SSS retirement benefit or pension as we normally call it is one of the few benefits employees are entitled to receive when they retire. So before you empty your savings by joining the YOLO, you will only live once, and FOMO, fear of missing out, craze you may want to consider how much you’ll be getting from SSS by the time you’ll retire. Are you ready to know how
small it will be?
Yes I know, I also suddenly felt like a certified tito like how they call it now because of all these acronyms. Lucky me there’s Google to provide me with the info haha!
Table of Contents
Know Your SSS Contribution Table
I’m going to teach you how to read the table below. Yes, I know how you despise seeing this kind of table so do I hehe. Sadly, this is needed in order for you to compute your monthly pension.
Here is the new SSS contribution table:
Employed, Self-Employed, Voluntary Member, and Non-Working Spouse
You can use this new SSS contribution table if you are an employed, self-employed, voluntary member, or non-working spouse.
Household Employers, Kasambahay, and OFW Members
You use this new SSS contribution table if you are a household employer, kasambahay, or an OFW member.
Let’s begin with the range of compensation. This is just your basic monthly salary on which the remaining components are based. Monthly Salary Credit (MSC) is the median of the range of compensation. It’s also good to note that the maximum MSC is only set at 20,000. The contribution rate on the table is 12% of your monthly salary credit which is being shared by you (4%) and your employer (8%).
I know you need an example so this is what you are waiting for. If an employee has a salary of Php 25,000 per month then his MSC is pegged at Php 20,000 only. Remember that it is already the maximum MSC in the table, right?
Average Monthly Salary Credit (AMSC) is computed based on the last 5 years of service.
Credited Years of Service (CYS) is the total number of years your SSS contribution is paid. One CYS is equivalent to at least 6 months’ contributions paid in any given year.
3 Simple Formulas to Compute Your SSS Pension
After knowing the terms, you can finally compute for your pension. SSS provided three formulas that you can use to compute your monthly pension. Because there are three formulas, you will also get three answers and whichever is the highest among them will be your monthly pension.
Here is how to compute the SSS retirement benefit:
1. Based on the Credited Years of Service (CYS)
The first formula is highly driven by the number of years you paid your contribution. This simply translates that the more years you contribute the higher your SSS pension will be. However, this formula is only good to use if you paid or planning to pay for more than 19 years.
2. Minimum SSS pension
SSS pegged the lowest pension that a member can receive in order for them not to get less than the minimum. This formula best serves the below-minimum wage earners and workers with less than 10 credited years of service.
3. Based on the Average Monthly Salary Credit (AMSC)
The formula is based on your AMSC. You can maximize your SSS pension using this by increasing your contribution. But it is also good to note that this is the formula to use if you contributed or planning to contribute for 19 years and below.
The three formulas remain the same as per R.A. 11199 plus Php 1,000 for all SSS pensioners.
Pursuant to Memorandum from the Executive Secretary in 2017, by the authority of the President, an additional Php 1,000 shall be given to all pensioners.
The first formula will give the highest amount if you plan to work for a very long time. Notice the 2% addition to your pension for every CYS when you surpass the 10 years mark. The second formula is something you don’t even want to have as your pension, right? Come on, even that ₱2400 plus Php 1,000 will not be enough for your maintenance medicine. The last formula, however, is very straightforward and easy to compute.
Sample Computation of SSS Pension
With all the formulas presented, you might feel the need for an example so I decided to add one. In this example, Mr. Wise started working at the age of 20 and he is planning to retire when he reaches the age of 60. His salary for the last 5 years is ₱60,000. Can you help him in computing his pension?
CYS: 40 years (started working at 20 and plans to retire at 60)
AMSC: ₱ 20,000 (this is the maximum MSC regardless of his salary)
The following values are attained based on the new SSS contribution table for 2019. This is for illustration purposes only as it will be different in the coming years.
If you’ll look at the figure above, formula #1 provides the highest amount which means that this is the pension Mr. Wise Guy will get starting at age 60.
Suan, malaki-laki na din pala yung pension sabi mo maliit lang.
A good thing to understand is that the amount was calculated from 40 years of credited years of service. If you are planning to have an early retirement then your pension will be lesser. Personally, I don’t want to work for that long. I want to enjoy life and spend more time with my family. If you are like me, a pension of ₱17,300 is pretty impossible knowing I’m not planning to work for that long.
Average SSS Retirement Benefit
Do you know the average pension retirees get? The illustration above is just an example so don’t be excited yet. The following is the average SSS pension throughout the years and you’ll be alarmed knowing that it may not be enough to sustain a living.
Can you get over those digits? These are only averages so you must keep yours on top of it but if you don’t and settle with those numbers then your retirement will be doomed. So how can you level up the game and secure your future? Simple, you must have a contingency plan. Don’t just settle for saving your money, you must also invest to beat inflation.
Build Your Retirement Fund
You may consider getting a VUL plan that has income protection with a wealth accumulation plan. Give your family financial security and peace of mind while growing your money over time. You may request a quotation and financial consultation by following the link below.
If you have at least Php 250,000 sitting in your bank account then you may consider investing it in a single-pay VUL. This will help you grow your money better than what you normally get for your savings account while getting life insurance protection.
While SSS provides a good retirement benefit. You should not rely on it solely if you don’t want to struggle financially during your golden years. Consider investing your money in a mutual fund, UITF, VUL plan, etc. that will not only beat inflation but also provide you the comfortable retirement you deserve.
Federico is an electronics engineer, financial blogger, insurance agent, and a certified investment solicitor. A multi-awarded financial advisor with clients ranging from lawyers, doctors, engineers, accountants, business owners, company directors, and OFWs to minimum wage earners had sought advice from him in achieving lifetime financial freedom.