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Old 03-02-2020, 12:01 AM   #1763
BBCWatcher
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Join Date: Jun 2010
Posts: 11,555
Actually I have not commit the 100k into the endowment yet. About to do it already as im not sure for how long will Etiqa offer the 2.59%pa endowment plan.
Well that's an altogether different situation! So you have another S$100K in cash and no endowment. Why are you interested in an endowment plan for your retirement financial needs?

if thats the case, i would think your recommendation will be to up the monthly DCA by another say 60% while the IWDA and ES3 are still considerably "low cost" as of now... And the balance funds to start with MBH now?
So let's suppose you want that 70%-30% split at your current age, just for sake of argument. So you'd do something like this:

1. For 10 months, invest a total of $11,300 per month. $7,910 (70%) goes into stocks, and $3,390 (30%) goes into bonds. If you want to round that to $7,900 and $3,400, that's fine.

The $7,900 would be split between ES3 (or G3B) and IWDA (or VWRA), so let's suppose that's $3,000 into ES3 (or G3B) and $4,900 into IWRA or VWRA since you said you want to split it that way (in round numbers).

2. Starting in month 11, you ease back to your regular monthly savings pace of $1,300 per month, of which $400/month goes into MBH, $600/month into IWDA or VWRA, and $300/month into ES3 (or G3B). (I'm rounding to nearest hundreds here.) Except you probably wouldn't actually buy each fund every month since there's often a minimum commission to do that, but rather you'd "batch up" your purchases. (Although MBH and G3B are available through POSB Invest Saver on a monthly basis, and that's a pretty reasonable way to buy them in this dollar amount. I think FSMOne is also pretty good. Shop around.)

3. Once or twice a year you'd rebalance. (I think once a year is fine.)

Basically to drop the whole endowment plan idea until probably when i already enter the retirement age...
Why even then?

4. As you get to about 7 years before retirement, you could start making a gradual adjustment to shift the allocations away from stocks and more toward bonds so that, by retirement age, you're at something like a 30%-70% split (stocks v. bonds). But you'd use and keep the same funds. Then, in retirement, you'd have a pool of assets to draw from gradually.
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