Planning for retirement is essential to maintain a comfortable lifestyle post-employment and avoid financial dependency on family members.
Early planning allows you to leverage various retirement assistance options such as pension plans, PERA investments, real estate, and mutual funds.
By setting clear goals, protecting your income, considering health expenses, and diversifying investments, you can achieve a financially secure and fulfilling retirement.
Why Plan for Retirement?
Planning for retirement is important to maintain a comfortable lifestyle even after you stop working.
Without proper planning, you might have to depend on your family for financial support.
Thinking ahead not only secures your future but also provides peace of mind in case of emergencies.
By planning early, you can achieve financial freedom and well-being in your later years.
Public and Private Institutions Offering Retirement Assistance
Government Service Insurance System (GSIS)
The GSIS provides pension plans exclusively for government employees.
Members can choose between a five-year lump sum or cash payment with an instant pension.
Additionally, GSIS offers a refund of contributions upon retirement, providing financial support to retired government workers.

Social Security System (SSS)
The SSS offers pension plans for private sector employees.
To qualify, members must have made at least 120 months of contributions before the semester of retirement.
The monthly pension amount depends on your contributions, credited years of service, and the number of dependents.

Pag-IBIG Fund
The Pag-IBIG Fund, through its Regular Savings Program, allows members to withdraw their contributions after 20 years or at the retirement age of 60 or 65.
This program helps members to have access to savings to rely on during post-employment.

Personal Equity Retirement Account (PERA)
The PERA program, launched by the Bangko Sentral ng Pilipinas (BSP), encourages Filipinos to save for their golden years with significant tax benefits.
Contributions can be invested in various financial products, and the earnings are tax-free.
BDO and BPI are the only financial institutions accredited as PERA administrators.

Private Insurance Companies
Many private insurance companies offer Variable Unit Linked (VUL) insurance plans.
These plans combine life insurance with investment opportunities in stocks and bonds, providing both coverage and growth potential for your retirement fund.
Mutual Funds and Unit Investment Trust Funds (UITFs)
Mutual funds and UITFs are offered by various financial institutions, including banks and insurance companies.
These funds pool money from different investors to invest in diverse assets, managed by professional fund managers.
Real Estate Investment
Investing in real estate, whether through private companies or individual ventures, can provide a steady income stream during retirement.
Real estate properties tend to appreciate over time, adding to your financial security.
Types of Retirement Assistance in the Philippines
1. Pension Plans
A pension plan is a retirement plan where employers pay contributions to a pool of funds set aside for the employee’s future benefit.
This pool of funds is invested, and you receive your earnings during retirement either as a monthly payment or a lump sum.
You can obtain a pension plan from private providers, but the most common ones are offered by the Government Service Insurance System (GSIS), Pag-IBIG Fund, and Social Security System (SSS).
- GSIS Pension Plan
Exclusive to government employees, this plan allows you to choose between a five-year lump sum or cash payment with an instant pension.
You can also get a refund of your GSIS contribution upon retirement. Find out how here. - Pag-IBIG Pension Plan
Known as the Pag-IBIG Regular Savings Program, this plan lets you withdraw your contribution after 20 years or at retirement age (60 or 65). Learn more here. - SSS Pension Plan
Available to SSS members with at least 120 months of contributions.
The monthly pension depends on your contributions, credited years of service, and number of dependents. Read more here.
2. PERA Investment
Launched by the Bangko Sentral ng Pilipinas (BSP), the Personal Equity and Retirement Account (PERA) aims to help Filipinos save for your golden years.
You can contribute PHP 100,000 annually or PHP 200,000 if you are an OFW.
PERA offers a 5% tax credit, and the earnings on investment are tax-free.
You can invest your PERA contribution in annuity contracts, exchange-traded bonds, insurance products, locally traded stocks, mutual funds, pre-need pension plans, and unit investment trust funds (UITFs).
Currently, only BDO and BPI are accredited as PERA administrators.
3. Insurance Plans
Insurance plans protect you or your assets from financial losses and can also serve as a retirement fund.
There are many insurance products to fit your needs, including life and non-life insurance.
Life insurance pays out a set amount in case of the insured’s death, while non-life insurance covers people, properties, and other liabilities.
4. Investment Funds
An investment fund is a pool of funds from various investors used to buy securities collectively.
Each investor retains control over their share, and the return potential is higher compared to mutual funds.
Investment funds can significantly grow your retirement savings.
5. Real Estate
Investing in real estate can provide a steady income for your retirement fund.
However, the initial investment can be substantial, and you need to study the property market before building your portfolio.
6. Mutual Funds
Mutual funds are professionally managed investment products composed of a pool of money from different investors.
The funds are invested in various assets, and investors share in the profits or losses.
In the Philippines, insurance companies typically offer mutual funds.
7. Unit Investment Trust Fund (UITF)
Similar to mutual funds, UITFs are a pool of investments managed by professional fund managers.
UITFs are usually invested in money market funds, equity, or balanced funds and are offered by banks regulated by the BSP.
8. Exchange-Traded Funds (ETF)
ETFs are collections of investments that can be bought and sold like stocks.
They are similar to mutual funds and UITFs but can be traded within the day.
Key Retirement Planning Steps to Secure Your Future
- Set Your Retirement Goals Early
Decide when you want to retire and what assets you wish to own.
Clear goals help align your career and financial decisions to achieve your retirement dreams. - Determine Your Retirement Lifestyle
Think about how you want to spend your retirement—whether traveling or starting a business.
Understanding your desired lifestyle will help you plan your finances to support it. - Protect Your Income Through Insurance
Insurance can act as a safety net, providing financial security in emergencies.
Consider policies that offer investment benefits alongside coverage for death, illness, and disability. - Consider Possible Health Expenses
As you age, health complications may arise.
Invest in health insurance to cover potential medical expenses so that you don’t deplete your savings. - Diversify Your Investments
Avoid putting all your money into a single investment.
Spread your investments across various assets to minimize risk and achieve financial stability. - Strategize According to Your Time Horizon
Your strategy should depend on your current age and ideal retirement age.
Younger professionals can afford riskier investments, while older individuals should focus on safer options.
Video: 2953 | Importance of retirement planning
In this insightful discussion, Vince Rapisura emphasizes the importance of planning for your golden years. Learn valuable tips and strategies to secure a financially stable future during your retirement years.
Conclusion
Planning for retirement is not just a financial task; it’s a commitment to securing your future well-being.
Starting early allows you to take full advantage of the various retirement fund options available in the Philippines, from pension plans and PERA investments to real estate and mutual funds.
By understanding and utilizing these options, you can build a robust and diverse portfolio post-employment.
Setting clear goals, determining your desired lifestyle, protecting your income through insurance, considering health expenses, diversifying investments, and strategizing according to your time horizon are essential steps to promote a comfortable and financially stable retirement.
Don’t wait for retirement to become an urgent concern.
Take action now to prepare for a future where you can enjoy the fruits of your labor without financial worries.
Remember, the choices you make today will shape your tomorrow.
Invest wisely, plan thoroughly, and secure a happy, healthy, and fulfilling retirement.
By following these guidelines, you can confidently look forward to a future where you and your loved ones are well taken care of.