Do These Things Early to Retire with Ease

If you think you only need to pay your Social Security contributions every month to have a good retirement, let me stop you there. As according to a study in 2019, the Philippines has one of the worst pension systems for retirees in the world.

The Melbourne Mercer Global Pension Index (MMGPI) 2019 placed the Philippines at the fourth-lowest rank at 34th out of 37 countries, rating the country’s retirement income protocol at 43.7 out of 100.

The local system was rated “D” that was defined as one having some desirable features, but comes with “major weaknesses” that have to be addressed.

This marks the first time the Philippines was included in the index. MMGPI’s evaluation is based on the operations of the Social Security System (SSS), the agency that is tasked to manage retirement and other benefits of the private sector workers and the self-employed.

In all fairness to the Philippines, only two retirement systems were rated “A,” which are the Netherlands, having a score of 81, and Denmark at 80.3.

Preparing early for retirement

With the Philippines being one of the lowest-ranked countries in the index at the moment, the need to be prepared for retirement in advance will be key.

Start to amass savings early
Following the 50/30/20 method in which 50% of your income is committed to essentials, 30% on wants, and 20% to savings. This way, you may still enjoy wants, have proper allocation for your essentials, all while being able to save money for whatever purpose it may serve, for the sake of this article, retirement.

Invest, invest, invest
Committing a portion of your savings to investing will help you gain a jump-start to financial freedom, if done wisely. Study on what you want to invest in. You might want to invest for a business idea, or you can invest on the stock market, or invest on property that you will be able to sell for a profit in the future.

Look for other options
SSS contributions are not the only way to have retirement benefits, as there are other ways to plan for retirement. Other providers offer a comprehensive retirement plan that compensates you better what the standard social security system benefits offer. Financial planning is becoming a trend now that people are realizing the importance of finances due to the pandemic. Start consulting with financial advisors on how retirement planning works and to connect you with someone who works on such.

Being ready for anything ahead of time is always important, as we live in a time full of uncertainties. Retirement may be far off, it’s better to know your options and prepare ahead at an early age. (GFB)