The Retirement Money That Never Was

By Lourdes C Burias

Ads by Google

International Payments NTrust.com/MoneyToPhillipines Anytime, Anywhere, Absolutely Free. Get To Know nTrust For Free Now!

Travel Health Quote www.travelhealthquote.com/index.asp Travel or Visitor Medical Insurance Options to choose- Apply online !

Earn 7% monthly profit www.lineinv.com Invest with fixed 7% monthly profit with minimum investment limit $100

If I could only go back in time and choose an option between a lump sum of five years or an outright monthly pension, then I would. I would go revisit that very crucial moment where I made the wrong choice. I would have chosen the latter option. That would have made the situation different.

I just can't forget the date when I retired, July 1, 2011. I wish I could but the wrong choice I made brought me to the circumstances where it is hard to forget. Nonetheless, it has provided me with important life lessons involving decision-making. You would say, "it's too late to fret about it. The milk has been spilt, what benefit could it bring?"

I know. I should have fussed over it long before I have decided to retire. I did have plenty of time to think about it, but didn't give it a chance. I did not listen to my colleagues and didn't heed of anyone's advice... I thought the one million buck was worth defying all the well-meaning warnings. I never thought about how fast money could fly and be lost.

That's why I decided to write and be published. I still have children working. Maybe they can learn from it. I still have lots of friends out there who are in their golden years already; and are retiring soon. I worked with these people for thirty-seven years. They will be looking for advice before making that final resolution. I would like to make things right; for everyone interested to gain from my experience.

Lesson # 1 - Set Aside Old Age Fund for Health Maintenance

Poor health sometimes comes a year after we leave the regular routine of going to and from the office; of rising up early to beat the traffic, of running to the bandy clock to avoid that red mark on the DTR, of regularly interacting with co-employees and clients, and of laughing out together when an office-mate strikes a one-liner joke. These are all the necessary ingredients to maintain good health without really trying. I miss this kind of routine. My system has gotten used to it. I did not look for an alternative exercise. Look what it did to me. I was hospitalized, and I began spending the money for my medicines. This is the one thing I have not considered to happen to me. And worst of all, I have not provided for events such as this.

Lesson # 2 - No Blowout please... Remember your debts and pay!

My first consideration right after I got the check was to make some people happy, especially the relatives and the nearest of kin. I didn't realize my clan was so big. So a bigger fraction of the amount went as blowout money. All were pleased, who wouldn't be? I was more than happy to see their reactions with my generosity. However, the happiness was short-lived. A couple of months after, I have nothing in my wallet. It was empty. And the creditors started to come over one by one for the payment which had long been overdue. It was only then I remembered; I am no longer employed, which simply means I have no more sources to get money from to pay off my debts except after the lapse of five years.

Lesson # 3 - Learn to Say No and Purchase only things you cannot live without!

Everyone in the neighborhood knew I received one million. One million are a great amount for a community where everyone belongs to the low-income group. Since we were all good friends, I found it hard to say no. Each one was dealing some stuffs like a house, house and lot, a car, curtains, and so forth and so on. I bought that small lot for my brother, a second-hand car supposed to be for my business. The car dived overboard a bridge and six people were hospitalized, and the car became one of the items in a junk shop!

Lesson # 4 - Make investment your first Priority!

Then I finally remembered investing on something. That was the irony of it all. It came to my mind last, when it could have been the first. I did put money on business though, but only up to the extent of what was left. It did not survive. No business will carry on when all the daily needs are taken from there. It lasted only for a year.

I have learned my lessons. And I want my kids, my friends, and you my dear readers, to learn yours too from this experience.

When in Cebu City, please visit gregmelep.com for your real estate and retirement needs.

Avail of the opportunity to own a condominium unit in Cebu City for only P12,000.00/month with its own parking lot. Hurry while the supply of units last. Just call the Tel. Nos. shown below.

Tel. No. 555-8464/09164422611/09173373687

Article Source: http://EzineArticles.com/?expert=Lourdes_C_Burias

Retirement funds get BIR income tax relief

Regulations to take effect in Jan. 2012

By: Ronnel W. Domingo
Philippine Daily Inquirer

 0share5 4

Starting January 1 next year, Filipinos here and abroad can invest in trust funds, mutual funds, stocks, bonds and other instruments without paying income tax, although they will be able to enjoy the benefit only after they reach 55 years old.

This was made possible by the Bureau of Internal Revenue, which spelled out in Revenue Regulation No. 17-2011 how investments made under the Personal Equity and Retirement Account (PERA) Law will be taxed.

Enacted in 2008, the PERA law provides for the creation of a voluntary provident savings scheme that complements the mandatory retirement systems—like the Government Service Insurance System and the Social Security System—and provides an alternative tax-preferred financial instrument to encourage people to save for old age.

Under the law, employed and self-employed Filipinos residing in the country may contribute up to P500,000 each to the PERA fund while those staying abroad may put in up to P1 million each.

On a yearly basis, a contributor residing in the Philippines may put in up to P100,000 while one staying abroad may contribute up to P200,000.

A contributor can only put in a maximum of five years’ worth of contributions at any one time, which shall be invested in just one category of investment product.

RR 17-2011 states that the PERA fund may be invested in a trust fund, mutual fund, insurance pension, preneed pension, equities that are traded on the Philippine Stock Exchange, bonds bought from the government or traded in the secondary market, and other such products that regulators may allow.

These regulators include the Bangko Sentral ng Pilipinas, Securities and Exchange Commission and the Insurance Commission.

The BIR grants a 5-percent tax credit for the PERA contributions, which the contributor may use against hisincome tax liability or, if living abroad, to settle any nationally levied tax—except the withholding tax as a withholding agent.

Also, the employer of a contributor may shoulder part of the contribution, but this will be on top of social security contributions and other mandatory employee benefits.

Contributions made by the employee are exempt from the withholding tax on income while those from the employer are tax deductible.

However, the amount of tax-deductible employer contribution will be only up to the amount that—when added to the employees savings—will add up to the yearly maximum, although contributing more is allowed.

Further, income from PERA investments is exempt from the final withholding tax on bank deposits and their substitutes; capital gains tax; 10-percent tax on dividends; and regular income tax.

On the other hand, the contributor will still have to pay—when applicable—the value-added tax (VAT); stock transaction tax; documentary stamp tax; and percentages taxes on the VAT-exempt, franchises, banks, insurance premiums, amusement, winning, and similar activities.

When the PERA income is passed on to others, such as by inheritance, the amount is exempt from the contributor’s income tax and the heir’s estate tax.