“SSS Retirement Benefit: A Simple Guide to Calculate Your Pension”

SSS Retirement benefit, also known as pension, is one of the benefits given to employees when they retire. It is important to consider the amount you will receive from the Social Security System (SSS) before spending your savings on the YOLO and FOMO crazes. It may be wise to know how much you will receive from SSS upon retirement, which could be a small amount. Although, there are many acronyms used in this topic, thankfully, information is available online through Google.

Household Employers, Kasambahay, and OFW Members

If you fall under any of the categories such as household employer, kasambahay, or OFW member, it is important for you to refer to the updated SSS contribution table.

Retirement benefit or pension, also known as a retirement fund, is an entitlement for employees upon their retirement. It is among the few benefits that employees can enjoy after retirement. Instead of spending all your savings on the “You Only Live Once” and “Fear of Missing Out” trends, it might be worthwhile to take into account the amount you will receive from the Social Security System (SSS) upon retirement. It is essential to prepare yourself for the possibility of it being less than you expected.

I have to admit that all these acronyms make me feel like a certified “tito.” However, thanks to Google, the necessary information is readily available.

3 Simple Formulas to Compute Your SSS Pension

Once you understand the terms, you can proceed to calculate your pension. The Social Security System (SSS) has provided three formulas for computing your monthly pension. Since there are three formulas, you will receive three different answers, and the highest one among them will be considered as your monthly pension.

Here’s a guide on how to calculate your SSS retirement benefit:

1. Based on the Credited Years of Service (CYS)

To rephrase the given statement in English, it can be said that the initial formula for calculating SSS pension is heavily dependent on the number of years for which an individual has made contributions. This implies that the greater the number of years of contribution, the higher will be the pension amount. However, this formula is applicable only if the individual has made or intends to make contributions for more than 19 years.

2. Minimum SSS pension

SSS has established a minimum pension amount that ensures members receive no less than the minimum wage. This calculation is particularly beneficial for workers who earn less than the minimum wage and those who have worked for less than ten years.

3. Based on the Average Monthly Salary Credit (AMSC)

The SSS pension formula is dependent on your Average Monthly Salary Credit (AMSC). You can increase your SSS pension by increasing your contribution. However, it is important to keep in mind that this formula is applicable to those who have contributed or plan to contribute for 19 years

The three formulas remain the same as per R.A. 11199 plus Php 1,000 for all SSS pensioners.

Pursuant to the Memorandum from the Executive Secretary in 2017, by the authority of the President, an additional Php 1,000 shall be given to all pensioners.

  • The first formula results in the highest pension amount if you plan to work for a long time. It includes a 2% increase in your pension for every Credited Year of Service (CYS) beyond 10 years.
  • The second formula is not ideal for your pension as it results in a low amount that may not cover your basic needs. Even the combination of the minimum pension amount of ₱2400 and an additional Php 1,000 is insufficient for maintenance medicine expenses.

The last formula, on the other hand, is simple to compute and provides a straightforward pension calculation.

Sample Computation of SSS Pension

To compute Mr. Wise’s pension, we need to determine his average salary for the last 3 years of service, which will be used to compute his retirement benefit.

Since Mr. Wise plans to retire at age 60, we can assume that he has worked for 40 years (60-20).

To compute his average salary for the last 3 years, we can add up his salaries for the last 5 years and divide it by 5 to get his average annual salary.

Average annual salary = total salary for last 5 years / 5 = (₱60,000 x 5) / 5 = ₱60,000

Therefore, Mr. Wise’s average annual salary is ₱60,000.

To compute his retirement benefit, we can use the formula:

Retirement benefit = (average annual salary) x (years of service) x (pension multiplier)

Assuming that the pension multiplier is 2%, we can compute Mr. Wise’s retirement benefit as follows:

Retirement benefit = (₱60,000) x (40) x (0.02) = ₱48,000 per year

Therefore, Mr. Wise’s annual retirement benefit is ₱48,000.


CYS: 40 years (started working at 20 and plans to retire at 60)
AMSC: ₱ 20,000 (this is the maximum MSC regardless of his salary)

The values below are based on the new SSS contribution table for 2019. It’s important to note that these values are only for illustration purposes and will vary in future years.

Looking at the chart above, formula #1 yields the highest amount, which means that it will provide Mr. Wise Guy with the highest pension starting at age 60.

You mentioned that the pension amount is small, but it’s actually quite substantial.

It’s worth noting that this amount was calculated based on 40 years of credited service. If you plan to retire earlier, your pension will be lower. Personally, I don’t want to work for that long. I want to enjoy life and spend more time with my family. If you’re like me, then a pension of ₱17,300 is unlikely, since you’re not planning to work for that long.

Average SSS Retirement Benefit

Do you have an idea about the average pension that retirees receive? The example given above is just a demonstration, so please don’t get too excited yet. The average SSS pension over the years may not be sufficient to support a person’s livelihood, which can be quite alarming.

2012: ₱3,707
2013: ₱3,577
2014: ₱3,792
2015: ₱3,780
2016: ₱3,658
2017: ₱5,123

2 Ways to Maximize Your SSS Pension and Achieve a Comfortable Retirement

Are you satisfied with just average SSS pension figures? If you settle for less and don’t take action, your retirement may not turn out as you hoped. To secure a better future, you need to have a contingency plan that goes beyond saving money. You also need to invest to keep up with inflation and grow your wealth. By doing so, you can level up your retirement game and enjoy a comfortable life after work.

Build Your Retirement Fund

One option to consider is obtaining a Variable Universal Life (VUL) insurance plan that includes both income protection and wealth accumulation benefits. This can provide your family with financial security and peace of mind while allowing your money to grow over time. To receive a quote and financial consultation, you can click on the link provided.

 Sun Maxilink Prime | The Best Selling VUL Plan from Sun Life

If you have a minimum of Php 250,000 in your bank account, it might be worth considering investing it in a single-pay variable unit-linked (VUL) insurance plan. By doing so, you can potentially increase your returns compared to leaving the money in a savings account, and you will also receive life insurance coverage.


“Although SSS provides a decent retirement benefit, relying solely on it may lead to financial difficulties during your golden years. It’s advisable to consider investing in a mutual fund,sss Retirement benefit a simple guide to calculate your pensions, UITF, VUL plan, or other similar options that not only beat inflation but also provide a comfortable retirement that you deserve.”

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