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Op-Ed: Prepare for your retirement

If you haven’t thought about your retirement years, now is the time to start. The sooner 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.

It is estimated that you will need approximately 70% of your current income to maintain the lifestyle you are used to. If you work on your own, take time to evaluate the different alternatives that best suit you, as well as the income expectations you have for when you decide to retire.

One of the instruments to ensure the economic resources necessary for self-employed people retirement, is 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:

  • The person can make the contribution directly, on an annual or monthly basis, or take advantage of the automatic deduction system for greater convenience;
  • Tax relief of up to 25% of net income after contributions;
  • Flexibility between the investment instruments;
  • Earnings generated over the years will not pay taxes until the time the money is withdrawn; and,
  • 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 tax free.

It is very important to have a fiduciary institution to have an expert who will address any situation related to the Keogh Retirement Plan and will also help you with the administrative process. As it is put under a trustee, the Keogh Plan is free of claims by third parties.

Author Juan José Santiago is senior vice-president and fiduciary official at Oriental Bank.

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.

* This is a sponsored post by Oriental.

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This story was written by our staff based on a press release.

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