Imagine this: After having worked tirelessly for decades, you’re now all set to retire.

Napaaral mo na ang mga anak mo, napakain ang pamilya araw-araw, at nagsakripisyo para sa kanila. It’s time for your well deserved retirement!

No more 9-to-5 job, hectic traffic, and stressful projects. You get to relax now and take more vacations.

Without a job, where will you get the money to pay for your living expenses? Siyempre, sa SSS pension mo!

Or maybe not. Especially if your Social Security System (SSS) pension amounts to a paltry P4,300 per month.

Read on to learn the heartbreaking story of how relying on SSS pension shattered Manolo Villareal’s dream of financial security and more importantly, what we could learn from his experience so we don’t experience his misfortune.

sss philippinesSa isang article na pinublish sa Philippine Daily Inquirer, Manolo Villareal started by detailing how excited he was to open the letter revealing how much his monthly pension would amount to.

At bakit nga naman siya hindi magiging excited? After all, he had worked in the private sector for over 35 years. That means he has made contributions to his SSS pension more than 420 times! Inisip niya na siguro naman, pagkatapos ng lahat ng binayaran niya sa SSS pension niya, malaki-laki ang makukuha niyang pension mula sa SSS.


“A nightmare came and altered my beautiful dream”

Unfortunately, it seems that the SSS thought otherwise. That’s because, in Villareal’s own words, “…a nightmare came and altered my beautiful dream.”

His feelings of accomplishment from sending his kids through college and owning a house and lot turned to frustration upon learning that his SSS pension would amount to only P4,300 per month.

How in the world can a retiree, who had contributed to his SSS fund for over 35 years, be awarded only P4,300 every month? More importantly, how can a retiree, who has living expenses AND more medical bills to pay, live on just P4,300 every month?

Sa madaling salita, hindi niya ito magagawa. Dahil dito, hindi pa siya makakapag-retire. Or worse, he’ll have to depend on his children for his living expenses.

Given these alternatives, you can just imagine the disappointment and frustration that Villareal must’ve felt upon learning his fate with the SSS. Sa P4,300 per month, ang income ni Villareal ay naging katumbas ng pinakamababang income level sa Metro Manila!

Photo courtesy of KMU / Bulatlat

Photo courtesy of KMU / Bulatlat

To add insult to injury, this was also at the time when the SSS was being scrutinized for rewarding themselves with millions of pesos in performance bonuses. Villareal summed it up when he said:

How could they call it performance if they cannot live up to its name, social security? I was so mad at them feeling that part, how small it may be, of the money they are feasting on is mine.


Financial insecurity

social insecurity system - sss philippines

Amid the nightmare that had befallen him, Villareal was right when he mentioned that:

The SSS, a government retirement program for employees, is a misnomer. What it is giving me out of the contributions I made practically in half of my lifetime is financial insecurity. In hindsight, I could have invested my contributions in private retirement plans for a better return.

Obviously, financial insecurity is something that we would not want to experience for ourselves. Kaya ngayon, aralin natin ang Smart Money Tips na matututunan natin sa kuwentong ito. This is so our dream of having a happy retirement won’t turn into our worst nightmare.

News sources: The Philippine Daily Inquirer

Lessons learned

1. The best retirement plan is YOUR retirement plan.


Base sa experience ni Villareal’s, kita naman natin na we cannot rely on the SSS for our financial security upon retirement. Therefore, the only retirement plan we can rely on is our own retirement plan.

And what if we don’t prepare our own retirement plan? Then prepare to not have a happy retirement at all.

Alalahanin mo na pag nag-retire ka na, wala ka ng income sa trabaho mo na magsusustento sa iyong pang-araw-araw na pangangailangan. These needs include food, rent/amortization, utilities, transportation, medicine, hospitalization, travel, vacation, and gifts to relatives, to name a few.

Baka ang P4,300 na binibigay ng SSS kada buwan ay para sa kuryente at tubig lamang!

If you’re not convinced, then let’s estimate how much you will need to have a happy and comfortable retirement. First, assume that when you retire, you will have twenty (20) more years to live. This means that you will need to have saved an amount that should be able to sustain you for 20 years.

But how much money will you need? Let’s conservatively estimate below:

  • Food at P50 per meal and 3 meals per day for 20 years: P1.08 million
  • Rent at P4,000 per month for 20 years: P960,000
  • Utilities at P3,000 per month for 20 years: P720,000
  • Gas and vehicle maintenance at P3,000 per month for 20 years: P720,000

Summing up just these four expense categories already yields P3.48 million!

22 - Cost of living -At hindi pa natin inadjust ‘yan para sa inflation! Alam naman natin, base sa third C of financially free Pinoys, na pwedeng dumoble, triple, o higit pa ang halagang iyan dahil sa inflation lamang.

If, say, you’re 30 years old now and you’ll retire at the age of 65, prices will still rise for 35 years. If we estimate inflation to be at 4% per year, then you can expect this amount to balloon to a whopping P11.29 million!

On top of that, we haven’t even included in this computation the costs associated with your medicine and hospitalization (which can easily cost millions), travel, vacation, and gifts to relatives. If we include these and adjust for inflation, it won’t be surprising to see this amount reach P15 million or more!

If you don’t plan for your retirement, you’ll probably end up hoping that you overcome the one-in-a-million odds of winning the lotto in order to retire happily and comfortably. Good luck with that.


Retirement is expensive. You have to plan for it yourself because the SSS won’t do it for you!


2. Start early, retire happy.


If the need to accumulate P11-15 million for retirement scares you, know that you’re not alone. Nakakatakot isipin para sa marami na kailangan may P11-15 million ka dapat by the age of 65.

Though this is difficult, we can take comfort in the fact that it is definitely achievable. Many have done it before. And it’s not just the big entrepreneurs who have done it; the list also includes ordinary employees who, like you, learned that the best retirement plan is your retirement plan.

Upon learning that they must take retirement planning into their own hands, what did they do next?

They started early. And so should you!

Kasi kung kailangan mong makalikom ng P11 million, mas madali itong gawin kung may 40 taon ka pa bago mag-retire. Kesa naman kung may 10 taon ka nalang, diba? To see the huge difference, let’s compare the two scenarios:

a. P11 million in 40 years. You will need to accumulate:

  • Every year: P275,000
  • Every month: P22,917

b. P11 million in 10 years. You will need to accumulate:

  • Every year: P1,100,000
  • Every month: P91,667

With this simple example, it’s crystal clear that the amount you’ll have to accumulate every month will be 4x lower if you start early! Add on the benefits of compounding through investing and you can further lower the amount you have to accumulate every month!

This is the reason why the old saying, “Start planning for your retirement the moment you start working” still holds true. Remember:

When it comes to retirement planning, TIME is the great equalizer. The earlier you start, the happier your retirement will be.

So if you haven’t, make sure to start planning for your retirement now! So you can be sure to have a happy and successful retirement in the future!


Having learned these Smart Money Tips, when will you start planning for your retirement? O nagsimula ka na ba? Let us know in the comments section below!


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