Should you rely on your retirement contribution alone?

Your contribution to your retirement is not enough.

Should you rely on your retirement contribution alone?
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Your monthly contribution for your future pension is one good way to prepare for your retirement but it’s not enough. Even when planning for your retirement, it is important to predict possible scenarios that might happen to you.

Monthly Pension in the Future Calculated
Let's try to picture this scenario: Assuming your pension was at 2 million pesos from your contribution. Let's say you retired at the age of 60 and the estimated distribution of the fund will cover 20 years since the age of retirement.

So 2,000,000.00/20 years= 100,000.00 annually or 8,333.33 monthly. You now enjoy the benefits of receiving 8k per month for 20 years. In other words, your pension will all be consumed at the age of 80.

Assuming a Life Living up to 100 Years Old

But supposing you were not yet called to leave earth and you will have to live up to additional 10 or 20 years? Where will you get money to sustain your needs for life survival?
If you also think of the benefits you’ll receive from age 61-80 is a big help, just think of the inflation rate or the increase of prices of goods and commodities within these years. Think of the goods and commodities that can cover your 8,000.00 monthly pension. Remember that the price of product now is different from its price five years ago.

Even think of the cost of your medicines.

We know the fact that reaching old age is also reaching the age of physical and mental deterioration. By looking at the time you retire, do you think the price of medicines will be the same as now?
How will you address such problem? Will you work at the age of 81 and up (at that very old age?)? Will you be dependent to your child/children who have their own families to feed?

The Answer is Insurance

To prevent such future scenario, I recommend my clients to try applying for a variable unit-linked life insurance. In this way, you'll not only be insured but also your premiums will be used as investment. Many insurance companies also provide insurability period of up to 100 years old so in case your pension is not enough, let your life insurance cover more. Approach a financial consultant for this. Ask and you will never have regrets for your financing needs in the future. 

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Absolutely not, Prepare yourself to be able to care for yourself in the event you have too. There is no government that supports the elderly enough to be comfortable. Make sure you have a retirement you can live off of and use what is given to you as savings or supplement your retirement.


If one's service is not pensionable , it is prudent to invest part of earning wisely in sectors where returns are m at least more than inflation.Fixed deposits, insurance , non contributory provident funds etc dont offer decent returns. One should invest in basket of options- real estate, equity oriented mutual funds, some blue chips scrips, pension schemes etc. Lst but least one should keep working till end. Dont retire but Re-tyre for re-run in life.


Yes, if an insurance company offer products that are traditional depending on the policy of the company-usually fixed return, is not more than the inflation rate. However, times are changing and so with insurance companies innovating their own products called variable unit-linked insurance. This is one unique feature of a modern insurance offering not only protection and death benefits but at the same time, the premiums being paid are used for investments (Usually Unit-investment Trust Fund and Mutual Fund). We tell our clients the interest or the fund value is NOT really guaranteed but inflation rate in our country is fluctuating everyday so in case the investment cannot beat the inflation rate today, there will be times when interest will be doubled or tripled from the inflation rate. It is important to note that investing our money to any kind of instrument has its own risks, especially when the amount you want to invest is huge. Thank you for your comment. :)


You're so right. We cannot depend entirely on the compulsory contributions that we make to our pension. We need to start saving and investing while we are young and still working. We cannot depend on our children either. However, I do not trust insurance companies. That is why it's best to have an investment portfolio while you're still young.


I understand madam if you cannot trust insurance companies. What is more important is that at least, you know that putting your savings in an investment portfolio would help you a lot in your own finances and for your family. May I know the reason why you cannot trust insurance companies? You may e-mail me at This is one way to improve my service as a financial consultant and to educate people about the misconceptions of insurance companies.