The truth about retirement planning is that, due to the power of compound interest, the earlier you start saving, the better off you may be. It’s essential to know that you’re not alone and that there are steps you can take to enhance your retirement savings even if you started saving for retirement late or haven’t started yet. Getting started is never too late. BDO created a strategy to achieve this.
The last thing that many young, working people are thinking about is retirement. BDO Unibank, however, suggests that they begin saving for it now to ensure a more comfortable life after employment.
While they will receive social security and retirement benefits from their employment, BDO advises that they supplement these by increasing their own retirement savings and taking into account their own Equity and Retirement Account (PERA).
PERA is a long-term, voluntary retirement savings program that offers tax benefits such as exemptions from income taxes on earnings from PERA investment products, exemptions from estate taxes upon contributor death, and certificates of annual tax credits equal to 5% of PERA contributions.
“Life doesn’t end after retirement. Many are blessed to enjoy 20 or 30 more years. PERA helps you have sufficient funds to enjoy a comfortable retirement lifestyle,”said Marissa Romero, vice president and lead for programmed investments of BDO’s trust and investments group during her guesting on NET25’s morning show Ano Sa Palagay N’yo (ASPN).
Reasons to Plan for an early retirement
Romero responded, “When you get your first salary,” when asked when people should start saving for retirement. She added, “It’s okay to start with a small amount as long as you’re consistent.”
She said that managing risks and battling inflation are two benefits of early retirement savings. “Money’s value decreases over time. Your portfolio can be aggressive with early and long-term investing, which also helps your funds grow.
According to Republic Act 7641, The New Retirement Law, employees who retire get benefits from both the government (the Government Service Insurance System for employees of private enterprises and the Social Security System for employees of the government) and their employer.
The first financial institution to receive accreditation as a PERA administrator from the Bangko Sentral ng Pilipinas (BSP) and the Bureau of Internal Revenue (BIR) is BDO, an avid advocate of financial literacy.
There is no one ideal approach to investing or saving money. Any savings or retirement plan’s most crucial component is just getting started. So start now with BDO’s PERA, and you may contact BDO for more information.