House to push PERA bill
Six bills have been filed at the House of Representatives for setting up the Personal Equity Retirement Account (PERA). This is equivalent to the 401(k) retirement plans in the US.
This is excellent news for you who want to regularly save for our retirement. Obviously, the SSS won't be able to pay you enough to retire. Pre-need pension plans are quite expensive. And not all companies offer generous retirement plans.
Under PERA, contributions will be deductible from taxable income and earnings of contributions will also be tax-exempt. Your investments are tax-deferred. You get taxed only when you withdraw them upon retirement.
One version of the bills puts that yearly contribution cap at P50,000 per year. That's not very high. In the US, some companies match their employees's contribution, so it's free money. And employees can move their plans when they transfer to another company.
Hopefully, the PERA bill gets passed this year. Cross your fingers.
