Reasons why not to retire in the Philippines.

How do you picture your life 30 to 40 years from now? See you leaving your work and living life for yourself? Or maybe, because retirement belongs to a distant future, and you have other goals right now, you haven’t given it much thought yet. So, take a moment now and think about, the biggest reasons why not to retire in the Philippines.

Sorry to burst your bubble, but it won’t be as easy as it sounds like living out your old age. Compared to our Asian neighbors, retirement in the Philippines is currently a grim prospect.

90% or 9 in 10 Filipino employees said they were concerned about wiping out their savings, being in poor health, and having no one to care for them when they retire, according to a 2015 East Asia retirement survey.

Here are Filipino retirees’ common problems plus some advice to avoid being trapped in such desperate situations.

1. Don’t retiree in the Philippines if you don’t have savings.

Are you saving enough for your retirement in the Philippines? Most young urban Filipinos don’t.

Millennials are very optimistic about their retirement, but the discipline to plan for it is lacking. Just 7% said they had monthly savings in a recent investor sentiment survey, and 28% said they had invested money whenever it was convenient.

TIPS ON HOW TO AVOID UNDERFUNDING.

• Develop a diversified portfolio of assets that are low risk and high risk. Investing in real estate will produce retirement income in the long term. In particular, a condo investment in a prime location will give a rental unit daily cashflow income. To develop your retirement portfolio, stocks and mutual funds are also perfect investment vehicles.
• Go easy on the YOLO lifestyle (you only live once). Do not spend a lot with friends on travel, appliances, fashion, and evening out. In your 20s or 30s, nothing is wrong with loving your life, but you need to strike a balance between living in the moment and living for the future. You will be praised for it by your future selves.

PENSIONS DON’T GUARANTEE FINANCIAL SECURITY

Think again if you think pensions will prevent you from being bankrupt in your old age. This by itself is a big reason why not to retire in the Philippines if you are underfunded.

Today, many senior citizens are not entitled to government-mandated pension payments regardless of their low wages. They do not participate in either the Social Security System (SSS) or the Government Social Insurance System (GSIS).

Not so lucky are pensioners, either. Monthly SSS pensions vary from Php 1,200 (USD 24) to a little over Php 10,000 (USD 200) as of this writing. While Php 3,600 (USD 72) is the average, most retirees receive much less than that. To cover one’s monthly living costs, even the highest pension in the range is not enough.

Tips on how to avoid going broke.

• Treat your SSS or GSIS pension only as an additional income after you retire and not your primary source of income, another reason why not to retire in the Philippines.
• Find other retirement income streams, such as the Personal Equity Retirement Plan (PERA). This voluntary savings and investment account helps you to save up to 100,000 Php (USD 2,000,) or 200,000 Php for OFWs, (USD 4,000) per year and, when you reach 55, withdraw your savings. You will accumulate about 30 years’ worth of protection if you start saving in your 20s.

HEALTH ISSUES AND EXPENSIVE HEALTH CARE COSTS ARE REASONS WHY NOT TO RETIRE IN TEH PHILIPPINES.

As you age, your health will inevitably deteriorate, hurting your ability to raise cash during your retirement. It doesn’t help that health care rates continue to increase in the Philippines.

While senior citizens receive benefits such as the mandatory coverage of PhilHealth and a 20 percent prescription discount, these are very limited in scope. Unfortunately, this leads to yet another reason why not to retire in the Philippines.

Even if they are discounted, many elderly Filipinos can’t afford costly drugs. PhilHealth’s advantages often cover only the cost of hospitalization and are not really useful for outpatient care.

TIPS ON HOW TO AVOID COSTLY MEDICAL BILLS

• Update and make sure your life insurance package is covered with acute disease and disability coverage. No matter how much you’ve saved for your retirement, it can quickly be drained by costly medical bills if you’re not insured. Even, you can use your policies to cover your retirement income.
• Stop or at least reduce any harmful activities that can take a toll on your health as you grow older, such as smoking and drinking alcohol.

RELYING ON RELATIVES FOR FINANCIAL SUPPORT

If your children are competent and eager to take care of you in your retirement years, this may not be an issue. But what if they’ve got to help their own children? Could you tolerate them being a burden?

More than 70 percent of elderly Filipinos live with their children, and 40 percent rely on them for financial support, a recent retirement survey found, which are more reasons why not to retire in the Philippines.

In the Philippines, where “utang na loob” is a family tradition, (“Utang na loob is a Filipino cultural trait which, when translated literally, means “a debt of one’s inner self.” It is also often translated as a “debt of gratitude”)  kids sometimes become the savings or retirement plans of their parents.

TIPS ON HOW TO AVOID FAMILY POACHING.

• Take your preparation seriously for retirement. Ensure you have ample income-earning ways to support you in your retirement so that you don’t have to rely on your kids.
• Teach your children the importance of saving money at a young age and train them to become financially independent so that when they’re old enough to live on their own, they won’t have to rely on you for financial assistance.

All in all, when you consider moving to the Philippines and living there for the rest of your life, you need to make sure you’re making the best choice you can. These choices may include the simple option: what color should the walls be and whether we have long or short grass in the front yard. 

The more significant questions about reasons why not to retire in the Philippines are the negative questions that keep coming up in your heart and mind. You need to focus on address these questions and develop personal answers for yourself. You don’t want to find that you’ve sold your belongings, sold your house, moved to the other side of the world, and then discover that you’re not enjoying life. 

Retiring and moving is a huge deal. You should spend 2 to 3 months in the ideal city of your choice to make sure that you enjoy the surroundings. So please use caution, listen to your heart, and make sure that you’re making the best decision for yourself and your family around you.

Philippines influence hopes you enjoy this article. 

We look forward to hearing about your experience in your comments below.

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