When Does Your Money Start Paying You?

Day to day, we work, we earn, and we save.

Money is the fruit of our hard work.

But at some point, wouldn't it be nice to turn that around?

Instead of always working for money, we start building money that pays us.

The sooner, the better, haha.

There are many ways to do this:

• Dividend income
• Rental income
• Interest
• Investments
• Businesses

There is no single best way. But one question is worth thinking about early:

When we eventually retire, where will our regular income come from?

With PRU, Here Are Two Ways to Do It

The idea is simple: put money in for two years, then let it start paying you.

Depending on what you prefer, there are two approaches.

Option 1: I Want Certainty

You pay in Year 1 and Year 2.

Starting Year 3, you receive a 4.4% per year guaranteed payout (net).

Think of it as PRU's own version of a time deposit style product, designed for people who prefer predictability.

The payout rate is locked in under the plan's terms. So even if bank interest rates change in the future, your guaranteed payout remains at 4.4%.

And in Year 10, your premium is returned, subject to the terms of the plan.

“Simple. Predictable. Something you can plan around.”

Option 2: I'm Comfortable With Some Volatility

The second approach is closer to the experience many of us already have with investments or digital banks.

You put money in for two years and receive non-guaranteed monthly payouts directly to your bank account.

The current distribution rate is around 6.2% per year (net).

That is higher than the guaranteed option, but there is an important difference:

It is not guaranteed.

Distribution rates can change, and fund values can move up or down.

You get the potential for a higher payout, but you also accept more uncertainty.

Which One Is Better?

It depends.

Do you prefer certainty?

Or are you comfortable with some volatility for potentially higher payouts?

Neither is automatically better.

And PRU is certainly not the only way to build income-generating assets.

The bigger idea is simply to start thinking about where your future income will come from.

Because after years of working for money, perhaps one of the goals of financial planning is to eventually have some of your money working for you.

Starting Point

Plans currently start at PHP 250,000 per year for two years.

Disclaimer

The figures above are for illustration and discussion only.

Guaranteed benefits are subject to the specific terms of the plan.

Non-guaranteed distributions and fund values may change and are subject to investment risks and applicable charges.

This article is for general informational purposes only and should not be taken as financial, insurance, or investment advice.