Philippine government must declare retirement as a national wealth emergency for the reason that most Filipinos are not prepared to do so. Even the law governing employment practices and labor relations are not enough to provide Filipinos with a decent retirement. Based on the Labor Code of the Philippines, the minimum retirement pay is 1/2 month salary for every year of service while a fraction of 6 months is considered as 1 year. The 1/2 month salary will include the 1/12 of the mandatory 13th month pay; 15 days salary based on the latest salary rate; and cash equivalent of 5 days service incentive leave. Manulife Investor Sentiment Index (MISI) conducted by the Canada-based insurance and financial services provider Manulife Financial Corporation showed that Filipinos have an average retirement savings worth 3.6 months while Asians have an average retirement savings worth 2.9 years. MISI is an annual survey measuring and tracking Asian consumer behavior related to personal financial planning. Respondents are middle class investors who are at least 25 years old and who are the primary decision makers on household financial matters. We are astounded by the low retirement savings of Filipinos but what concerns us the most is the reason behind it. MISI showed that the low retirement savings of Filipinos is based on the expectation that family members will support them upon retirement. We do know that strong family ties is one of the core values of Filipinos but what we do not know is whether Filipinos have a retirement plan when family ties get untangled. Filipinos must work toward financial independence with enough retirement savings to maintain their desired lifestyle even without a regular income. MISI showed that Filipinos believe that an average retirement savings worth 2.1 years is enough as compared to the ideal retirement savings worth 10 years. The ideal retirement savings is based on the average life expectancy of 70 as compared to the average retirement age of 60. Filipinos must start to save more to catch up with the ideal retirement savings for the reason that no amount is enough once the dreaded inflation sets in. Inflation is the rate at which the general level of prices for goods and services is increasing while the purchasing power of currency is decreasing. We must protect the purchasing power of retirement savings by investing in asset classes that can provide capital preservation and appreciation.
