8 Out of 10 are Not Saving Up for Retirement
A survey by The Filipino Times shows that 8 out of every 10 Filipinos in the UAE are not saving up for retirement, but experts say it is not too late to start securing the fund for that comfortable life after decades of work
Eight out of 10 Filipinos in the UAE are not saving up for retirement, according to the latest survey conducted by The Filipino Times at a time when retirees back home are clamoring for higher pensions from the government.
Their monthly income, the survey respondents said, mostly go to remittances, while others claim that they are simply just not earning enough to set aside a fund that would support them when they could no longer work.
“I am the bread-winner of the family. I have a brother and a sister in high school and my parents both just rely on their pension from SSS,” said Lou Mendoza, a sales executive in Abu Dhabi. “I know I have to save up because I am not going to work here forever, but with the current expenses that I have, I can’t manage to save up.”
The SSS controversy back home, with the government rejecting a bill that would increase the monthly pension by Php2,000, serves as a wake-up call to all. It is a sharp reminder that the government fund being deducted from employees’ monthly salaries is not enough to meet a retiree’s needs. For OFWs in the UAE, even SSS contributions are not popular as only 8,663 are paying members.
Financial management woes, however, are not confined to the Filipino population, as other surveys of a larger scale reflect how people shelve retirement plans.
Two out of every three expats admit that they are not saving enough for their retirement, according to a survey by the 999 magazine, the official publication of the Ministry of Interior.
‘Pay yourself first’
Primary financial obligations are often cited as the main reason why people cannot regularly tuck away a portion of their income for savings, but experts say if only they could stick to the golden rule in money management, they would be fine.
Every pay day, once an employee receives his or her salary, he pays all the bills, sends the monthly remittance home, and sets aside funds for day-to-day expenses. At the end of the month, once everything is accounted for, he saves all that is left—which, more often than not, amounts to nothing.
“Expenses never end. You always have to spend on something, so when your thinking is income minus expenses equal savings, you’ll end up saving nothing,” said Jenkins Halili, a senior financial advisor at Orient Insurance.
Contrary to the common practice, savings should first be deducted to the income and whatever is left would be the expenses. Given this formula, one would then have to just live within his/her means.
If such a scheme sounds too drastic, why not just include yourself in the list of bills that you pay? Think of your savings as part of your expenses. After all, when you save, “you pay yourself”.
“We understand that people have to support their families back home. But we all have to think of ourselves first. When the time comes that we cannot work anymore, who will take care of the bills that we have to pay? Who will take care of us?” Halili said. “We have to think about the future.”
‘Not earning enough?’
Halili also debunked the notion that one is not earning enough to save up.
“If you take someone with a salary of Dh3,000 and someone who earns Dh10,000, the latter could still end up without a single dirham in savings. It all depends on one’s spending habit,” she said. “It’s not about how much money you earn, but how much money you keep.”
Savings are tabbed in percentages anyway, one with a salary of Dh1,500 is not expected to have Dh1,000 in savings every month. Little by little, one can build his savings, it just takes discipline and the right mind-set.
“What we have also noticed with people is that when they get the chance to work overseas, their lifestyles change. And for the first few years, they don’t save at all. They are earning much more than they ever did so they tend to spend and enjoy,” Halili said, adding that this could eventually be corrected by setting goals and priorities.