minimum of 10 years or 120 months total contribution. If you are self-employed, you can still contribute on your own. You decide on which salary credit you want. Better get the maximum or P 1,790 pesos per month of voluntary contribution to get the maximum benefit. If you want to retire comfortably, you should have to own a private plan. Carefully guided and computed by a financial planner or financial adviser. This will be computed based on your future wants and necessities against annual inflation rate. To answer the question from the title above, is your SSS retirement benefits enough for your retirement needs? After reading above and computing on your own, it is for me to ask and for you to answer. Let me rephrase the question, “If you are to retire today (imagine you are already old right now), would P6,400 be enough for you now? How much do you need to survive today?” Consider your house, food, electricity, water, maintenance medications and other health concerns. Then answer the question. If the answer is no, want to know how to retire comfortably? Plan your future now. Now that you still have the money. Start saving for the rainy days! myfinancemd/sss-retirement-benefits-updated-2014-is-it-enough-for-your-retirement-needs-find-out-now/
Posted on: Thu, 10 Jul 2014 08:15:31 +0000
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