About Me

Monday, December 3, 2012

Financial Choices

I had mentioned that the debt I had taken out for the rental apartment was three parts. Here is what is remaining:

Debt 1: 5,903 TL at 12,60%
Debt 2: 8,693 TL at 11,52%
Debt 3: 7,350 TL at 11,03%

I can only earn around 7,5% interest on my savings account. Earlier, I had decided to pay Debt 1 by mid-December. Then, it hit me! Starting January, the Government is going to match 25% of personal retirement funds!

Our system is a lot different than what you are used to. First of all we have a Social Security System which is not doing real well. I am barely past 45 and I was able to retire this year. So, obviously this system is not sustainable in the long run. Few years ago they pushed the retirement age in increments but, the effects will be seen much later. Therefore in 2004, a legislation passed for personal retirement. This is thought to be a supplementary system for the Social Security. Up until this year, I would document my contributions to my employer and I would receive a tax refund. A lot of people could not take advantage of this so the Government decided to match 25% of all contributions. Of course there is a cap.

In lieu of the above, doesn't it make more sense to contribute more to the personal retirement and get the 25% government match? It is free money so, why not take it?

Yes, I would like to see the debt gone earlier but, the logical thing to do is to up the retirement fund contributions. In the personal retirement system, the earliest date that I can be eligible to retire is when I am 56. That is still 11,5 years away. As long as I can contribute to the system, I will receive the Government match. Not bad huh?

The debt will still be paid as planned.


  1. sounds complicated but you seem to have the handle on it.


    1. I hope so Gill. I do not have much faith in our Government. I think this 25% matching thing may not be sustainable in teh long run. So, I want to take advantage of this as much as I can.

  2. Our plan is to really bulk out our retirement in 2014 after we pay off all our debts in 2013. Pretty much the earliest you can retire in the states and get Social Security is 65

  3. Now it is 58 for women and 60 for men if they have started to work after 2008. People who started earlier can retire at earlier ages depending on the ir start dates. It will soon be made 65 in Turkey too.

    The problem is; in the US there are jobs for people over 55-60. In Turkey there are not so many jobs available for older folk. That is why I started consulting. I hope to be able to do this at least until mid-2023. We shall see.