Hello, mga Kanegosyo at KaSosyo! I’m sure we’re all up to our necks with the latest trends, from TikTok dances to the hottest OPM hits. But today, let’s switch things up a bit. As a young, hardworking Gen Z, we have a world to conquer and a future to design. And part of that future? It’s understanding the SSS retirement benefits. Let’s dive right in, shall we?

Now, you might be thinking, “Retirement? Ako? Pero ang bata-bata ko pa!”

Hold up, though! No one’s rushing you to retire. Pero, isn’t it a great idea to prepare for the golden years while we’re young and vigorous? That way, we’ll have more than just memories of our youth. We’ll have security, comfort, and a well-deserved reward for our years of hard work.

A young Pinoy’s journey to retirement

Let’s meet our kababayan, Jose. He’s a 25-year-old marketing professional from Quezon City. Jose has big dreams, like many of us do. He wants to create epic advertising campaigns, climb the corporate ladder, and of course, enjoy life – a beach getaway in El Nido, perhaps, or making it big in the esports scene.

Yet, amidst his dreams, Jose realizes something. All his plans revolve around his youth. He hasn’t thought about his older self – a Jose at 60, or even 65. It’s not that he doesn’t see himself growing old. It’s just that it seems too far away, too distant to worry about.

But retirement isn’t just about sipping fresh buko juice while watching the sunset (though that’s part of it). It’s about security and financial stability when our working years are over. And this is where our SSS retirement benefits come in.

SSS retirement benefits are like a thank you note from our government for our years of toiling and hustling. These benefits ensure we don’t have to worry about finances in our golden years. To be eligible for these, we need to meet specific criteria – like reaching a certain age and number of contributions.

How much SSS pension to expect

Our kababayan Jose, curious about his own future, decides to dig a little deeper. He learns that the benefits are calculated using a seemingly complex formula, but it boils down to a few key elements – Average Monthly Salary Credit (AMSC) and Credited Years of Service (CYS). These determine how much we’ll get monthly once we decide to take a step back from the workforce.

Let’s assume that Jose has highest possible regular SSS monthly salary credit is which is PhP20,000; and will have a total number CYS of 40. The formula is:

Monthly pension = PhP300 + (20% AMSC) + [2% x AMSC (CYS – 10)]

= PhP300 + 8,000 + [2% x 20,000 (40 – 10)]

= PhP8,300 + (400 x 30)

= PhP8,300 + 12,000

= PhP20,300

Regular SSS pension is not enough!

When Jose saw that his expected SSS monthly pension will only be about the same when he retires, he suddenly remembered his economics professor’s discussion on inflation. That PhP20,300 is only worth PhP2,834 upon retirement. His heart started racing and pounding. How will he retire with that small amount?

WISP as monthly pension booster

Relax Jose, of course, a pension plan will adapt to the times. SSS has increased its monthly salary credits in the past and for sure, future adjustments will be made. But there are two additional building blocks that SSS offers, the Worker’s Investment and Savings Program (WISP).

WISP is a mandatory retirement savings program for SSS members who earn above PhP20,000 up to a maximum of PhP30,000. This will further increase to PhP35,000 in 2025. Employers provide a majority share for WISP contributions. SSS invests this in safe securities and targets a return of at least 4.5% per annum. Although in the first year of its implementation in 2021, WISP Fund earned 6.39%.

The total accumulated value can then be withdrawn upon application of retirement from the regular SSS.

Voluntary retirement savings account

When Jose learned about WISP, he had a slight sigh of relief, and is keeping his fingers crossed that the government will adjust monthly salary credits that at least moves with the inflation rate. Even then, he’s still wants to make sure that he’s going to do more than the mandatory SSS retirement requirements. He wants to add more to his retirement fund.

Fortunately, SSS has a WISP+ program that is implemented this year. This is a voluntary retirement savings account with a minimum of PhP500 contribution. SSS will also invest this similar to WISP. Jose remembered the power of compounding in his economics class. He knows that a small amount saved now, will grow exponentially especially that he has at least 40 working years ahead of him. He can save up for retirement with peace of mind since WISP and WISP+ are guaranteed and are also tax-free.

Preparing for a worry-free retirement

The SSS retirement building blocks: regular, WISP and WISP+ may seem like a complex web of numbers and jargon, but once we understand it, it’s a piece of cake. It’s all about preparing for a future that might seem far away but is coming faster than we think. After all, we want to retire not just in comfort but in style, don’t we?

So, dear Gen Z, as we hustle, let’s not forget to save and prepare for our future selves. Let’s not just work hard but work smart. After all, we want our retired selves to thank us later, right?

Remember, our SSS contributions aren’t just a piece of our paycheck going somewhere we can’t see. It’s a step towards a secured and comfortable future. It’s our way of telling our future selves, “Relax ka lang, I got you covered.”

Ako si Sir Vince ang inyong financial guro, nagsasabing, ang pagyaman, napag-aaralan at napagtutulungan!

Gusto mo bang mapag-aralan pa ang tungkol sa retirement? Sumali sa Retirement and Estate Planning Webinar sa December 8 and 15, 2023. 

Details at http://vincerapisura.com/webinars. Mag-register na sa https://bit.ly/rpwebinar-register