Should You Invest In Pera?

Summary

In this video, Marvin Germo discusses the Pera (Personal Equity and Return Account) system, a retirement investment program for Filipinos. He explains that Pera is an acronym for personal equity return environment account, similar to the 401K in the USA. Germo emphasizes the importance of saving and investing for retirement, especially for Filipinos who often lack proper planning. He highlights the tax advantages of Pera, such as reduced withholding tax and exemption from estate taxes, making it an attractive option for long-term investments. However, he also points out the current cap on annual contributions as a limitation. The video is aimed at encouraging viewers to take control of their financial future and make informed investment decisions.

Takeaways

• 😀 The speaker emphasizes the importance of planning for retirement to ensure enjoyment of life at older ages.
• 💡 The term 'Pera' is introduced as an acronym for Personal Equity Return Account, which is a concept similar to the 401K in the USA.
• 🌟 The speaker highlights that Filipinos generally do not save or plan for retirement, and Pera could be a step towards encouraging this.
• 📅 Pera was enacted into law in 2008, but it hasn't gained as much traction as it should, according to the speaker.
• 💼 The speaker suggests that having multiple income sources, including retirement plans, can provide better financial security in old age.
• 🏦 The Pera program is voluntary and can be availed by income earners who are Filipino citizens, aged 18 and above, and have a TIN.
• 💰 The program allows for tax advantages, such as a reduced withholding tax rate, making it attractive for long-term investment.
• 🚫 The speaker points out a drawback: there is a maximum cap on the annual contribution to the Pera program.
• 📈 The Pera program is recommended for those who are not disciplined savers and have a long time frame for investment, but not for those nearing retirement.
• 🌐 The speaker, Marvin Germo, is a stock market trader and investor who shares knowledge to help others achieve financial freedom.

Q & A

What does 'Pera' stand for?

Pera stands for Personal Equity Return Environment account.

Why is it important to start investing in Pera at a young age?

Starting young in Pera allows for long-term passive investing, which can accumulate significant returns over time due to the power of compounding.

What is the significance of the Pera program for Filipinos?

The Pera program is significant for Filipinos as it encourages retirement planning and saving, which is a step towards financial security for many who may not be currently planning for retirement.

When was the Pera program enacted into law?

The Pera program was enacted into law in 2008.

What are the eligibility requirements for contributing to a Pera account?

To be eligible for a Pera account, one must be a Filipino citizen, at least 18 years old, and have an income, whether self-employed or employed.

What are the conditions for withdrawing money from a Pera account?

You can only take out money from a Pera account when you are above 55 years old, and you must have contributed for at least five years.

What are the tax advantages of investing in a Pera account?

Investing in a Pera account offers tax advantages such as a 20% withholding tax on contributions, reduced taxes on dividends and capital gains, and exemption from estate taxes.

What is the current maximum cap for annual contributions to a Pera account?

The script does not specify the current maximum cap, but it mentions that there is a limit and the speaker hopes for a revisit to increase it.

Who would benefit the most from the Pera program?

The Pera program is most beneficial for those who are not disciplined enough to save and invest on their own, as it provides a structured way to save with additional incentives.

What types of investments can be made within a Pera account?

Investments in a Pera account can include UITFs, mutual funds, stocks, exchange-traded funds, government securities, bonds traded in exchanges, annuities, and insurance pension products.

What is the speaker's advice for those nearing retirement?

The speaker suggests that those nearing retirement should be more conservative with their investments and might not benefit as much from the Pera program due to their shorter time horizon.