Social welfare

Personal Retirement Plan

The Personal Retirement Plan (PPR) is an individual investment account that has the purpose of receiving and managing resources earmarked for retirement, that additionally provide fiscal benefits, making these accounts a vehicle for fiscal planning.

Investment in this type of product is recommended because:

  • The AFORES or IMSS pensions and retirement system might be inadequate for preserving your income level when you retire.
  • For making the most of fiscal advantages on your annual contributions in your retirement.
  • The characteristics of the PPR are detailed in the LISR (Mexican Income Tax Law) Article 151, section V.

Advantages of the PPR:

  • Contributions to this product are deductible from the ISR (Mexican Income Tax).
  • Invests in exempt instruments under ISR, which represents an additional 0.46% annual yield.
  • Yields are not included in taxable income in their annual tax filings.
  • At the time of retirement the ISR rate may be different from the current one, and if you have low income, the ISR rate could be less.
  • You can apply a excempt amount of 90 UMA’s per year and so reduce your taxable base, reducing the taxes to be paid on these resources.

The contribution that can be made to a PPR varies every year and is established by means of two criteria, as a % of income or maximum cap:

This must be the lesser of:

  • 10% of the holder’s annual income, or
  • The equivalent of 5 UMA’s for one year.

For 2018 the cap is $147, 014.4

PPR accounts can be invested in:

  • Capitals Market
  • Money Market
  • Investment fund management companies

The recommendable strategy in this type of accounts is for the long-term and the recommendation is for instruments that by their nature may offer attractive yields over time, such as:

  • Investments in stocks in the Mexican Stock Exchange
  • Long-term Debt Instruments

It is recommendable that the investment be distributed based on age, risk tolerance and expectation of retirement age.

Ask you investments advisor for guidance on those investment possibilities that best fit your needs.