OFW Retirement
Posted on August 26th, 2008
Finally, the Personal Equity Retirement Account or PERA bill has been signed into a law last Friday, August 22. This new law is expected to improve the country’s Gross Domestic Product (GDP) from 19-23% to 30% as it encourages savings from Filipino resulting to more capital for investment.
The new law, which is said to benefit OFW the most, allows every Filipino to save for his retirement fund. The maximum yearly investment of P100,000 or its foreign equivalent, and if the contributor is married, the spouses are allowed to make P100,000 contributions each. For OFWs, the limit is doubled, meaning for married couples, they can contribute up to P400,000.
These contributions can then be invested in mutual fund, unit investment trust funds, stock and other qualified PERA investment products. All contributions, together with the interest and dividends earned will be tax-exempt as long as the contributor does not withdraw the funds before the age 55. A tax credit equivalent to 5% of the total PERA contribution can also be claimed by the contributor.
The scheme is expected to attract eight million individuals, specifically OFWs, and self-employed individuals or entrepreneurs who are not required to contribute to the Social Security System and the Government Service Insurance System
Can you please elaborate more on this issue? I know it is a new law which may have some loopholes. It sounds very encouraging, but hey, it is not a few thousand pesos investment. Thanks.
[…] “There’s this thinking that returning Overseas Filipino Workers can come back and suddenly become entrepreneurs but not all of them can become businessmen or women […]