By TRINA LAGURA
Nothing can slow down 67-year-old retiree Florentino de la Cruz Jr.
De la Cruz, who retired as a plumber at the Metropolitan Manila Development Authority (MMDA), still provides plumbing and carpentry services to his neighbors in Dasmariñas, Cavite, as well as to nearby subdivisions.
He said his family of eight children, 24 grandchildren and four great grandchildren, cockfighting, occasional drinking, and work, have pretty much kept him occupied since his retirement in 2000.
His work brings in P400 to P500 in earnings per service, and not a month will pass by that he won’t get a call from a client. He said earning P1,500 to P2,000 a month is enough to meet his and his wife’s basic monthly needs. All his children are now working.
De la Cruz, who used to work as street sweeper for over a decade before he joined the MMDA (then Metro Manila Commission), opted to leave his job when he reached the age of 60, rather than wait for the mandatory retirement age of 65.
He used his early retirement pay to buy the house where he and his wife are now living. He said owning a home was his foremost concern because his house in Guadalupe, Makati, which was illegally built on private land, could have been demolished anytime.
“Ok lang. Naisip ko ‘yon pero tinuloy ko kasi sapalaran na iyon e kung mapaalis kami doon sa [Makati] wala kaming mapupuntahan. Saan kami pupulutin (It’s OK. I was thinking that time to push through with my retirement because I was worried that our house in Makati might be demolished. Where would we end up if that happened)?” he said when asked if the thought of not receiving a monthly income concerned him.
De la Cruz has spent all his early retirement pay, has no savings, and relies heavily on his P4,000 monthly pension. But he argued that one does not need much to sustain a simple living.
Filipinos work beyond retirement years
De la Cruz is one of many Filipinos who continue to work beyond their retirement years.
In an interview on ANC’s Dateline Philippines, Andrew Alcid, president and CEO of life insurer AXA Philippines, said results of the global annual research AXA Retirement Scope showed that 38 percent of Filipinos still have a job post-retirement as against the global average of 17 percent.
“One of the key findings is that Filipinos plan to continue working beyond their retirement years. One, to better support their family, being a closely-knit family culture,” Alcid said.
He said the research also revealed that 83 percent of Filipino workers intend to keep a job after retiring, higher than the global average of 54 percent and the highest among all 26 countries surveyed.
“The other major finding is, when asked about activities they plan to do after retirement, 45 percent of Filipinos said they would continue working versus the global average of nine percent,” he said.
The study surmised: “The value of work and taking care of the family are two areas that reflect the Philippine situation. Working as long as one is physically and mentally capable is something that Filipinos consider to be able to support their family. Taking care of the family is a result of the traditionally close-knit family relationships and extended family ties.”
Why Filipinos continue to work
The AXA Philippines head also cited other factors for this mindset. He said the “continuing need for self-esteem” drives a retiree to keep a paying job.
“If you are working, you continue to be productive, then there's this image that you're able take care of your family.”
“Second of all, and this is the reality, is some people are just not prepared financially to retire either because they have not earned enough or they continue to have obligations to take care of the family, take care of the children, grandchildren or other special beneficiaries,” he noted.
Ironically, Filipinos start thinking about retirement earlier than most. The average Filipino thinks about retirement at the age of 28 years old, relatively young compared to 33 years old in the global average, the study showed.
Alcid said this is the case for the older generation because of their heavy reliance on government pension funds or their own employer retirement plans to sustain their post-retirement needs.
“Filipinos think about retirement early in life but do not necessarily have the drive or the means to prepare for it. Hence, Filipinos end up working late in life as a means to fend for themselves,” he said.
For the younger generation, however, they are the ones who actually think about setting up individual retirement plans early on in life and not rely heavily on what the government or their employer would provide post-retirement, Alcid added.
The basic principle that people should be aware of is that they have to start saving early either for retirement, for education, or for large future expenses, Alcid stressed.
In a separate interview on ANC’s Mornings@ANC, Mean del Mundo, registered financial planner for Philam Life, said people should set aside at least 10 percent of their income and put it into savings or retirement account.
“I think most people follow the wrong method of savings. So, from their pay check they first settle their bills, and spend their money, and then save what little is left. And the correct method of savings, actually, is you pay yourself first. So, from your pay check, you take out a certain percentage, ideally, 10 percent of your income and you put it into savings or retirement account,” she said.
Other tips for saving:
• Start early. The older one gets, the more catching up one has to do in preparing for retirement
• Financial goals should be specific and measurable. They should involve realistic amounts and should be time-bound.
• One should match one's financial goals to the appropriate financial instrument. For example, saving up for one's retirement is a long-term goal, so one shouldn't invest in a bank account which is easily accessible
• When investing, size really matters, so one should look into the credentials of one's fund manager
• One should have discipline and commitment to save and stick to one's retirement plan. Having savings means living within one's means
Ideally, she said, a savings account should contain only the individual’s emergency fund. Emergency fund has to be liquid and is equivalent to six months of one’s living expenses.
Mutual funds, investments
The rest of the money should be invested, such as in mutual funds that would assure them of return of investments and the coverage they need.
If they don’t have the know-how to invest in these kinds of instruments, then they can have a fund manager to do that for them, Del Mundo said.
She added that most Filipinos usually don’t have a “surplus income” because they spend more than their means.
She said it is therefore important to stick to the budget and manage one’s expenses. Regardless of the monthly income, saving boils down to self-discipline.
“In life, two things are going to happen. Either we live too long or we die too soon. In fact, people now are living longer because of medical breakthroughs. Not only are they living longer, they want to retire earlier. If you retire early, you’re going to spend an average of 16 years in retirement. The more important question is: will your asset last as long as you do, and how can you make your money stretch for the next 16 years?” she said.
‘Work keeps me healthy’
For de la Cruz, however, he is more than happy to know that he was able to buy his own house out of his retirement money. Besides, he said, work keeps him healthy.
“Ok lang kasi sanay na. Sanay akong nagtratrabaho. Kung hindi ako pawisan, hindi ako nagtrabaho, hindi sanay ang katawan ko (It’s OK because I’m used to working. If I don’t perspire, then I didn’t work. My body isn’t used to that,” he said.
He added he would rather give his money to his children and grandchildren than keep it in a savings account.
“Kasi malakas ang loob ko. Kung wala akong alam na trabaho, hindi ako magre-retiro (I am strong-spirited. I retired because I have skills),” he said.
When asked though if he ever got tired of working, de la Cruz said: “Medyo, pero wala tayong magagawa (A little bit, but I cannot do anything about it).”