Secure your retirement
Written by: Juan José Santiago, Senior Vice-president and Fiduciary Official, Oriental Bank
Have you thought about how you want to spend your retirement years? If you haven’t, now it’s the moment to start so that the goals you set for that important stage of your life become a reality.
If you work on your own, take time to evaluate the alternatives that best suit your reality, as well as the income expectations you have for when the moment of retirement arrives. It is estimated that you will need approximately 70% of your current income to maintain the lifestyle you are used to. The earlier in life you start saving for retirement, the more you will achieve because it potentially increases the amount of money you will contribute for a longer time.
One of the instruments to ensure the economic resources necessary for self-employed people retirement, it’s a Keogh Retirement Plan. This is an instrument that works much like an Individual Retirement Account (IRA), although their benefits are different and greater. Some of its benefits and advantages are:
- Tax relief for your contributions of up to 25% of net income after contributions.
- The person can make the contribution directly, on an annual or monthly basis, or take advantage of the automatic deduction system for greater convenience.
- Flexibility between the investment instruments.
- Earnings generated over the years will not pay contributions until the time the money is withdrawn.
At the time of the distribution, a preferential rate of income tax of up to 10% may be applied for Puerto Rico residents, and in certain cases part of the distribution may be received without any taxation.
It is very important to have a fiduciary institution, in order to count with an expert who will attend any situation with the Keogh Plan, also it would help you with all the administrative process. By being placed under a trustee, the Keogh Plan is free of claims by third parties. The distribution of investments is recommended to be done together with an institution that has an independent brokerage house. Doing it through the same institution that has that subsidiary helps you manage your money in a more efficient way.
Secure your money. Contact your financial advisor to get advice on the Keogh Retirement Plan. Select the options that will help you meet your financial goals.