Retirement in the Philippines is governed by a patchwork of laws depending on whether an individual belongs to the private sector, the public sector, or is self-employed. Understanding the nuances of "early" retirement requires a look at the Social Security System (SSS), the Government Service Insurance System (GSIS), and the Republic Act No. 7641.

I. Private Sector Retirement (SSS and RA 7641)

For those in the private sector, retirement is primarily governed by the Social Security Law and Republic Act No. 7641 (The Retirement Pay Law).

1. Eligibility Criteria

In the private sector, "early" retirement is generally considered optional retirement at age 60, while the compulsory retirement age is 65. To qualify for SSS retirement benefits, a member must:

Have paid at least 120 monthly contributions prior to the semester of retirement.
Be at least 60 years old and separated from employment (or a cessation of self-employment).

2. Computation of SSS Monthly Pension

The SSS uses three different formulas to determine the monthly pension. The benefit is the highest of these three results:

The Sum of: .
40% of the Average Monthly Salary Credit (AMSC).
The Minimum Pension: (for at least 10 CYS) or (for at least 20 CYS).

3. Retirement Pay Law (RA 7641)

Separate from the SSS pension, an employee is entitled to retirement pay from their employer. If there is no collective bargaining agreement (CBA) or applicable contract, RA 7641 dictates the minimum:

Eligibility: Age 60 (optional) or 65 (compulsory) with at least 5 years of service in the company.
Computation: At least one-half month salary for every year of service. A fraction of at least six months is considered as one whole year.
The "Half-Month Salary" includes:
15 days salary based on the latest salary rate.
Cash equivalent of 5 days of service incentive leave (SIL).
1/12 of the 13th-month pay.
(Totaling approximately 22.5 days per year of service).

II. Public Sector Retirement (GSIS)

Government employees are governed by Republic Act No. 8291 (The GSIS Act of 1997). The GSIS offers different "modes" of retirement, with early retirement often falling under the Optional Retirement category.

1. Eligibility Criteria (RA 8291)

To retire early under GSIS, a member must:

Have rendered at least 15 years of service.
Be at least 60 years of age at the time of retirement.
Not be receiving a monthly pension benefit from permanent total disability.

2. Computation of Benefits

Retiring GSIS members can typically choose between two options:

Option 1 (5-Year Lump Sum): 60 months of the Basic Monthly Pension (BMP) paid upfront, with the regular monthly pension starting after five years.
Option 2 (Cash Payment and Pension): A cash payment equivalent to 18 months of the BMP, with the monthly pension starting immediately.

The Basic Monthly Pension (BMP) is calculated as:

.
The BMP cannot exceed 90% of the Average Monthly Compensation.

III. Special Provisions for Certain Occupations

The Philippine legal system recognizes the physical demands of specific professions, allowing for much earlier retirement ages:

Underground/Surface Mine Workers: Under RA 10757, the optional retirement age is 50, and compulsory is 60, provided they have served at least 5 years.
Military and Uniformed Personnel: Benefits are generally governed by specific laws (like PD 1638), where retirement eligibility is often based on years of service (e.g., 20 years) rather than a high age threshold.
Racehorse Jockeys: Optional retirement at 55 if they have at least 5 years of service.

IV. Tax Treatment of Retirement Benefits

Under the National Internal Revenue Code (NIRC), as amended by the TRAIN Law, retirement benefits are generally exempt from income tax if:

The retirement program is BIR-approved.
The employee has been in the service of the same employer for at least 10 years.
The employee is at least 50 years old at the time of retirement.
The tax exemption is availed of by the official/employee only once.

Note: SSS and GSIS benefits are inherently exempt from income tax regardless of these specific criteria.

V. The Personal Equity and Retirement Account (PERA)

Enacted under RA 9505, PERA is a voluntary retirement saving system that acts as a third pillar alongside SSS/GSIS and employer-sponsored plans.

Early Withdrawal Penalities: Withdrawals made before age 55 or before 5 years of contribution are subject to penalties (returning the 5% tax credit).
Qualified Distributions: To receive benefits tax-free, the contributor must be at least 55 years old and have made contributions for at least 5 years.