Following through to boost retirement savings

THE Social Security System (SSS) recently launched the MySSS Pension Booster Program to encourage more members to save for retirement. This is a welcome development. Not only is it a timely move, but also much needed considering that 9 of 10 Filipino workers are worried that they will not have enough financial resources to support their desired lifestyle in retirement. The lack of savings is the primary reason for their pessimistic view of the future. However, the program projects a much higher interest rate than what is normally offered by regular savings accounts and the level also handily beats inflation. With an envisioned annual interest rate of 7.2 percent, there is great hope that more members will be motivated to save.

Let us assume that a 30-year-old employee decides to join this program to supplement his regular contribution to SSS. He saves an additional P2,000 monthly until he retires at age 60. After 30 years, his fund under the voluntary MySSS Pension Booster Program would have grown to about P2.5 million. On the other hand, if that same amount of P2,000 is instead deposited monthly in a regular savings account that pays no more than 2 percent interest per annum, his fund will only get to less than P1 million by age 60. Clearly, this new program can boost one's retirement fund.