OFW… Do you have a RETIREMENT plan?
May 25, 2011 6 Comments
Many OFW’s after working many years abroad was not prepared for their retirement.
Most of the time we’ve heard a sad story of OFW that works for more than 20 years abroad but, end up with nothing after they returned home.
Since, we are getting a higher compensation abroad.. the habit of saving was never become a part of our plan. Sometimes, we think that our high salaries abroad are perpetual and we must enjoy the luxuries it can offer.
The truth about our financial status will only realized after the time that we are near our retirement age, and our retirement purse is empty or only half-full.
This is the most tragic moment for a Filipino working abroad.
I think that 2 reasons why most OFW’s ended broke is they lack financial literacy and discipline.
Financial Literacy
I will agree that most OFW lacks financial literacy. Most Filipino’s working abroad only knows a bank savings account as their primary investment. Most don’t know other investment vehicles such as mutual fund or unit investment trust fund.
Last month, I attended a Financial planning seminar in Bangkok, Thailand. It was conducted by Marketing Group in the Philippines selling insurance, health care, real estate and investment products. When the Speaker from an asset management company talks about the mutual fund, most of the attendee was in total lost.. Some of them are thinking that mutual fund is like insurance and others were thinking of directly participating in the stock market trading when they go into the mutual fund investing.
Also, most OFW thinks that their SSS pension (in case that they are continuously paying their SSS contribution while they are working abroad) will be enough for their retirement.
Let me give you a living example about the SSS pension, my Father after working and contributing almost 40 years in SSS only get 4000php monthly pensioned… Imagined what you will buy from your 4000php monthly pensioned, I guess this amount is only good for your utility bills like electricity and water. Anyway, my father was so lucky to have a handsome and loving son like me to help him….
Anyway, it’s better to have SSS pensioned than nothing. I am not against the SSS however, we can explore other opportunities to earn more.
Discipline
The habit of saving was never a part of the plan. Most OFW thinks that our stream of income abroad is endless and luxuries must be enjoyed.
We never do a financial health check-up to assess our financial status.
There were some stories of OFW although already 65 years of age were forced to work because of his huge debt. “I just heard this story when I was attending a seminar from 1 of the asset management company in the Phillippines.”
Do you want to end up like this?
So start planning for your retirement now.. You can ask for a financial planner, if you are not keen on the different investment instruments..
For me, I plan to retire at the age of 50 (hopefully)…
I hope my investment will be enough when this time comes.
About "The Overseas Pinoy Investor"
"The Overseas Pinoy Investor"
Hi,
Good day, as I browsed the net searching which company I could avail a pension or retirement plan I camed accrosed your site and found quite interesting, indeed. Very well said about the financial stability of an OFW, I currently working abroad and me myself is lost on how to start my financial planning. Truly SSS alone is not enough to settle during retirement time. Just wanna ask from you which company should I go for a pension plan?
Hope to hear from you soon.
its me,
Med.
medulla_1980@yahoo.com
Hi Med,
Thanks for dropping by in my blog.
There are lots of Insurance Company that offers retirement plan. You could check with their sites and call their agents for more details. (You can go to my blog post titled : http://overseaspinoyinvestor.com/2011/06/17/list-of-life-insurance-companies-in-the-philippines-2011/ )
If you want my opinion about which company should you go for a retirement plan, my best choice is PHILAM (Philam Life’s Leisure). Anyway, I am not an employee of this insurance company but it just happens that I have a life insurance policy from PHILAM, and I am happy and satisfied with their service.
Keep in mind that your age will play a big role and will determined the amount of premium you need to pay. Of course if you are still young you will be paying less.
Anyway, aside from getting a pension plan, there are other ways to plan for your retirement. You can invest on a Mutual Fund or UITF (Unit Investment Trust Fund).
Actually for a minimum amount of 5000php you can start investing on Mutual Fund and you can put a minimum additional investment for only 1000php. You can also go for UITF investment but this requires higher initial investment.
The small amount that you regularly put in this investment fund will sustain your day to day expenses once your retirement day comes.
- Overseas Pinoy Investor
Can I have your personal email? All your point of view is very interesting and I think I want to know more about your insight. I also want to discuss some ideas and opportunities with you.
Hi Jo,
My email add is overseaspinoyinvestor@yahoo.com
Another method of providing for retirement is to buy property. You have the property as an asset, the rental as an income and you can hand the asset on to family. Overseas many people build up a large portfolio of rental properties. However I am not sure in the Philippines that the Financial Regulations allow people to borrow & recycle deposits, as they do in Europe. Your average OFW should not comit everything into one area, a spread of investments is better. A little cash savings, some equities and some property. Specialising in one asset field is very much gambling, so unless you really have the knowledge, think carefully.
Why am I on this site, well I have complex of 5 brand new 2 bed houses, I would like to sell for 12.5 Mill to a person or group who would like to invest to generate an income. So I am looking for ways which I can contact investors. OFW represent an ideal group of people for this type of investment.
As indicated in previous articles OFW’s often work for many years and end up with nothing for themselves. It is important to develop a savings culture, no matter how small it is a good discipline.
When looking for an investment be careful not to be swayed too much by the Financial Salesmen, they make a good living from the commission they earn. That commission comes out of your investment.
I first spoke of investment in property as one of the ways for providing for retirement. One very important thing with property is location, consider that carefully. If you are going to rent it out, will there be a demand in that area for the type of property you have. Wealthy people you need a good class property. Lots of transient workers from the Provinces, you need something econmical. I can not cover everything but I think you get the idea.
The ability to manage it yourself, so it has to be within travelling distance, even if you have a Caretaker, you need to be able to actively manage the properties. Location.
It needs to have access to all the usual facilities, but provide a little tranquility for the tenants if possible. so location.
And of course location matters if you ever had to sell the property. Good location, good interest & competition helps you get a good price. If anyone is interested in my properties in Bicutan, then of course I would be willing to chat.
Even if you are not interested in my properties, you should consider putting some property into your retirement planning.
Start early and you would be surprised how a little grows over the years and it averages out the bad times with the good times for investment.
This post is very helpful not only to OFWs’ but to all Filipinos as well. Saving for our future retirement, investing in mutual/UIT funds, real estate and business are the “MUST DO” for us. As some financial authors say, we must invest in assets that generate a passive income more than our expenses. That is one GOAL that OFWs’ and Filipinos should have so that we can have the Financial Independence to achieve the MOST IMPORTANT ASPIRATION which is to be with our love ones.
However, now that we know the OBJECTIVE, the first question will be “How do I start?” . .. Well in my opinion, looking for a MENTOR would be the start. What I mean by MENTOR is, GOD. HE always find ways, guides and gives us the the things that we really deserve in the right time.
Thank you Mr. Overseas Pinoy investor for the advise for us fellow OFWs’. I hope we can share more insights and ideas on how and where to invest our hard earned money.