Top 5 reasons why OFWs need to have a retirement plan


Imagine you’re over 50—and you don’t save enough money even though you’re well- compensated while being employed as an Overseas Filipino Worker (OFW). It’s quite a hard-hitting experience, isn’t it? For an OFW like you, a sound financial decision should include a retirement plan as it is critical and essential element of becoming financially independent.

After all, the purpose of a retirement plan is to be economically stable even when you are no longer working abroad.  You’ve been employed for years, away from loved ones so it’s legitimate that you will enjoy the days when you retire.

Sadly, a large number of OFWs are not ready to return permanently to their homeland. This is because of lack of savings as they don’t have concrete financial blueprints for their future retirement. In addition, some OFWs are still in the need of finding a new source of income upon returning home.

The aging population in the Philippines would normally rely on pension such as the SSS or GSIS. For some who are unfortunate enough, they depend on charitable institutions in order to survive. Why? Because only a small segment of our old age population is financially literate. Some common reasons why most OFWs failed to save for retirement are overspending, failure to anticipate future financial needs, saving for retirement is not a goal or priority, and lack of financial knowledge.

What are the implications and consequences when an OFW isn’t prepared upon retirement period? Let me share with you the five reasons for you to reflect as an OFW.

Read:Top 6 Reasons Why An OFW Should Consider Investing In Mutual Funds

1. You will continue to spend money
The problem with retirement is that the moment you stop receiving monthly paycheck your daily expenditures never stops. When you get old and your health is declining, you still need to buy something you will need such as medicine, food, and pay for utilities regularly. Consequently, you shouldn’t worry about those expenses when you have pension or reasonable source of passive income when you retire.

2. Becoming a burden to family members
No one wants to be a burden in the family. While most of our elder populations do not have pensions and personal savings, it’s quite common for someone to depend on extensive financial support and care from extended families. If you live too long you will need to have enough savings to maintain your needs for your old age. Therefore, securing your future financial condition is a major concern for most OFWs. Failure to have a retirement plan can cause emotional anxieties and financial burden to your loved ones. In other words, aside from your personal needs like food and paying for utilities, they will have to worry about your medication or hospitalization especially when your health is not at its best.

3. Sadly, your children can become substitute for retirement
The common reason why you’re sending remittances regularly to your old age parents is that they have not prepared for their retirement. Why? Because they don’t have stable jobs to sustain their financial needs. Sadly, the children of OFWs can become the parent’s retirement. I’m not saying you should stop sending remittances. While it’s a great opportunity to offer financial support to your loved ones, over-remitting can hinder your plan to save for your retirement. Be smarter than your parents.

As you get older, chances are you will be too much dependent from family members especially if your budget is too tight. If you don’t want to become a burden to your loved ones and avoid this cycle, you’ve got to set financial goals. Don’t let your children become your retirement plan in the future. Remember, helping yourself becoming financially stable simply means helping your loved ones as well.

4. You may be obliged to work longer despite of old age
When you’re at a retirement age, the challenge is how you are going to survive when you are no longer physically fit to make money. We’ve heard countless stories of OFWs who are already 50 or 60 years old yet they have to extend contract even if they wanted to go back home permanently. The reason is that either they don’t have enough savings for themselves or some family members are still depending on them financially.

It’s great that some of our parents are receiving pensions from SSS or GSIS when they have retired as professionals. But due to high inflation rate in the Philippines, this may not be enough to cover their expenses. In the twilight remaining years of their lives, they should suppose to travel and enjoy the retirement age, but most of them have to work to survive from the fangs of poverty.

5. Failure to have a retirement plan can cause financial worries
Retirement planning is one of the most important financial goals you’ll undertake – and failure to do so could ruin your happiness in the future. When you don’t better savings plan, you will end up in tragic debts, leaving your family with financial and emotional distress. Some parents are uncomfortable to talk about a time they’d be unable to feed themselves as they’re no longer physical fit to make money. Therefore, make sure you have the right insurance plan for you and your family to avoid financial worries due to health care costs.

Final thoughts
The good thing about planning for retirement is you can start either savings or investing even when you are still young and receiving larger income. Some financial goals you might want to consider as an OFW is to enjoy a debt-free life, secure a comprehensive health and life insurance, have a house you can call your own, investing in paper asset and have a passive or stable income like rental properties.  Put your money in smart investments that will provide you financial security through time.

Needless to say, saving for retirement all comes down to discipline, commitment, and hard work. Aside from creating a budget and getting out of debt, build a long-term savings plan through investing a portion of your income regularly. It’s never too early or too late to prepare for retirement fund and achieve financial success.

JUN AMPARO is the author of OMG! OFW’s Money is Gone: Practical Tips on How to Be Wise with Your Hard-earned Money. Being an OFW for over a decade, he’s aware about the common financial challenges of many Overseas Filipino Workers.  He is also a founder of, a blog about financial education dedicated to fellow OFWs.

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Jun Amparo

Jun Amparo

JUN AMPARO is the author of two inspirational books about personal finance and marriage.  He is nominated as Huwarang OFW 2019 organized by The 700 Club Asia and is pursuing his doctoral study in education. Presently, he is working as a university counselor and lecturer at Asia-Pacific International University in Thailand.