Looking for the latest phones to get or gift this holiday season?
Planning for Retirement: How to Use the SSS Pension Calculator
You may have imagined life after 60 as living near the beach or exploring new places. Take a step toward your dream retirement by planning with the SSS pension calculator. It estimates your potential monthly retirement income, giving you a clearer picture of your financial future.
Using the SSS Pension Calculator
Registering with the Social Security System (SSS) can provide a path to comfortable retirement through regular contributions.
- Check the Social Security System website and scroll down the homepage to locate the SSS pension calculator.
- Input your age and monthly salary by selecting from the dropdown menu for the compensation range.
- Click “Calculate” to get your estimated monthly pension when you retire at 60.
This will show you the estimated contributions paid and the total pension after 10 and 20 years. If you click the button for more detailed information, you'll see the factors SSS considers when calculating pension.
How SSS Calculates Your Pension
Whichever you end up using, these SSS pension calculators assume the following factors to come up with their estimates:
- You’ve made at least 120 monthly SSS contributions.
- Your average monthly salary remains the same for the credited years of service.
- There’s no gap from the first time you contributed.
While the calculators can be helpful, they don’t consider salary adjustments or job changes that may result in months without SSS contributions. Fortunately, the government agency provides formulas to compute for these situations.
Why You Need Your AMSC
Refer to the SSS contribution table to check the corresponding monthly salary credit of your compensation.
Before you get to the formulas, you need the latest SSS contribution table and your average monthly salary credit (AMSC) to calculate your estimated monthly pension.
AMSC is the average of your monthly salary credit (MSC) over the last 60 months (five years). This figure is crucial in determining your SSS pension.
To calculate your AMSC:
- Find your MSC. Refer to the contribution table. Locate the “Range of compensation” (on the left side) that matches your salary. The “Total” MSC (a column to the right and highlighted in blue) is the number you need.
- Add up the MSCs. Total your MSCs for the past 60 months.
- Divide by 60. Divide the total MSC by 60 to get your AMSC.
When your MSC is the same throughout 60 months:
Say your monthly compensation falls under the ₱19,750- ₱20,249.99 bracket, your total MSC is ₱20,000. If you have the same MSC throughout 60 months, your AMSC is also ₱20,000.
(₱20,000 x 60) / 60 = ₱20,000 AMSC
When your MSC changes within the 60 months:
If your MSCs differ due to salary changes, multiply them by their covered months. For example, your MSC was ₱20,000 for 30 months and ₱21,500 for the next 30 months. Here's your AMSC:
(20,000 x 30) + (21,500 x 30) / 60 = ₱20,750 AMSC
Once you know your AMSC, you can calculate your SSS pension.
How to Calculate Your SSS Pension Manually
Performing a manual SSS pension computation may become necessary if you have contribution gaps.
SSS uses three formulas to estimate your pension, depending on your circumstances. Two formulas need your AMSC, so if you still need to calculate it, use the steps above. All pensioners are also entitled to an additional ₱1,000 benefit allowance.
SSS Pension Formula 1:
While this is the most straightforward formula, it typically applies to SSS members who’ve stopped paying after 10 years. SSS pension formula 1 estimates monthly pension as 40% of the AMSC plus the benefit allowance of ₱1,000.
Assuming your AMSC is ₱20,750, your monthly retirement income comes to:
₱20,750 x .4 + ₱1,000 = ₱9,300
SSS Pension Formula 2:
The second formula calculates your monthly pension using your credited years of service (CYS) and the minimum guaranteed pension.
- Your monthly pension is ₱1,200 if your CYS is between 10 and 20 years.
- Your monthly pension is ₱3,400 (₱2,400 + ₱1,000) if your CYS is 20 years or more.
SSS Pension Formula 3:
SSS commonly applies the third formula to members with high ASMC who've been paying for 20 years or more.
Suppose your AMSC was ₱20,750, and you paid SSS contributions for 40 years (your CYS). Here's your estimated monthly pension.
SSS formula: ₱300 + (20% of AMSC) + (2% of AMSC x [CYS - 10]) + ₱1,000
= ₱300 + (0.20 X ₱20,750) + (0.02 x ₱20,750 x [40 - 10]) + ₱1,000
= ₱300 + ₱4,150 + ₱12,450 + ₱1,000
= ₱17,900
Understanding the formulas is handy, especially if you have contribution gaps. But you can also spare yourself the Math and visit your nearest SSS branch for personalized calculations based on your membership history.
Taking Charge of Your Retirement
Knowing your SSS pension can help you plan how to supplement your retirement income further to build financial security.
It's never too early to start planning for your retirement, even if it's still three decades away. But the task is easier said than done. Luckily, the SSS pension calculator can help. In just under a minute, you can determine whether your SSS can support your retirement aspirations.
This exercise is even more worthwhile if the SSS calculations don't meet your expectations. It serves as a wake-up call, encouraging you to improve your saving, budgeting, and investment efforts to improve your financial literacy and achieve your retirement goals.
