How Pinoys Retire

The Pinoy way to retire is to raise kids so they can take care of you when you're old. That would be nice, except they left out the part where you have to save up enough money for expenses.

So what happens is a spiral of financial dependence. (Parents have no money) leads to (debt) leads to (dependence on kids) leads to (kids working to pay off debt) leads to (kids having no savings left for themselves) leads to (no retirement savings for the kids) leads to (more dependence on the next generation).

Having grown up in a barrio of OFWs, I have seen this cycle first hand. I actually think that this, coupled with the lack of jobs, is a strong factor that pushed Filipinos to work abroad.

I have friends and friends of friends who at one time or another had to slave away or are still slaving away because their parents did not plan for retirement.

I had no bones against this system, until it caught up with me several times. It turned out my parents took out a loan to finance some of their projects. They did not tell me about this until the loan was about to default. My parents had no one else to turn to. All my siblings had married and inherited their own problems (I realize now that marriage was a way for them to get out of the trap!).

So all the time I thought I was saving money, my parents' financial situation was bleeding. I realized that the rate my savings were earning was greatly overtaken by the rate that the loan was bleeding out money. In short, if I prolonged the condition and only helped much later, my savings were useless. So my savings ended up paying for the loan :(.

And what's the clincher to that? A couple of years after I bailed them out and built up another nest egg, I learned that my parents had another loan! And like the first time, this one was about to default too!

When I learned this, I felt one with the universe of all Pinoy children who had been sold to eternal slavery. I love my parents, but I feel this is an unfair situation they put me in.

My wife and I agree that we should not let this happen to our kids. The only way to do this is to make it stop now. And to do this, we need to push our agenda hard: save up for retirement no matter what. We have to draw the line somewhere because our vision is to stop this cycle.