Filipinos are a hardworking and selfless lot. They are ready to log long hours of work and even take on side jobs to take care of their loved ones. Typically, one would save up for a home, a car, children’s education, and celebration of milestones in life.
However, because of this selflessness, some often forget to take care of themselves especially when it comes to retirement.
“Retirement is still years away, I will just start saving for it in 10 years” or “I keep a bit in savings for my retirement, and my kids will take care of me when I retire” are some of the misguided beliefs of many
When it comes to retirement, people are usually short in discipline and planning mainly because only a few thinks about retirement at an early age. Those who don’t start early face the reality of retirement without a plan.
The Personal Equity and Retirement Account or PERA is one of the many financial tools available for Filipinos to start saving up for their sunset years.
PERA is a voluntary retirement savings plan that encourages individuals to save and plan for their retirement while enjoying tax incentives both from the amount contributed and the income from investments.
Any Filipino of legal age, earning income locally or from abroad, and with a Philippine Tax Identification Number is eligible to open a PERA. An individual may invest up to P100,000, and for those living and working overseas, up to P200,000 per year.
As PERA contributors they will enjoy several benefits: income earned is tax exempt; annual contributions are eligible to a 5 percent tax credit, subject to issuance of BIR regulation; PERA withdrawals are not subject to income tax upon reaching 55 years old and the contributor has made at least 5 years of contribution; and in the event of untimely demise of the contributor, the PERA funds are not subject to estate taxes.
PERA, being a voluntary retirement plan, allows anyone to make all the investment decisions, giving them control over their retirement goals.
BDO Unibank, as the first accredited PERA Administrator in the country, now offers PERA through its BDO Invest Online.
Visit www.bdo.com.ph/PERA to know more.