Living In The Philippines Forum

It’s Your Money => Securing Your Family's Financial Future => Topic started by: aerosick on December 31, 2009, 08:48:21 PM

Title: Our Future Plans
Post by: aerosick on December 31, 2009, 08:48:21 PM
While growing up I remember how excited I was when the weekend arrived and I didn\'t have school. We would roam the countryside exploring, playing with neighborhood kids, just having fun. When it got close to dark, we would listen for our mom or dad to honk the car horn which told us to get home within 15 minutes. When we heard 2 honks, we\'d better be less than 5 minutes from our country home. 3 honks and we were in deep do-do!  :\'(

My wife Eda\'s memories of weekends were of getting up very early and going with her family to the market where she would get \"parked\" and try to sell the small bars of soaps, small bags of asine (salt) or whatever her parents had bought that week for resell. She grew up poor and vividly remembers going to bed hungry many times. Now Eda is very careful with her purchases and is a real bargain hunter.

If I am gone from this world before her, we have set up not only her future monthly income, we also have purchased properties in both the USA and in the Philippines. Hopefully between these two countries she will stay comfortable in her declining years.

As I\'m 25 years older than her, the odds are high that this is the way it will work out. But right now we are battling an early stage of cancer found in Eda this year. Eda is fatalistic and now thinks that I will outlive her!  :o

Things happen to you and yours in the middle of your \"written in stone\" future planning. We try to stay flexible and stay open for what comes along.

As they say in the USA Midwest: \"who knows which way the wind blows when it snows\"...

Billy
Title: Re: Our Future Plans
Post by: paulgee on December 31, 2009, 10:07:52 PM
Billy, I hope all goes well for Eda in the future, it is indeed an irony that we all think our wives will outlive us. My wife is 24 years younger than me and I feel that way, though she is less certain.

Only recently married, my wife will at least have half of one pension I have recently started taking. Our future plans involve purchasing/building a property in the Philippines, but that is all in the future at the moment.

However, I do think it important to have something in place for ones wife, and it should not be too difficult to achieve at a basic level for most of us. After all a little money goes a long way for a Filipina in her own country, so a small income will give her (and probably some of her family members)  a decent standard of living.

One thing I am uncertain of is how a lump sum could be invested in the Philippines to return a decent interest rate, is that possible, and risk free for her to achieve ?

Paul
Title: Re: Our Future Plans
Post by: aerosick on December 31, 2009, 10:17:08 PM
Billy, I hope all goes well for Eda in the future, it is indeed an irony that we all think our wives will outlive us. My wife is 24 years younger than me and I feel that way, though she is less certain.

Only recently married, my wife will at least have half of one pension I have recently started taking. Our future plans involve purchasing/building a property in the Philippines, but that is all in the future at the moment.

However, I do think it important to have something in place for ones wife, and it should not be too difficult to achieve at a basic level for most of us. After all a little money goes a long way for a Filipina in her own country, so a small income will give her (and probably some of her family members)  a decent standard of living.

One thing I am uncertain of is how a lump sum could be invested in the Philippines to return a decent interest rate, is that possible, and risk free for her to achieve ?

Paul

Paul,

Thanks for the thoughts. Eda is still keeping this pretty quiet and I know that early stage detection will go in her favor.

We have a choice of a lump sum distribution here in the USA but won\'t take it due to taxes. Instead we will spread this out over 5+ years. Hopefully others will comment on this option.

Eda grew up poor and will be able to take care of herself and provide food as she learned when growing up. Owning property is a big comfort to her when she talks about what the future has in store for her.

Billy
Title: Re: Our Future Plans
Post by: Lee2 on December 31, 2009, 11:05:12 PM
Billy I am truly sorry to hear of this and I am glad to hear that they caught it early on and therefore will surely cure it. Please tell Edna to think only positive thoughts because IMO the body has a way of healing itself and I am a firm believer that positive will wipe out any negative.

As you know, I am 20 years older than my wife as well so I too have tried to make sure she will be taken care of since she too grew up very poor and I never want her to have to go back to that way of life. Since my wife seems to be as healthy as possible and never even catches a cold when I have one because I started her early on with vitamins and such, I feel she will outlive me with all my medical issues and because of that she has made life a little easier on me by her wish to move back to the Philippines to live once I am gone which sort of makes it easier to plan for her future since costs in the US can be quite high on most things and there would probably never be enough money. I guess that even the best plans might go astray but we are moving in that direction and I feel that my wife should be OK because she is a lot smarter than I am. I am sure Edna will also be OK and ourlive us both.

Billy my friend, God bless and may 2010 bring you all the best things life has to offer and all your positive wishes which no doubt include Edna\'s not only beating this thing but going on to outlive us all. 
Title: Re: Our Future Plans
Post by: Steve & Myrlita on December 31, 2009, 11:46:27 PM
While growing up I remember how excited I was when the weekend arrived and I didn\'t have school. We would roam the countryside exploring, playing with neighborhood kids, just having fun. When it got close to dark, we would listen for our mom or dad to honk the car horn which told us to get home within 15 minutes. When we heard 2 honks, we\'d better be less than 5 minutes from our country home. 3 honks and we were in deep do-do!  :\'(

My wife Eda\'s memories of weekends were of getting up very early and going with her family to the market where she would get \"parked\" and try to sell the small bars of soaps, small bags of asine (salt) or whatever her parents had bought that week for resell. She grew up poor and vividly remembers going to bed hungry many times. Now Eda is very careful with her purchases and is a real bargain hunter.

If I am gone from this world before her, we have set up not only her future monthly income, we also have purchased properties in both the USA and in the Philippines. Hopefully between these two countries she will stay comfortable in her declining years.

As I\'m 25 years older than her, the odds are high that this is the way it will work out. But right now we are battling an early stage of cancer found in Eda this year. Eda is fatalistic and now thinks that I will outlive her!  :o

Things happen to you and yours in the middle of your \"written in stone\" future planning. We try to stay flexible and stay open for what comes along.

As they say in the USA Midwest: \"who knows which way the wind blows when it snows\"...

Billy
Billy,
So sorry to hear this. May God heal Edna to full health and vigor.
God Bless.....
Title: Re: Our Future Plans
Post by: Lee2 on January 01, 2010, 12:42:45 AM
I personally do not think many of the banks would be sound in the Philippines or maybe even anywhere else in the world but they would have to be at least part of the plan. I have never lost money when owning rental property during my life, yet at times some problems did come about. I think rental property in the Philippines is the way to go. In hand I trust.

Maybe build a compound for rental units for foreigners as some have already done or buy up small inexpensive condos and rent them out or have a trusted rental agent handle them for you. If anyone wants a trusted condo sales person and rental agent in Cebu, feel free to contact me and I will happily put you with the young man. No way may be perfect but this way does seem to be working for the wife and I for the last few years.

My only advice would be the same as everyone knows it should be, try to buy low and therefore be able to rent low and while that may not always be easy, todays high prices will probably be tomorrows low prices as values seem to keep going up. The units we bought have doubled in retail value which literally means nothing because selling and retail value have little in common, but the retail price does offer a guide that might make sure to not lose money if forced to sell.

Good luck all and please be sure to give your ideas so we can all learn from you too.
Title: Re: Our Future Plans
Post by: uk on January 01, 2010, 01:17:45 AM


One thing I am uncertain of is how a lump sum could be invested in the Philippines to return a decent interest rate, is that possible, and risk free for her to achieve ?

Paul

you could invest a lump sum in a time deposit account with BPI or hsbc which would be low risk but  the interest rates are not great between 2.5% - 3.5% much like the rest of the world
Title: Re: Our Future Plans
Post by: c_a_p_t_a_i_n_r_o_n on January 01, 2010, 01:18:55 AM
I spoke to the manager of our RCBC bank and they had a LONG TERM DEPOSIT PLAN

LARGISH SUM NEEDED P500,000

NO interest for 1st 5 years
12% thereafter

gives effective interest rate of

6.55% after 10 years
8.25% after 15 years
9.14% after 20 years
9.69% after 25 years
10.06% after 30 years
10.33% after 35 years
10.54% after 40 years

I\'m sure most banks will offer similar deals
Title: Re: Our Future Plans
Post by: uk on January 01, 2010, 01:49:06 AM
my understanding of time deposit with bpi is that they are different than long term deposits as the term can be as low as 35 days but only up to 90 days  and minimum deposit of p10,000 but you can reinvest again after the 90 day limit.
Title: Re: Our Future Plans
Post by: Lee2 on January 01, 2010, 01:51:00 AM
Just remember to spread out your deposits into more of the larger banks because they would only be insured for p500,000 and that is if the PDIC does not go broke. We use BPI and CitiBank Philippines but even those might not be fully safe. Stay under the insurance to at least try to play it safe.

Added, also remember that you will likely be dealing with the exchange rate changing. Years back I made a nice deposit into a 2 year term only to lose a bunch of money when it went up from p20 exchange to double that, all we can do is hope for the best and that is why I say that property seems to be more stable and income providing and doing that in the local currency.
Title: Re: Our Future Plans
Post by: uk on January 01, 2010, 01:59:31 AM
Just remember to spread out your deposits into more of the larger banks because they would only be insured for p500,000 and that is if the PDIC does not go broke. We use BPI and CitiBank Philippines but even those might not be fully safe. Stay under the insurance to at least try to play it safe.


totally agree with that
i think bpi and bdo are the safest banks here and also the one\'s with international links .eg Citibank,hsbc. but looking at what happen around the world last year who knows .(that felt strange saying last year) happy new year to all.
Title: Re: Our Future Plans
Post by: Lee2 on January 01, 2010, 02:24:41 AM
Another thing that might be worth mentioning here is that over my 15 plus years of going back and forth to the Philippines, it seems that property values seem to follow the exchange rate to some degree. So back when we looked at a home when the rate was p20 to one dollar the home was a little over p1 million and later on when we went back to look at the same home a couple of years later when the rate was something like 38 to one the cost of the same house was now over p2 million, so I would say that property seems to follow exchange rates to some degree but bank deposits do not and a person can really get hurt if the rates change drastically or make out like a bandit if they go the other way.

I have tried to play the exchange rate over the years and have almost always lost. When we bought one condo unit we bought it on in house terms and the exchange rate at the time we put the deposit down was about 48.7 to one US dollar and I was getting over 5.5% in the bank on my retirement, so I figure I would go the free interest way for 2 years, well the following year came and I had to deposit the balance into our checking account to cover the balance of the next 12 checks we wrote and the exchange rate was now 42.5 to one and I took a bath. So from my personal experiences, I would say to make a deal when you can and then just go with whatever happens but I think playing the exchange rate can be a bad bet, but property over long term seems to be much more stable.

Anyone else wish to comment if they are or have found the same thing to be true?
Title: Re: Our Future Plans
Post by: uk on January 01, 2010, 02:26:30 AM


Added, also remember that you will likely be dealing with the exchange rate changing. Years back I made a nice deposit into a 2 year term only to lose a bunch of money when it went up from p20 exchange to double that, all we can do is hope for the best and that is why I say that property seems to be more stable and income providing and doing that in the local currency.
makes me think of the quote from all banks.
Past performance is not a guide to future performance. as the value of your investments can fall as well as rise and you may not get back the full amount invested.
Title: Re: Our Future Plans
Post by: Lee2 on January 01, 2010, 02:27:34 AM


Added, also remember that you will likely be dealing with the exchange rate changing. Years back I made a nice deposit into a 2 year term only to lose a bunch of money when it went up from p20 exchange to double that, all we can do is hope for the best and that is why I say that property seems to be more stable and income providing and doing that in the local currency.
makes me think of the quote from all banks.
Past performance is not a guide to future performance. as the value of your investments can fall as well as rise and you may not get back the full amount invested.

exactly!
Title: Re: Our Future Plans
Post by: uk on January 01, 2010, 03:08:36 AM
for what it is worth my advice to anyone thinking of coming here to live is to open a bank account here now and set limits to what exchange rate you are happy with eg: 40 -50p to $/£ and only make money transfers to here when it is within said limits.
i had a bank account here before we came to live here as to me it make sense to me to have a local bank account as we came here every year for a holiday (the wife always had one here) then when we knew we wanted to live here full time we came over opened accounts with different banks and started making monthly transfers within our exchange rate limits to cover the cost of the house (which we were still looking for) this way we found if the rate was low one month we did no transfers .this may look like a risk to most as bank insurance here is only p500,000 (it was only p250,000 at the time ) but i believed the risk was no different than my home countries banks.
we also do the same now with our expenses we keep amount of money in our local accounts to last us a year here so when the rate is bad we have no worries when it is good we top it up.
Title: Re: Our Future Plans
Post by: rdjlazo@yahoo.com on January 01, 2010, 05:05:33 AM
Sorry to hear that Eda was diagnose with that disease. Early detection plus advances in treatment
have increase the chance of recovering without any worry of relapse. Regular check up is critically important.
Mr Lee is right on investing in rentals as long  the property is in good shape and location must be as important. I was thinking of doing that too when I get there in March 2010. Also think of owning
vacant land for future increase in value and the managing is but paying taxes and clean up from
time to time. (You only buy this vacant lot if the price is right) 1/2 price or less should be your policy
when you are buying. As you go on you will find out how to price these houses and vacant lots.
It should be your price or you are not buying.

Best regards to all and happy happy  new year too. 2010 welcome

Title: Re: Our Future Plans
Post by: c_a_p_t_a_i_n_r_o_n on January 01, 2010, 06:14:56 AM
If you really want a solid investment vacant land with waterfront access is the way to go

Priced doubled after holding for 2-5 yrs from early 80s to late 90s
I bought and sold 9 properties in this timeframe (admittedly not in Philippines)

But like the guy who turned me on to this type of investment said \"God ain\'t making any NEW waterfront land and when supply decreases, price increases\"

Now it\'s not a gambit for small investors as waterfront property don\'t come cheap (and it won\'t get any cheaper).
Title: Re: Our Future Plans
Post by: GregW on January 01, 2010, 08:55:18 AM
Billy, my thoughts and prayers are with you and your asawa now too.

I vote for the rentals.  My asawa and I plan to do the same. 

Title: Re: Our Future Plans
Post by: aerosick on January 01, 2010, 12:39:38 PM
Thanks for all of your concern and well wishes! Eda doesn\'t know that I posted this yet, but when I tell her, she will appreciate this.

I posted this personal information as just an example of how things can turn on you quickly and just to get this Topic started. I see a lot of good ideas and many plans in place.

More to come???

Billy
Title: Re: Our Future Plans
Post by: c_a_p_t_a_i_n_r_o_n on January 03, 2010, 05:03:33 AM
Good luck Eda & Billy

Happy New Year
Title: Re: Our Future Plans
Post by: aerosick on January 03, 2010, 11:27:06 AM
Thanks everyone! We\'re attacking 2010 at full throttle!!!  ;D

Billy
Title: Re: Our Future Plans
Post by: medic3500 on February 01, 2014, 12:50:48 PM
Aerosick,
Don't know why this popped up as a current thread but it did, hope all is well from the medical side. As for taking a lump sum think very hard about it and way the problems that can arise. I took the lump and got screwed twice over loosing almost 50% in taxes and penalties. One of the worst mistakes I ever made on bad advice from a so called money/tax expert. I'm still hurting from it and will for several more years.
Title: Re: Our Future Plans
Post by: iamjames on February 02, 2014, 11:24:53 PM
An interesting thread. I hope everything has turned out OK for Aerosick and Eda.

The topic is interesting because it touches on an area of great concern for any responsible minded man retiring to the Philippines. In the majority of cases we have wives or GFs who are younger in years and we are concerned about their futures when we are gone to the happy hunting grounds. Their financial security (and especially any children involved) should be our priority concern.
My suggestion is that we help them become independent by sponsoring studies for a good qualification and employment. The best legacy we can leave is education and self sufficiency. 
Title: Re: Our Future Plans
Post by: Art, just a re(tired) Fil-Am on February 03, 2014, 12:28:56 AM
Men who have married a Filipina or of any nationality 10 to 15 yrs younger than themself, will surely have their wife and children's future in their best interest that they are well provided for, because it's just in our human nature to do so as being responsible individuals!
When I got married, my wife was 15 yrs younger than I, but her parents were just a few yrs older than myself, which was a plus, because after 3 years of marriage, my wife got her U.S. citizenship and petitioned both of her parents into the U.S. where they were still able to work!
To make a long story short, just within 7 yrs from the time her parents arrived in the U.S., they were both gainfully employed and independent and both became U.S. citizens in their right and were then able to petition my wife's younger sister and niece into the U.S., who has graduated from nursing school and currently working.
So, we moved and retired to the Philippines and they too retired with their SSA benefits, but stayed in the U.S. with my wife's sister!
It's great when a plan comes together! We've lived here in NCR Luzon for 17 yrs now and my in-laws are still doing fine in the U.S.! Her Dad is still working part-time, because he likes to work to keep himself active at age 72 and he likes the extra money to spoil his grand daughter! 
BTW, they're now the ones sending us a Balikbayan box every year for Christmas!  ??? :o ;)   
Title: Re: Our Future Plans
Post by: paulgee on February 03, 2014, 03:44:47 AM
An interesting thread. I hope everything has turned out OK for Aerosick and Eda.

The topic is interesting because it touches on an area of great concern for any responsible minded man retiring to the Philippines. In the majority of cases we have wives or GFs who are younger in years and we are concerned about their futures when we are gone to the happy hunting grounds. Their financial security (and especially any children involved) should be our priority concern.
My suggestion is that we help them become independent by sponsoring studies for a good qualification and employment. The best legacy we can leave is education and self sufficiency.

Yes, whilst we may be lucky in gaining a wife/gf some 10-30 years younger than us, the  downside for them is that they will likely be widowed one day and maybe cut adrift from all financial income.

Everyone here will have different circumstances, and act accordingly. Whilst Shirley will have a small continuing pension when I die we are planning and thinking ahead. We are putting money into education plans for her nephews and nieces, so they can continue onto college when they finish school. Without college education their employment options are much limited. And it is them that will be expected to earn to help all the family, as is the way with Philippines families.

Whilst there are downsides for expats  buying property in the Philippines (in their wifes/gf name) it does leave them with their own property when we are gone.

One option is to pay into SSS, so that whenyour wife/gf is 60 she will be intitled to a pension, based upon her contributions made. When we return later this year Shirley will inquire and restart her contributions. I don't know much about the contribution v pension rates but it is probably the easiest way to contribute to your loved ones old age.

Title: Re: Our Future Plans
Post by: BingColin on February 03, 2014, 09:59:38 AM
An interesting thread. I hope everything has turned out OK for Aerosick and Eda.

The topic is interesting because it touches on an area of great concern for any responsible minded man retiring to the Philippines. In the majority of cases we have wives or GFs who are younger in years and we are concerned about their futures when we are gone to the happy hunting grounds. Their financial security (and especially any children involved) should be our priority concern.
My suggestion is that we help them become independent by sponsoring studies for a good qualification and employment. The best legacy we can leave is education and self sufficiency.

Yes, whilst we may be lucky in gaining a wife/gf some 10-30 years younger than us, the  downside for them is that they will likely be widowed one day and maybe cut adrift from all financial income.

Everyone here will have different circumstances, and act accordingly. Whilst Shirley will have a small continuing pension when I die we are planning and thinking ahead. We are putting money into education plans for her nephews and nieces, so they can continue onto college when they finish school. Without college education their employment options are much limited. And it is them that will be expected to earn to help all the family, as is the way with Philippines families.

Whilst there are downsides for expats  buying property in the Philippines (in their wifes/gf name) it does leave them with their own property when we are gone.

One option is to pay into SSS, so that whenyour wife/gf is 60 she will be intitled to a pension, based upon her contributions made. When we return later this year Shirley will inquire and restart her contributions. I don't know much about the contribution v pension rates but it is probably the easiest way to contribute to your loved ones old age.

You need to look carefully into SSS, I don't know what the maximum payment is, but without that the pension could be very small. Bing paid in for 14 years before she left for the UK in 1988, but after we returned and she turned 60, she now only received P1200 a month, less than the annual increase of her UK government pension. We think there was some problem we the record of her payments, but it became too difficult to follow up.
Title: Re: Our Future Plans
Post by: BudM on February 03, 2014, 10:16:59 AM
SSS website has an online registration for individuals with a SSS number that allows them to access their complete record on history of payments and by who (employer), etc, etc.  Also with a few people I know, it turns out that some employers never made or for part of their work history, the payments were never made.  I know one lady in particular who worked at a factory, had gotten her SSS number about 1986, and has nothing showing on her record as ever being paid in. The most visible cases of this are Kasambahays.  With the crackdown on paying SSS, and the laws being updated on Kasambahay employment and reiterated in 2013, former Kasambahay employers can be held responsible for back payments all the way to some time in the 1990s.

Added:
Here is info on Pag IBIG which is also a mandatory employer and employee contribution.  I have yet to check out completely but from what I have seen so far, it might be a pretty good program to go and contribute extra to.

http://www.gov.ph/services/pag-ibig-services/ (http://www.gov.ph/services/pag-ibig-services/)
Title: Re: Our Future Plans
Post by: Art, just a re(tired) Fil-Am on February 03, 2014, 10:42:47 AM
Last year when my wife got her PhilHealth Plan and went to check out her SSS, come to find out her's and or her employer's contributions was showing "zero, zip, nada"!
In the mid 80s, She worked for Richard Gordon, Mayor of Olongapo City of all people! Go figure!
Luckily, my wife has "Survivor's Benefits" from my U.S. Government pensions upon my demise!
BTW, we have a housekeeper who comes in and cleans 3 times a week and gets paid on a daily P300 rate basis when ever she comes in, sometimes she doesn't even show up on her scheduled days to work, no big deal it's that much less out of my pocket per week or months! We are not obligated or have anything to do with her SSS contribution, since she is considered self-employed and it's up to her to contribute into her own "voluntary" SSS and PhilHealth account!     
Title: Re: Our Future Plans
Post by: BudM on February 03, 2014, 10:51:44 AM
Yeah, it is nice we can get them the survivor benefits on that.  Too bad they can't get our SS survivor benefits without living there for five years.  Oh yeah, your wife did, right?  Plus most of your pension comes from the older retirement system.  Mine is weighted about the same with SS since I paid in to that all my career under the new retirement system so yeah, I can get the survivor benefit on only the pension part.  I got the TSP for backup though.  Still, every little bit helps so if they got their own SSS and whatever else, I say, great.
Title: Re: Our Future Plans
Post by: Art, just a re(tired) Fil-Am on February 03, 2014, 03:53:32 PM
Yes my wife has "Survivors Benefits" on my U.S. Civil Service and Military pension, but I don't know about my V.A. though, but it's tied in with my Military pension! SSS is what it is when she's eligible at whatever the age limit is by then when she gets older, when I'm no longer around! She didn't work long enough to contribute into Social Security! Luckily our home here in Sta Rosa is paid for! We have nothing to go back to in Northern California, still too expensive there to live where I used to work at Travis AFB in Fairfield, Ca.! We would only consider going back as a last resort, but slim chance of that! Anyways, "Knock on wood"! Decisions, decisions, decisions!  ??? :o ;) 
Title: Re: Our Future Plans
Post by: BudM on February 03, 2014, 07:28:17 PM
I missed that in an earlier post in the thread by you.  Yes, self-employed is voluntary contribution here on SSS.  But, for their regular employees, to my knowledge it is supposed to be mandatory for the employer to contribute along with the employee each putting in shares of that plus each of their shares on PhilHealth and PagIBIG or whatever it is called.  And with Kasambahays paid under ₱5000.00/month. the employer themselves are required to pay both the employer and employee share of everything. But, also in some cases, all the above was accidentally forgotten about.