Best Posts in Thread: QUESTION: Philippines Retirement Pension for Filipino Wife

The trouble with state pensions is that politicians usually have a decision making horizon that reaches no further than the next elections.
I will take the Dutch history as an example because I am most familiar with it, but I know for a fact that in most developed countries public pension systems suffer the same type of problems.
Typically, state pensions are funded on a "pay as you go" basis, which means that tax/premium payers today do not "save" for their own pensions but pay for the pensions of current pensioners. This choice is made by politicians because starting a state pension system sounds much nicer if you can promise people who never paid a dime for it a full pension when they turn 65 anyway.
Thus my grandfather (born 1900) never knew he would get a free pension until the law was implemented in 1956, and had been saving/investing for his retirement for a long time, when suddenly a majority in parliament decided to implement a state pension for everyone over the age of 65. Hurray, double income for my grandfather after retirement (more votes for the politicians).
Sadly, pay as you go systems work well while the population in a country looks like a pyramid (many youngsters, few pensioners), but they cause substantial problems when a population stops growing or even shrinks (less people paying the pension premiums, more pensioners). Of course, politicians were warned by actuaries (insurance math scientists), economists and demographers. Amazingly demography (population studies) is pretty much an exact science, where long term predictions like "how many babies will be born 10 years from now", and "how many pensioners will there be 15 years from now" are very reliable.
But despite these warnings no measures were taken until it was too late for a smooth solution and there was no alternative but to hike up the age at which people can retire. So suddenly I and everyone else below 65 were told that instead of being able to retire at 65, we had to work another 2 years.
Luckily in the Philippines the population graph will continue to look like a pyramid for the next 20 years or so at least, so they still have time to avoid the mistakes of the developed world. Sadly I have the feeling that they will not (they're politicians after all).

 

Brian,

Public pension systems, from whatever country, in theory all rely on the same type of calculations with regard to their finances.
Basically, and roughly speaking, you would need a crystal ball to determine whether or not it is a good idea to take part.
If your wife expects to live to be a centenary then by all means go right ahead and pay up the maximum contribution to get the maximum SSS pension, because she will not regret it.
If however she were to die prematurely before or shortly after reaching the eligible age for a pension application then paying into a system like the SSS will prove to be a bad option, obviously.
Systems like the SSS hedge the risk of having to pay out a multiple of contributions to people who live long (through pensions), by giving those who die early nothing or just a little.
Statistically the average life expectancy for females in the Philippines stands at around 72. If you do the math, you'll discover that your "break even" point with the SSS pension is also around 7 to 8 years (when retiring at 65). So nothing gained, nothing lost.
The only good reason to enroll is the consideration that in all likelihood the economy will keep growing and living standards (wages) will eventually go up. The bet would then be that the government will decide to compensate pensioners for increasing price levels and a bit extra. Compared with current interest rates on a savings account, that perspective sounds a lot nicer.

 

Could she become a resident of Australia? It sounds like you get payments even thought you don't live in Australia. My quick read of the link below suggests that should would need to reside in Australia for a period of time, though. Her having the ability to be a resident of Australia if she decides is a nice gift to leave for her.

Social Security Payments - Residence Criteria | Department of Social Services, Australian Government

In general, a person must be an "Australian resident", as defined in the Social Security Act 1991, in order to qualify for Australian social security payments. An Australian resident is a person who resides in Australia and has permission to remain permanently—either because they are: an Australian citizen; the holder of a permanent visa; or a protected Special Category Visa holder (as described below). In deciding whether a person is residing in Australia, factors such as the person's domestic, financial and family ties to Australia are taken into account, as well as the frequency and duration of any absences from Australia and the reasons for such absences.

I mention this for US citizens with foreign spouses since we are on the subject.

Can A Foreign Spouse Claim U.S. Social Security? | Cardinal Point Wealth Management

We were recently engaged by an American citizen who wanted to know if her Canadian spouse can claim her U.S. Social Security spousal and survivor benefits. Both she and her husband reside in Ontario, Canada.

U.S. Social Security benefits can be received in Canada free of U.S. tax. In this post, we will explain how, provided certain rules are met, a foreign spouse can also receive spousal Social Security benefits.

The general rule is that a non-U.S. citizen or non-U.S. resident spouse, cannot receive spousal security benefits if they live outside the U.S. for six consecutive calendar months.

However, a foreign spouse who is a citizen or resident of certain countries – among them Canada, Australia and the United Kingdom – can receive spousal social security benefits if the following rules are met:

1. The foreign spouse has reached full retirement age;
2. Social Security benefits are currently being received by the retired spouse who worked in the U.S.; and
3. The retired spouse and foreign spouse have lived together in the U.S. for at least five years while married (doesn’t have to be continuous) in the case where the foreign spouse is not a citizen or a resident of certain countries such as the ones listed above.

In the event the U.S. citizen spouse passes away, the Canadian citizen spouse in this example will be entitled to Social Security survivor benefits if they meet the requirements for spousal benefits mentioned earlier and have not remarried.

 

In the US, there are survivor benefits for the wife. Have you looked into trying to get her benefits as a spouse on your Australian plan?

 

There is no Retirement/Pension plan in Japan?

I NEED to look into a good Attorney who can make a Will for us so in the event my Wife dies her SS goes to our Daughter until she is of age along with any property etc so the Gold diggers do not end up with everything and she misses out...

 

My Japanese kids aren't expecting to get anything at all when their time comes.

 

In Switzerland we have a four column pension system. A basic, an extended, a private and a support one. Someone who is full time or high part time pensum working pays into the basic and the extended one. Someone with mor money can pay also in the private one. Part time worker, very low salary worker or non employed people pays into just the basic and probably in the private one. At getting pension all pensions from basic, extended and private are counted together. Is this amount being below a specific amount the people are entitled to get a support pension. This amount is better than social aid and allows for a lower but still somewhat decent living. But now they plan to lower the support pension to the social aid level which means that only a very basic living is possible. Yeah that can means some people working 45 years are living on a level like people who never worked and paid any taxes. In numbers it can happens that the pension will be halved not counting apartments rentals and health insurance which stays normal. But even the allowance for the apartment rental is terribly limited. In some areas it is no longer possible to find any apartments for the allowance. People with somewhat petter pensions but still below the actual support pension limits are forced to leave the country when the lowering kicks in. "Too much to die but too less to live!"

 

Exactly, I remember one of my Aussie School Teachers explaining Income Taxes to the class, he told us that the Government introduced Taxes upon the workers to help pay for infrastructure and your future Retirement, basically; you worked, paid taxes and received a Pension upon Retirement, and lived comfortably.

Then they took away this system and replaced it with Self Funded Retirement Funds, you and your Employer paid into your fund so when yo retired you were no longer a burden on the Tax Payer, but watching this fiasco with mismanaged Funds, bad investments, exorbitant handling fees etc, it seems like a joke that anyone will be able to retire comfortably or receive anything remotely close to their investment...

Before I left Oz, I remember reading/commenting on a News Page where it stated that both the Liberal and Labor Governments had an act passed in Parliament where it will give them access to the Superannuation Funds of Retirees so that they can divert the trillions in trust towards fighting Global Warming, meaning that instead of receiving YOUR Retirement, you will instead be given a Government Pension so that you can live comfortably...

'Round and Round we go, where it ends, we do not know'...
NEVER Trust a Politician! Always talking in Riddles/Circles for their own benefit...

 

Probably not, but if you look at my grandmother who lived to be 97 and probably paid next to nothing in, it was a great deal. I wonder what form it will take when I qualify. Reduced benefits, means testing, etc. Best not to count on anything from the government these days.