Planning your retirement in the Philippines as an OFW

A retirement plan for an OFW is usually several layers of income. The SSS pension is the base. Pag-IBIG savings, MP2, PERA and the SSS Pension Booster can sit on top of it, and your own savings fill the rest. Each layer pays at a different time and under different rules.

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Layer 1: the SSS pension

Land-based OFWs are covered by SSS by law and pay the whole contribution themselves (RA 11199 Sec. 9-B). To get a monthly pension you need:

• 120 monthly contributions paid before the semester you retire, and
• age 60 and no longer working, or age 65 (RA 11199 Sec. 12-B).

With fewer than 120 contributions you get a lump sum instead, or you can keep paying as a voluntary member until you reach 120.

The monthly pension is the highest of three amounts (RA 11199 Sec. 12):

1. PHP 300 + 20% of your average monthly salary credit (AMSC) + 2% of your AMSC for each credited year of service beyond 10
2. 40% of your AMSC
3. PHP 1,000

The law also sets minimums of PHP 1,200 a month with at least 10 credited years and PHP 2,400 with at least 20 (Sec. 12(b)).

On top of that, SSS pays an extra PHP 1,000 a month to retirement pensioners. For the pension formula, the salary credit counts only up to PHP 20,000 (SSS Circular 2024-010). Contributions on a higher salary credit go to a separate Pension Booster account.

Worked example. An AMSC of PHP 20,000 and 20 credited years gives PHP 300 + PHP 4,000 + PHP 4,000 = PHP 8,300, plus the PHP 1,000, so PHP 9,300 a month. That is the formula amount before any across-the-board increase, which SSS announces separately. SSS Circular 2026-002 sets increases of 10% a year from 2025 to 2027 for people already receiving a retirement pension.

Work out your own with the SSS pension calculator, and read how the SSS pension works for the details.

How much you need

The SSS pension may cover only part of what you will spend. How much more you need depends on four things:

• What you will spend each month, which depends a lot on where you live and who lives with you.
• Where you live: living costs in Metro Manila and in a provincial town are far apart. Our guide to the cost of living in the Philippines shows the official figures.
• How many years your money must last: the earlier you stop work and the longer you live, the more you need. Pick a number of years that leaves room to spare.
• Inflation: prices rise every year, so the same life costs more by the time you retire. See inflation and your retirement savings.

The OFW retirement calculator puts these together. It shows the fund you would need at retirement in pesos and in the currency you earn, after your SSS pension, and what monthly saving would get you there.

Layers 2 to 4: savings that run alongside SSS

These are government-run or government-regulated ways to save. We describe how they work. We do not recommend one over another, and past results are not a promise of future ones.

Pag-IBIG MP2. A voluntary savings programme on top of your regular Pag-IBIG savings. Each MP2 account runs for 5 years, the minimum is PHP 500 per payment, and you can have more than one account. Dividends depend on the Fund’s income each year. The Pag-IBIG Fund’s past MP2 dividend rates were 6.00% for 2021, 7.03% for 2022, 7.05% for 2023, 7.10% for 2024 and 7.12% for 2025. Past rates do not predict future ones. See our MP2 guide.

PERA. A Personal Equity and Retirement Account is an account you open with an accredited administrator and invest in approved products. Contributions earn a 5% tax credit on up to PHP 400,000 a year for overseas Filipinos (PHP 200,000 for people working in the Philippines). You can put in more, but the excess earns no credit. Withdrawals are tax-free from age 55 if you have contributed for at least 5 years (RA 9505 Sec. 12). Early withdrawals carry a penalty, with some exceptions. See our PERA guide.

MySSS Pension Booster (voluntary). OFWs can pay extra into the voluntary scheme, from PHP 500 per payment, alongside the regular SSS contribution. SSS’s 2024 primer says the money is paid out at retirement as a pension, a lump sum or both, while other SSS documents describe a lump sum. Early withdrawal is limited. Ask SSS which applies to you. See our Pension Booster guide.

What “retirement plan” products are

If you searched for “retirement plan”, you may have expected a product. Products sold under that name in the Philippines fall into a few types: pre-need pension plans, endowment policies from life insurers, and investment-linked life insurance. They differ in what is guaranteed, the fees, how long the money is locked in and what happens if you stop paying. Our guide to saving and investing explains these types in general terms. We do not name or rank companies or products.

Plans by age

What to do first depends on how many working years you have left:

• In your 30s: you have time on your side. Getting SSS contributions steady and starting an emergency fund come first. See retirement planning at 30.
• In your 40s: the gap between what you have and what you need is clearer, and catching up means larger monthly amounts. See retirement planning at 40.
• In your 50s: the last ten years before 60 are about checking your SSS record, reaching 120 contributions and deciding when to stop. See retirement planning at 50.

The rules at retirement age

• Retirement age: there is no single age. SSS, private employers, PERA and senior citizen benefits each set their own. See retirement age in the Philippines, rule by rule.
• Retirement pay from a Philippine employer: RA 7641 sets a minimum for private-sector workers. See RA 7641 explained. Work out the minimum with the retirement pay calculator.
• Retiring early: the SSS pension and RA 7641 retirement pay both start at 60, so the years before that come from your own savings. See early retirement in the Philippines.

Protecting what you build

• An emergency fund keeps a lost job or a hospital bill from emptying your retirement savings. Work out yours with the emergency fund calculator.
• Inflation eats into savings that sit still. See inflation and your retirement savings.

Passing it on

• Estate tax: what heirs file and pay to the BIR before property can be transferred.
• Extrajudicial settlement of estate: how heirs divide an estate without going to court.
• A last will and testament: how a will is made in the Philippines.
• Donor’s tax: the tax on gifts made while you are alive.

Benefits for seniors, for you or your parents

• Senior citizen discount and benefits
• Senior citizen ID
• Social pension for indigent seniors
• Centenarian Act cash gifts
• Homes for the aged

Going home for good? Start with retiring in the Philippines after years abroad.