Reaching the age of retirement is a major milestone for everyone, especially those who have spent years in the workforce.
During this phase, retirees rely on their pension and have the opportunity to spend more time with loved ones.
Some may choose to travel and explore new places, while others may prefer to relax and enjoy the company of family.
This period of life is well-deserved after decades of hard work.
However, before you can fully enjoy these benefits, it’s important to make sure that your Social Security System (SSS) payments are up to date.
The SSS program provides monetary benefits to Filipino members who are no longer able to work due to old age.
Below, we offer an in-depth explanation of how the SSS retirement pension benefits work.
How Much Will You Receive from SSS Upon Retirement?
The amount of SSS retirement pension benefits you will receive is determined by your paid contributions and the number of credited years of service.
The higher your contributions and the longer your years of service, the larger your monthly pension will be.
There are two ways to claim your SSS benefits: as a lifetime cash benefit paid out monthly or as a lump sum amount.
Opting for the lifetime cash option means you will receive your retirement benefit claims every month, similar to a salary.
On the other hand, the lump sum option allows you to withdraw your pension in full as a one-time payment.
Calculating Your SSS Retirement Pension
To calculate your SSS retirement pension, follow these steps:
- Determine Your Monthly Salary Credits:
Find your monthly income for the past five years by reviewing your records.
A system of income brackets is used to determine how many salary credits you earn each month.
The higher your monthly income, the more salary credits you accumulate.
You can calculate your monthly salary credits by identifying which income category your monthly income falls into on the official SSS chart.
- Calculate Your Credited Years of Service:
You must add up the years you have contributed to the SSS to determine your credited years of service.
This information is also available in your SSS contribution record.
- Factor in Your Retirement Age:
For SSS members, 60 is the standard retirement age.
However, you could choose to retire at age 65, which would result in a higher pension.
- Consider Your Dependents:
If you have dependents such as a spouse or children, you may be eligible for additional benefits.
Your dependents may receive a lump sum benefit equivalent to 60 months of your pension or a monthly pension equal to 10% of your pension.
Who Qualifies for SSS Retirement?
When an SSS member reaches the age of retirement, they are eligible to receive a cash benefit known as a pension.
To qualify for retirement benefits, an SSS member must meet the following requirements:
- Optional Retirement:
The member must be at least 60 years old, no longer employed, self-employed, an OFW, or a housekeeper. - Technical Retirement:
The member must be at least 65 years old, whether employed, self-employed, working as an OFW, or working as a housekeeper. - Contributions:
The member should have at least 120 total contributions before the retirement semester to be eligible for the benefits. - Total Disability Pensioner:
Members who are at least 60 years old (or at least 55 years old for underground mine workers) may also qualify.
For members with fewer than 120 monthly contributions, they may receive a lump sum equal to their total contributions.
To qualify for the monthly pension, they can make additional contributions to complete the minimum 120 months requirement.
How Much Is the SSS Retirement Benefit?
The SSS retirement benefit is calculated based on member contributions and retirement age.
A member’s monthly SSS pension can be calculated online or manually using the SSS website.
SSS Pension Calculation
An SSS monthly pension is primarily determined by three factors:
- Contributions Made
- Number of Credited Years of Service (CYS)
- Number of Dependent Children
SSS uses three formulas to calculate pensions.
The formula that provides the highest yield generally applies.
Based on Creditable Years of Service (CYS):
If the CYS is between 10 to 20 years, the member is entitled to Php 1,200.
If the CYS is 20 years or more, the member is entitled to Php 2,400 plus Php 1,000.
If more than ten years: 20% of the average monthly salary credit (AMSC) plus Php 300, and Php 1,000 plus 2% of the AMSC for every credited year of service over ten years.
The average AMSC: Php 1,000 plus 40% of the average AMSC.
Note the following in the computation:
- AMSC is the average monthly salary credit in the last 60 months before retirement or disability.
- CYS counts the number of years you have contributed to SSS, with a maximum of 10 years.
- The pension percentage is based on a multiplier table that factors in your age and CYS.
Sample SSS Monthly Pension Calculation
Using the second SSS pension formula (highest yield), here is a simplified calculation:
Assume a senior citizen has the following:
- Php 50,000 salary
- SSS contributions for 15 years
- AMSC of Php 25,000
Here is how the SSS pension cash benefit will be calculated:
Monthly Pension = 300 + (20% of AMSC) + [2% of AMSC x 30 years (40 years – 10)] + ₱1,000
= 300 + (0.20 x 25,000) + (0.02 x 25,000 x 30) + ₱1,000
= 300 + ₱5,000 + ₱15,000 + ₱1,000
SSS Pension monthly = Php 21,300
You can also estimate your monthly pension using the SSS pension calculator available on their website.
Additional Benefits of SSS Retirement
Aside from the monthly cash benefit, qualified members of the SSS retirement pension are also eligible for the following benefits:
- Automatic PhilHealth Registration:
Retired members who are not currently PhilHealth members will be automatically registered and have access to its benefits. - 13th Month Pay:
Retired members who made at least one contribution during the calendar year are eligible for a 13th-month pay equivalent to one-twelfth of their annual retirement income. - Funeral Benefits:
The primary beneficiaries or closest living relatives will receive a one-time cash reward equal to the members-only pension times the number of years of service.
Video: How to Compute SSS Retirement Benefit | Pension Calculator
In this video, viewers will learn how to calculate their SSS pension using the SSS Pension Calculator for retirement years. One of the benefits available to SSS members is the Retirement benefit, commonly known as a pension. Watch the video to gain insight into estimating your potential SSS pension amount.
Conclusion
Understanding how to calculate and maximize your SSS retirement benefit is essential for a secure and comfortable retirement.
By familiarizing yourself with the factors that affect your pension and the steps involved in the calculation, you can plan effectively and make informed decisions.
Regularly check your SSS contributions and consult with the SSS to stay on track for receiving the benefits you deserve.
Whether you retire at 60 or 65, being informed will help you make the most of your golden years.