Published: April 25, 2018 | Updated: October 28, 2020 | Posted by: Venus Zoleta | Government Services
The road leading to your retirement will be smooth if you plan ahead. Starting your retirement planning already? You’re on the right track. One of the things you need to plan for is the SSS pension. It’s never too early to think about the optimal time to file for retirement and claim your pension.
Why bother planning the best time to claim SSS pension? With proper timing, you can get the most of your Social Security System (SSS) retirement benefit.
But first, you need to know when you’re qualified to file for retirement with SSS and how the monthly pensions are computed.
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Are you a 30-something who wants to retire by 40? You can retire at any age you want. But to claim your SSS pension, you’ll have to wait for 21 to 30 years, depending on your current age.
SSS provides monthly pension only to members who paid at least 120 monthly SSS contributions before the semester of retirement and meet one of the following criteria:
If you’ve paid less than 120 monthly contributions when you retire, you can still receive your payment equal to your total SSS contributions (both employee and employer share) plus interest.
SSS uses a complicated method to compute how much pension a retiree should get. For the detailed SSS pension formula and sample computation, read this article.
If SSS’ retirement benefit computation is too much to comprehend, there’s an easier way to make sense of it. SSS takes two things into account when computing monthly pension: the member’s average monthly salary credit and the credited years of service.
This means the higher your average salary bracket and the longer your employment period, the higher your total number of SSS contributions, which leads to a higher monthly pension.
Now that you know the qualifications and computation for the retirement benefit, come up with a smart plan on when to claim your SSS pension.
When is the best time to claim your SSS pension: when you’re 60 or 65 (or older)? Doing so at age 65 or older is better because you can increase your contributions before your retirement for a higher pension.
On the other hand, filing for the SSS retirement benefit sooner also has its advantage. Qualified dependents will receive 10% of the retiree’s pension. In case of the pensioner’s death, the primary dependents will get 100% monthly pension.
When you apply for the retirement benefit, SSS will notify you of the amount you’ll receive in monthly pension. You’ll also be informed how much you’ll get if you opt to keep on paying your SSS contributions as a voluntary member. Coordinate with your nearest SSS office to discuss possible options that will yield the maximum SSS pension for you.
Don’t rely only on SSS to fund your retirement years, though. Chances are your monthly pension won’t be enough for your living expenses. Or worse, the SSS’ fund life won’t outlive your retirement. Consider alternatives to the SSS pension such as investing in stocks and real estate to build your retirement fund.