# When to Restart Paying the Maximum SSS Contribution

Is it wiser for individual payors to stop paying SSS in the meantime, and then restart paying **maximum SSS monthly contributions just before age 55**?

Many younger OFW and voluntary members of SSS have been asking us this question.

They say that since pension computation is largely based on the average of the last 60 monthly salary credits before semester of retirement, it’s more practical for them to stop paying SSS for a while and then re-start paying the maximum SSS contribution just before they turn 55.

**What are their reasons for asking?**

They came to know of these SSS rules:

** .** SSS largely uses the last 60 monthly salary credits before semester of retirement for computing pension*.

**.** Individual payors younger than 55 are allowed to increase their monthly contribution to any higher salary bracket

These younger individual payors say that since they’ve already accumulated 120 monthly contributions and are already qualified for pension, it’s better for them to use their premium payment elsewhere, and continue paying their SSS premiums just before they turn 55.

Our comments:

**Yes, this plan might be wise, but consider also these things:**

**1.** The total number of years of contributions also increases the pension amount.

The number of Credited Years of Service (CYS) is also part of the pension formula used for a lot of pensioners:

300 + 20% of Average Monthly Salary Credit + 2% of AMSC x (CYS – 10)

Always take note though that paying lower contributions just to increase your CYS is not wise. Doing this will reduce your AMSC, especially if these low contributions are within your last 60 monthly salary credits.

**2.** If you like to avail of SSS sickness, disability, maternity or salary loan programs, you need to be active payors.

The common requirement is payment of a certain number of contributions within the past 12 months.

**3.** If we have children or parents who depend on us, we need to ensure that they get the biggest death pension that they can get in case we pass away at a younger age.

But if we have adequate life insurance policies, these might cover a lower pension.

Hi Nora,

Russel here. Thanks for this post. Anyway I really could not find any advantage (pension),in paying the maximum before the last 60 months of contributions. I made a calculation between 2 members paying their contributions at the span of 20 years. I will use the formula number 2 as it’s usually the one giving the highest yield. Pls. correct me if I’m wrong.

1.Member No. 1 contribution: Maximum @ 1,760. Total contribution after 20 years is 1760*12*20 = 422,400.

Monthly pension: 300+.20*16000+.02*16000*(20-10) = 6,700

2.Member No. 2 contribution: First 15 years @ 500, last 60 contributions @ maximum (1,760). Total contributions after 20 years is 500*12*15+1760*12*20 = 195,600

Monthly Pension: 300+.20*16000+.02*1600*(20-10) = 6,700.

As we can see both are getting the same pension @ 6,700 even though the 1st member paid more than half of that of the 2nd member. This proves that the amount in contribution is not really a factor but the number of years and the last 60 at maximum.

Hi Nora,

Correction on the member No. 2 total contribution after 20 years. 500*12*15+1760*12*5 = 195,600. I’ve written 20 instead of 5.

Hi russel, yes, you’re right in your comparison and that the total amount of contributions is not a factor, and yes, there’s an unfairness to it. In a way, OFW, voluntary and self-employed members who know the pension computation are luckier because they can manipulate their contributions to their advantage, but employees cannot and those individual payors who don’t know this formula cannot.

Your Member No. 1 case illustrates the case of employees earning 15,750 and above, who cannot control their SSS deductions, and as in taxation or in Philhealth contributions, they will carry most of the burden, as this how social institutions work. Imagine if all individual-payor members stop paying, and restart only before they turn 55. Tt might prompt the SSS to ask Congress for a change in the AMSC formula or pension formula, or in how individual payors pay. I think the recent SSS circular changing their policy on increase in contributions is in response to this issue.

It’s good though for the SSS as an institution that 73% are employees and the rest are individual payors.

Anyway, back to your concern, yes, of course, you can manage your SSS contributions to your advantage. I’m glad you’re looking into these things because it means you’re also looking at other investments and savings schemes. Please comment again if I missed something.

By the way, after I read your comments, I checked how the US SSS computes pension — they consider the salaries for the last 35 years or last 420 months to get the average salary. 420 months! They also adjust for inflation, meaning they multiply an index to the earlier salaries for earlier years. Then they divide the average into 3 brackets, in which the benefit is a % of the average salary. You can see in their table that those with higher salary averages get a lower %, meaning in the US SSS, the higher-earning members also carry the burden.

Hi Nora,

Russel again. Thanks for the clarification. It’s really an eye opener especially for self employed/voluntary/ofw like me. But now I am in a quandary if I will go down to minimum in my contribution or continue paying the maximum and stop when I reach the required 60. My worry is that maybe if I start paying the Max. at 55 I am no longer in a capacity (financially) to pay that amount. On the other hand I could lower my contribution at the lowest and divert instead the money to other investment like PagIbig.

Anyway thanks again. You’ve been a big help. More power to you.

Hi russel, may I think about your data? What’s your date of birth? And how many contributions (no. of contributions) have you paid in all? And how many 1,760s have you paid?

Hi Nora, I’m 45 now and have a total contribution of 147. The last 10 months payments at maximum.

Hi Ms. Nora, this really an interesting topic which totally cleared my doubts. Same as russel, I am thinking why we need to pay max contribution at the earlier stage if at the end of the day it is the CYS that matters.

Hi russel, it’s good to know you’ve accumulated more than 120. Indeed, you have valid arguments in planning to stop contributing for a while, or to continue but pay the minimum. But whether you stop or pay the minimum, it’s wise to save with Pag-ibig MP2, or increase your savings if you’re already with MP2.

If you decide to contribute the 550 minimum to increase your CYS, consider its immediate impact on your average monthly salary credit.

You can check your estimated pension if you haven’t yet, and I hope this helps a bit.

Hi Japs, thanks for your comments. I’m glad that more young people are thinking about their finances. In your other comments, you said you’ve accumulated about 8 years of contributions when you worked here in the Phils. As you’re abroad working, I think it’s wiser if you continue paying your contributions and complete at least 10 years of or 120 monthly contributions to ensure your eligibility for pension. Then think some more about these CYS and average-monthly-salary-credit things after your 120th. Consider also saving with Pag-ibig MP2 if you don’t yet have this.

May I ask a favor from you? When you have time, would you please access your online SSS account, and try to check your estimated SSS pension. Obviously, you’re not yet eligible — but I’d like to know what info does SSS gives if you’ve contributed only around 96 contributions. Thank you very much.

russel computation is wrong.

SSS cannot allow you to jump from 500 to 1760 contribution.

the jumping is per year examples;

2015 550

2016 605

2017 660 etc.

Hi Geronimo, thank you for sharing. Jumping from 500 to 1760 is allowed as long as you are younger than 55. Here’s the new circular on changing SSS contribution amounts, approved in 2014 but released only late last year. I’m curious if an SSS officer at the branch told you otherwise.

Thank you Mrs Nora for the clarification.

Take note that when you reach 50 your MC must be 1430 so that when you reach the five years computation of your AMSC it will be computed on the maximum of 16000 which you pay at 1760. Examples;

50 1430

51 1485

52 1540

53 1595

54 1650

55 1705

56-60(5years) 1760

the computation of your pension depends on the last 5 years of your contributions. In doing so when you reach 56 your contribution must be on the maximum to enjoy the full benefits. Also CYS also affects much.

i dont know also if you are 49, the allowed prevailing minimum Salary Credit for OFW is 5000 that is 550 MC. If that so from 550 at the age of 49 jumping to 13000 that is 1430 MC will be advantageous to OFW.

Noting from below circular, you can jump to 16000 MSC from 5000 MSC below 55 yeras old. Meaning, If you are 54 paying 500pesos you can increase 1760pesos if you reach the age of 55….well that’s great!

“1. An SE/VM/OFW member who is below 55 years old shall be allowed to change his/her MSC without limit in frequency and in number of salary brackets in a given calendar year, but in no case shall it be lower than the prevailing minimum MSC for SE/VM/OFW members.”

Hi Geronimo, I’m glad that you’re investigating these things so you can maximize your resources to increase your pension. yes, you’re right, the last 60 contributions prior to semester of retirement and the CYS are the two factors that determine your pension amount. Thanks again for commenting.

@ Geronimo dela Cruz

I already did. From 605 I paid my last 10 months at 1760.

Hi Nora,

Russel again. This one’s bothering me. As I had stated above I am 45 now and my last 10 payments @ 1760. If I’ll pay my contribution without fail I will complete the 60 contributions at maximum when I reached 50 years old. If I stopped my contribution then and just wait for my pension when I reached 60, I assume I would still get the MSC @ 16000?

Hi russel, yes, it appears to be so. My basis is my present pension computation on my online SSS account, which I observe is being automatically computed using my last 60 contributions, without considering my gaps. I’m computing manually, and I get the same pension amount, and as I continue paying, my pension amount also changes. There were months within the past 60 months I didn’t pay maximum, so my pension amount changes as I add maximum payments. You can check your own pension computation (your online SSS account), compute manually also and observe. Would you please comment again about what you find out. Thanks again

@ Russel, Greetings!

I don’t think so that you will get MSC @ 16000.

Remember the critical period is the last 5 years until you reach 60.

It will be your age at 55 whatever month and end at 60 whatever month falls. What basis then that they will give you for your MSC if you did not contribute for the last 5 years of yours? I guess they will compute it as averaging. They may compute the last contributions of yours and to the minimum contributions @ 5000 if you are OFW. Not sure……that is exciting to know.

Hi Geronimo,

Then that is too bad. If that is true then that’s a little wicked trick not to get the MSC @ max. Seriously who in their 50’s who are mostly retired can afford to pay the 1760 max. contribution?

how to continue pay my sss while im working in saudi arabia almost 2 yrs i stop my payment

Hi Nora!

I have been an SSS member since I was employed in 1980. I have paid MSC @16000 since 1994 and thus have been paying P1760 till I retired (early retirement) in 2015 March. I continued paying P1760 for the whole of 2015 as a voluntary member.Thus my total SSS contributions is 420 months, of which 252 months paying at MSC. If I stop paying my contributions effective 2016, how will this affect my pension benefits? Or is it advisable tp stop and just wait for my pension at 60? I am 57 yrs old now. Can I still avail of loans or heaven forbid if I become disabled at any time before I turn 60, am I eligible for disability benefits? Thank you for your assistance. Your site is very informative.

Hi Ms. Nora,

I filed my manual verification last February 2015 here in Cebu City SSS office and I was told to come back for a follow up in December of the same year. When I came back the clerk told me that the computation was not yet finished and a task force had been created so that by January, computation will already completed. So, by end of January 2016 I made a follow up again. SSS told me that there is no need to make a follow up of the manual verification but have to wait and see our bank pension accounts because the lump amounts of the manual verification will be deposited there. And until now, it is already May 2016 nothing has been deposited in my account. I made a follow every month to SSS, but the personnel assigned would just tell you to read a noticed posted on the front door of SSS

Cebu saying ” There’s no need for SSS pensioners to follow up manual verification because the amounts will be added to their bank accounts”.My question is, until when I will wait for the said amounts to be deposited in my bank account?

Hi, Individual payors younger than 55 are allowed to increase their monthly contribution to any higher salary bracket

Based on the above rule, the payorA(age 25) need only to increase his MC from 550 to 1760 on age 54-55

1. 25 – 55 = 550(Minimum for OFW)

2. Age 55 = 1760 or 1 bracket below since you can still increase by one bracket

3. Age 56 to 60 = 1760

So the above payorA even though contributed less will receive the same pension as the payorB paying the max from the start.

Hi alex, yes, you’re right. I’m glad you’re analyzing these things well. For maximum amount, those retiring at age 60 should start paying the maximum at age 54 1/2 so that all the last 60 monthly contributions are maximum. SSS considers the last 60 contributions prior to the semester of retirement, not prior to the month of retirement.

Ellen Hi mrs Nora, I’m Ellen.I’m turning 59 this month.I have worked for almost 25 continued years.My last contribution before i resigned was 1500, that was March 2001. On the same year i paid 24mos contribution as voluntary member at the lowest amount of monthly contribution. After 10 years i’ve heard that the bases of computation is the last 5years of maximum contribution before age 60.I’m worried because of the smallest amount I contributed, so even though its so hard to produce money, I contributed 660 on April 2015,on May 2015 I paid 825, on June 2015 I paid 1100 and on July 2015 I paid 1540…I have stop paying due to financial shortage. What will be my expected pension when I turn 60 years old next year. I plan to contribute again if I have enough amount of 1760 so I should have chance to receive the right amount of pension I expect.

Hi Elena, I hope you can contribute this month and the next months until about 4 to 6 months before your 60th birthday — SSS considers the last 60 contributions prior to the SEMESTER of retirement. Contribute 1,595 because your last contribution was 1,540. Those more than 55 are not allowed to increase their contributions by more than one salary bracket from last posted contribution per year. If you can write your last 60 contributions and corresponding salary credits (count 60 contributions backward from July 2015), and your calendar years of contributions, then we can estimate your pension amount. This is better: you enroll in online SSS so you can check your contributions, your CYS and your estimated pension. When 6 digits are asked during registration, try using 6 digits from your July 2015 receipt. If no longer recognized, pay for this month at SSS, so you can enroll online again after your payment is posted.

hi i just want to ask im an ofw and i have been paying the maximum amt. which is 1760 for the past 2yrs is it ok if i decrease the monthly contribution and will increase 5 yrs before my retirement so i can still have the maximum pension? thank you and God bless

Hi tine, yes, you can do that. Start paying the maximum at around age 54 and 6 months. But I have to say that if you decrease, note that if you claim benefits during your low-paying periods, computations will be based on these lower contributions. God bless too

hi po im single mom 1. if pass away at age 62 then my only beneficiary is my daughter but she’s 30 by that time, is she eligible for the lump sum that I saved? 2. if I accumulate 120 monthly contributions before i reach 60 for example 45 yrs old po completed, am I entitled for pension once i reach 60? thanks po

Hi tine, 1. If your parents are still alive when you pass away, it will be them who will be able to claim because they are next in line after legal spouse (if there is) and minor children. If they have passed away by that time, then the next in line will be anyone written as your beneficiary in your SSS records (I assume your daughter’s name is already written there as your beneficiary).

Five years or 60 monthly pensions is the guaranteed number of pensions so if you have received already 60 or more monthly pensions then you pass away, then no more benefit is given to your daughter or parents, only the funeral benefit.

2. Yes, even if you stop paying at age 45 as long as you have accumulated 120 monthly premiums, you will get pension when you turn 60. If that is your plan, pay the maximum contributions from age 41 to 45 so your pension will be higher.

I am 33 now and I still have 5 more years to pay to complete the 120 contributions. I used to work in a private university but now I decided to do homebased job. Can I continue paying the max MC and once I reached the 120 contributions, can I stop contributing to SSS? If I do this will I stil receive pension in the future?

Hi Ads, yes, you can continue paying the maximum monthly contribution as Voluntary. Yes, you will receive pension if you will accumulate 120 monthly contributions. Yes, you can do with SSS as you have planned, but make sure to look for other safe investment schemes because the SSS pension won’t be enough for retirement. When BDO launches its PERA scheme, consider it. Check out also Pag-ibig 1 and Pag-ibig MP2. Or the SSS PESO.

hi po.. im 26 at gusto mag start magbayad ng sss. panu po ang mainam na gawin?

1. can i start paying min and 60months before i complete the 120months mag max po…. ? pag na complete na ang 120months mag stop na.?

2. bakit po ung iba 20yrs or more magbayad.? ano po ang kinaiba pag nagbayad ka ng more than 120months.

salamat po 🙂

Hi, I would like to confirm my understanding. I am 31 yrs old and already have 96 contributions. so meaning I can stop paying once I reach the 120 total and that would be an assurance that I will get a pension?

Hi jean neri, enroll in online SSS so you can check if you have a Date of Coverage (this means your registration and contributions are valid) and you can track your no. of contributions. Yes, if you have 120 or more valid contributions, you can apply for pension when you turn 60. If you’re employed, you’re mandated to continue contributing even if you’ve already accumulated 120.

hi maam, just want to know from1760 can I decrease my payment to 550? im an ofw plan to pay the maximum amt before may age of retirement. thank u and God bless

Hi tine, are you younger than 54? Yes, puede. Make sure to start paying the maximum at age 54 and 6 months.

yes mam, im 33yrs old. mam pde po ako mag bayad ng highest amt last 5yrs before i plan to retire or stop payment as long as i complete the 120 contribution tama po ba? salamat po

Hello im regine I want to apply sss my ages 35 yrs old but I want to pull payment in 1 time for 10 years limit for my sss it will considered? And what is Mc means? What is MSC?

As soon as posible

This month I want to start to pay all maximum 4 10 years payment

I am an OFW, and started paying 1,650 beginning 2015 til Feb of 2016.

I was unable to make contributions beginning March 2016. I have more than 120 contributions already.

Now I read about the computation for pension at age 60. I am 43 now. And I am considering other options for my retirement. I want to decrease my payment however I was told that I can only go down as far as 2 brackets from my present contribution. My option is to stop contributions altogether then just resume payment at age 55. Any thoughts on this pls?

Thanks in advance.

Merry Chiristmas po Ms.Nora,

Ofw po ako, dito sa saudi, member po ako sa sss,sinusubukan ko pong magregister online para makta ko ung mga contribution ko, ang problema ko po ung RECEIPT NO./OTC: di ko lam kung saan ko makikita, may mga nakalagay sa resibo na rcpt no. at sss transaction number sinubkan ko pera ayaw din po.

please help po.

thanks in advance

Hello,

I currently working as ofw, Im 42 years old now, I want to be a SSS member and get the highest monthly benefit.

If i will start now, can you please advise me in what formula should i take, if can pay the total 120 contributions in 5 years time.

Hi Dennis, you have 17 to 18 years more before you turn 60. You can have your highest pension amount if your last 60 monthly contributions are maximum contributions (currently 1760) and you have more years of contributions. Since SSS considers the last 60 monthly contributions, you can contribute lower amounts now (minimum is 550) and then pay the maximum contributions later on (last 60 months), but because we can’t predict what’s our situation in the future, you can start with maximum or near-maximum contributions.

About paying 120 contributions in 5 years, this is not allowed. You have to pay 120 contributions in 10 years. You can pay many months in advance but SSS will post your payments as the actual months arrive in real time. This means if you start this month, you will have to pay contributions until 2026. If you already have an SSS number, make your first payments from abroad so you’ll be verified as OFW.

Hello Ms. Nora,

I am 30 years old and I paid a total of 66 contribution at the maximum amount. I am an OFW now, and I am planning to continue my contribution until i reached 120.

My question is, can I still get pension?

Hi Lalala land, yes, if you accumulate 120 or more monthly contributions, you will get a pension when you turn 60. Siempre mas higher ang pension kung mas maraming taon na nag-contribute ng maximum. Ang basis ng computation ay yong the last 60 monthly contributions/salary credits and the number of credited years.

Good day maam,

Wat if i skip for 2months still i can pay for those previoys months???

Panu po magbyag my remittance din po ba abroad? Dto po kc aq taiwan usually kc pinapahulog ko sa pinas…anu po mas easy way to pay? Kng mghuhulog po aq example for 6mos.contributions?

Hi Mrs Nora! In the pension formula.. Will SSS use the AMSC of the last 5year contribution or the average of all the years of contribution?

Im kind of confuse on how they compute the AMSC. I’m 26yrs old, resigned and planning to be a voluntary member. I already contributed for 3 years and wanted to know if it’s ok to decrease my contribution to minimum.

Hi Ann, they will compute both the 2 averages you mentioned, then kung ano ang higher average, yon ang gagamitin. With your plan of decreasing your contribution amount, puede naman, kasi you still have time to increase it when you get employed again. But if you plan to get married soon and have a child, you need to maintain a higher contribution to avail of a higher maternity benefit.