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Retirement Planning for Filipinos & Expats in the Philippines

A couple planning for their retirement

Currently, the range of services and products for upwardly mobile Filipinos and Expats living in the Philippines is limited compared to other more developed markets. While the Philippine economy has and continues to experience strong growth when compared to other countries, the state of its financial sector has not managed to keep pace with this growth and development.

If you are working in the Philippines, one of the standard arrangements which are used to help employees prepare for retirement is the "Social Security System". SSS can provide basic benefits to both Filipinos and Expats who contribute during their working life.

There is another similar system for government employees called GSIS which is like the SSS and provides similar benefits for government employees. While both of these schemes make good starting points for both Filipinos and Expats working in the Philippines it is not going to provide you with the retirement fund you would need to enjoy a similar income as you would have received during your working life.

Advantages of the SSS & GSIS:

  • A good starting point for planning your retirement.

  • Is backed up by the government making it secure and reliable.

  • Will come out of your salary monthly making it easy to pay into.

Disadvantages of the SSS & GSIS:

Some private companies in the Philippines offer pension plans to their employees as part of their employee benefits package. These pension plans are typically funded by the employer, and employees may also contribute to them. The specific details and eligibility criteria for private company pensions can vary widely among different employers.

As for expatriates, it is essential for them to check with their employer or the company's HR department to understand the details of the pension plan being offered, including vesting periods, contribution amounts, and retirement benefits.

If you are lucky some companies now will offer these company-sponsored pension schemes for certain staff. They may also provide stock options enabling you to participate in the growth of the company. These options are however currently limited in the Philippines and not applicable to most Filipinos and Expats.

Advantages of Company Pension Schemes:

  • Provide an opportunity to boost your retirement income.

  • The company may also contribute, and the employee may also be allowed to ‘top up’ contributions.

Disadvantages of Company Pension Schemes:

Retirement Planning Options for OFWs

The government in the Philippines allows OFWs to pay into the SSS back home and this is something that every Filipino overseas worker may want to consider based on their individual retirement goals and plans.

Filipinos are well known and liked all over the world for the way they contribute to the economies where they live and work. Sadly, not all countries provide good retirement benefits for OFWs especially those working on short-term contracts. Countries in Europe the US and the UK are likely to provide greater retirement benefits for example, than countries in the Middle East and Far East.

With countries all over the world falling into debt, the provision of retirement benefits packages for both expats and local people will take a back seat. This means that more and more OFWs will need to plan their own retirement benefits packages by investing in various assets and International Products which will fill this gap.

How to Plan for a Financially Secure Retirement in the Philippines

The below options can be applied to Filipinos living and working in the Philippines as well as OFWs and Expats in the Philippines.

The reality is that every situation is different and the additional measures which we can take to provide for our retirement are varied and will depend on many factors.

Property Investments

Property in the Philippines as with most countries has always been a popular way to build up wealth. Property can provide both a capital gain as the value increases plus also a rental income which can boost retirement income.

Advantages of Property Investment

  • Property has traditionally been seen as a safe investment with the value generally increasing over time and providing a rental income or for personal use.

  • Property tends to be lower risk than other assets like funds or stocks.

  • Property can be sold in later life to fund buying other property or to provide cash for retirement purposes.

Disadvantages of Property Investment

International Retirement Plans

As more and more people choose to work abroad so is the demand for International Retirement Plans grows. With the advent of technology, these plans are now accessible to nearly all Expats with often lower costs than similar ‘home-based products’, and contributions can start for as little as $150 per month.

The reality is that as these plans are offered by large specialist international providers, they are specifically tailored to the needs of the international expatriate. In most circumstances, they will therefore be far better value for money and appropriate to the needs of the OFW or International worker as opposed to schemes organized and backed up by governments in one’s home country.

Advantages of International Plans

  • Can be tailored to the needs of each individual client.

  • They are flexible in the sense that premiums can be easily adjusted up or down.

  • Enable clients to agree on a plan that helps them achieve their investment objective.

  • Superior investment choice and flexibility compared to government schemes.

  • These plans allow clients to contribute in different currencies and they are fully portable between different countries.

Disadvantages of International Plans

It is important you use a trusted and experienced advisor to make sure your plan fits in with your objectives and requirements.



Target Retirement fund of ₱10,000,000 at the age of 60

A table showing the account value until the age 60 of an International Savings Plan

A table showing the account value until age 60 for a traditional savings bank

A table showing the number of years your savings will last in a traditional savings bank versus international savings

* Please note that the above tables are for illustrative purposes only and may not reflect final calculations. Actual contributions and rate of returns may vary based on a variety of factors such as market conditions, individual investment decisions, and charges, fees, or bonuses imposed by the chosen provider. The account is in USD, and your bank may incur conversion fees that AAPOC is not responsible for.

** The information provided by the withdrawal table is for illustrative purposes only and is not intended to purport actual user-defined parameters. The figures shown are hypothetical and may not be applicable to your individual situation.

***Information is provided only as an example and is not a recommendation to pursue a particular strategy.

In the charts above we have illustrated the potential benefits of international savings plans to investors of different age groups. The illustrations are designed to show how much clients of differing ages would need to save to achieve a retirement goal in the Philippines. We can see that saving early allows you to contribute smaller amounts each month compared to starting later. This can make it more manageable to save consistently without straining your budget.

When comparing saving in a typical bank vs saving in an international savings plan, the latter requires fewer monthly savings. If you are currently 35, you will need to save a total of ₱8,811,600 in a traditional bank to reach ₱10,000,000 by 60, but only ₱4,556,700 in an international savings plan. This means that you are saving almost 50% less in an international savings plan than you would in a typical bank to reach your goals.

Also, if you reach the age of 60 and decide to withdraw ₱800,000 per year, your funds in an international savings plan will last longer than those in a typical bank. Savings in a traditional bank will last only for 14.4 years if you withdraw ₱800,000 per year, but 22.6 years in an international savings account. This means savings in an international savings plan last 8.2 years longer than savings in a traditional bank in this situation. This is because a higher interest rate means you'll earn a higher return on your savings, allowing you to withdraw a lesser percentage of your principal each time. A lower interest rate of 1%, on the other hand, will yield less interest, requiring you to withdraw a larger percentage of your principal to satisfy your financial demands. As a result, your funds will deplete more rapidly.

Furthermore, the additional interest you would earn in an international savings plan is ₱7,374,080.96 compared to ₱626,958.94in a traditional bank savings account. This means that the additional interest you would get in an international savings plan is ₱6,747,122.02 more than in a typical bank.

These quotes can be amended to suit the different requirements you may have, and these plans can be adapted at any time. For those looking to prepare themselves for a secure and prosperous retirement international savings plans should be a cornerstone of your financial planning.

These plans offer flexibility, access to a diversified range of assets not usually found in local products, online access, tax-free growth, and benefits at retirement. Ultimately as the client you also have control of when and where you can take the benefits and if anything is left benefits can be handed down to whoever you choose in a cost-effective and tax-free way.

In a fast-moving and changing world, international savings plans help give you control of your finances and your retirement at a minimal cost and are easy to manage. At AA POC, we have access to a wide range of plans to meet the needs of even the most discerning clients.


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