Why Do You Need to Invest in PERA While You Are Working Abroad?

Let your money work for you through PERA.
Let your money work for you through PERA.

If you have not heard of it, Overseas Filipino Workers are now eligible for the PERA. The government has launched the programs to help promote long-term investments for Filipinos.

PERA or the Personal Equity and Retirement Account is a voluntary retirement account that an individual can set up for his or her exclusive use or benefit. It is similar to the United State’s 401(K) plan. This serves as a financial instrument for retirement.

How Can You Be Qualified for PERA?

The main qualification to invest in PERA is to have a Tax Identification Number. This is the problem. A lot of OFWs do not have a TIN or have forgotten theirs because of working for several years overseas.

If you do not have a TIN, there are two things you can do to acquire one:

1. Call the BIR Hotline at (632) 981-888 and ask for assistance to check if you already have a TIN. To make it easier for them to check, you can mention the names of the companies you worked with back in the Philippines.

2. Write an authorization letter that your representative can bring to BIR. This letter should allow them to apply for a TIN on behalf of you. You should also send one government-issued ID with your authorization letter.

Why Should You Invest in PERA?

If you want to enjoy your retirement years in a simple yet comfortable lifestyle, it is important to plan for everything to achieve whatever goals you have. Planning for your retirement involves long-term vision, commitment, and discipline. You should also learn how to establish your funds, invest it in placements, and let them grow to achieve the amount you need for your retirement needs.

Here are a few reasons why PERA can be a suitable investment for OFWs:

Higher Returns

If you invest in PERA, it will grow faster and higher than by just leaving your money in your bank. Your money will be invested in stocks, mutual funds, UITF, bonds, and other financial instruments.

Get Maximum Limit on Investments

Since a lot of OFWs earn more than some Filipinos working locally, they can invest up to PHP 200,000 in a year. Filipinos working in the Philippines can invest up to PHP 100,000 only.

Tax Benefit

As an OFW investing in PERA, you are entitled to claim a tax credit from any tax payable to the national government. If you have real properties or similar assets, you can claim tax credits under your name. If you withdraw your investments only after you are 55 years old, you are exempted from being taxed.

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