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Old 03-02-2020, 12:37 AM   #1764
BBCWatcher
Arch-Supremacy Member
 
Join Date: Jun 2010
Posts: 11,569
OK, so now you're changing the initial situation again? You now say you have S$200K of idle cash to invest, above the S$110K in cash you've previously described?

You're under 40, and even if you retire VERY early you most likely wouldn't touch your retirement savings until at least age 60. (Why age 60? Because at age 55 you may have some CPF assets you might want to use if you're retiring that early.)

If you have a lump sum to invest for long-term savings, you shouldn't take years to invest that lump sum. You should do it in a matter of months, then continue saving. So if it's $200K to invest, OK, divide that up into 12 months if you like, which is $16,667 per month. Add your regular monthly savings flow to that -- let's suppose that's $1,000/month -- and then invest $17,667 per month for the next 12 months. Then continue at $1,000/month until retirement, adjusting your monthly savings flow upward as your career progresses and you're able to pay more to yourself every month.

Choose a portfolio allocation that's appropriate for your age and risk tolerance. A 70%-30% stocks-bonds split would be rather conservative at your age, actually, but you get to make that decision. Start adjusting the portfolio allocation when you get to about 7 years before retirement.

Let's suppose you wake up 3 months from now and IWDA (or VWRA) has fallen by 20% within the past month or two. Is that bad? No, it's fabulous! That means you're buying cheaper stocks, and who doesn't like a discounted price if you're buying? But you don't want to wait too long -- like years -- to move into your desired long-term portfolio allocations, because that's reducing the time that your money has to grow until you retire. So if you want to divide up a lump sum into 6 or 10 or 12 monthly installments, that's alright, but (for example) chewing up 6 years of your ~20+ years on a low yielding endowment plan doesn't make a lot of sense to me.
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