There are those who spend their lives thinking about the day they will stop working, trying to guarantee a peaceful future without financial hassles. But there are also those who reach this stage without any big plans and end up having a surprise that changes everything. This is what happened to a man who, already retired, discovered that he was ultimately entitled to a retirement plan that would guarantee him a ‘million-dollar’ estate..
Rich Colorado, born in El Salvador, moved to California and built his entire life there. He dedicated himself to the bowling industry and worked as a scales technician for decades, until retiring at the age of 65. When he decided to stop, he had no savings, investment or share plan that would guarantee economic stability.
Like many workers, Rich’s main concern was having a decent pension that would allow him to live comfortably after retirement. It seemed like this wouldn’t be possible, until a stroke of luck completely changed the course of his life, according to Spanish digital newspaper Noticias Trabajo.
Upon retiring, Rich discovered that the company where he had worked for so many years maintained a pension plan in his name. It was this fund that, without him knowing, grew over the years and guaranteed him an enviable retirement. In an interview with Business Insider, the retiree explained that he never invested in shares, preferring to invest the money in Certificates of Deposit, with interest rates between 4% and 5%.
Currently, at 87 years old, Rich has accumulated around 1.3 million dollars, the equivalent of around 1 million euros, all the result of this pension plan and the interest accumulated over time. The case shows that financial stability can sometimes come from where you least expect it. “It’s incredible that I have so much, because I never planned anything. I have around 750 thousand dollars in cash and my house is worth 600 thousand”, he said, quoted by the same source.
“Stressing about renovation is not worth it”
Comparing himself to other retirees who struggle to pay rent or are forced to share a home, Rich says he learned a valuable lesson. “Stressing about renovation is not worth it,” he said. According to him, his financial tranquility resulted mainly from moderation. “I was always moderate and so was my wife. We didn’t pay for our children’s university education – they dealt with it themselves. I tried to help one of them and he told me to spend my money on holidays”, he recalls with humour.
From coach to do-gooder: Rich’s new plan
After ensuring a comfortable old age, thanks to this ‘million-dollar’ heritage, Rich’s next step will be to leave a legacy to his family. The retiree plans to create a trust fund to distribute his fortune to his children when he dies. “This way distribution will be simpler and avoid conflicts”, he explained, according to the same source. Each child is expected to receive around $150,000, and their home will also be part of the fund. “Property taxes are very low, just $600 a year,” he said.
Despite his fortune, Rich confesses that he continues to live simply and without great luxuries. “Nobody tells me what to do with the money. People say it takes a lot to retire, but I have more than enough and I barely use it,” he admitted. His story contrasts with that of millions of people who, as they approach retirement, are worried about their financial future.
How to achieve stability without planning
Rich believes that the secret was taking advantage of the opportunities offered by the company. Instead of taking risks with shares, he preferred safe investments, such as Certificates of Deposit, which guaranteed constant and hassle-free interest.
Without a formal retirement plan, he ended up discovering that he had an account with around 401 thousand dollars (around 375 thousand euros), financed by the company. To this he added small applications in low-risk products, which over the years have grown steadily. “I never planned anything, but I knew how to take advantage of what the work offered me at the right time,” he said.
A lesson about the financial future
Rich Colorado’s story is an example of how stability in retirement can come from simple decisions, prudence, and luck. At a time when so many people are questioning whether they will have enough pension to live with dignity, this man’s case shows that it is not always necessary to have a perfect plan, but rather to make the most of every opportunity and maintain a balanced life, says the .
What if it happened in Portugal?
When talking about reform, the essential thing is to understand how the different “pillars” work and what rules govern them. In Portugal, everything is based on a clear legal framework that distinguishes the mandatory public pension from optional complementary solutions, and this determines how and when the money can be received.
The basic pension comes from Social Security (General Regime), with contributions and calculation included in DL no. 187/2007 (reference salary, training fee, revaluation). This is where who contributes, the rates and how the pension is calculated, as well as the moment at which it can start to be paid, are established. This is a public and mandatory provision, regardless of whether or not there are private savings.
In the complementary pillar, if there is a professional pension fund sponsored by the employer, the Legal Regime of Pension Funds applies (Law no. 27/2020, of 23 July, revoked DL 12/2006). The right to benefits, the form of payment (capital and/or income), the eligibility conditions and the information to be provided to the participant are set out in the plan regulations and the fund regulations, under the supervision of the ASF. In practice, the worker can ask the former company/management entity for the regulations and projection of rights to know exactly what they have to receive.
If the savings are a Savings-Retirement Plan (PPR), the PPR Legal Regime (DL no. 158/2002) is in force, with reimbursement rules for old age and other eventualities (incapacity, long-term unemployment, etc.). In terms of taxation, the benefits of the Tax Benefits Statute (EBF, art. 21) apply: there are IRS incentives for deliveries and specific treatment for redemption; Outside of legal conditions, there may be penalties (namely refund/increase of benefits enjoyed).
Heritage transmission
Regarding the transmission of assets in the event of death, the Anglo-Saxon “trust” model does not exist in Portugal. Typically, beneficiary clauses are used in pension funds or PPRs to designate who receives the amounts after death. In the absence of these clauses, the amounts form part of the inheritance, complying with the rules of inheritance provided for in the Civil Code, which protect spouses and descendants.
In tax terms, free transfer is subject to Stamp Duty, although there is a 10% exemption for spouses, descendants and ascendants. The only exception is in the Madeira Free Trade Zone, where it is possible to set up trusts under an “off-shore” regime, with its own legal framework and specific limitations.
The practical roadmap is: confirm the public pension (Law no. 110/2009), ask the manager for the documents and conditions of the fund/PPR (Law no. 27/2020 and DL no. 158/2002) and, finally, align the designation of beneficiaries and succession with legal support.
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