Retirement Monies (In Singapore)

[iCuteCube]

Did a check at the forum and cant find a thread that specifically talk about retirement monies.

There are a lot of retirement plans in the market right now.

My question is, such products are pretty "bo hua" for a person who invest in dividend paying stocks?

Most of the plans i see, like company A guarantee up to 4.6% or so, with 100% capital guarantee at retirement age. Assuming the person bought the plan at 40 years old, retire at 65 years old, got 25 years, i am pretty sure i can stomach that risk to take the money to invest in dividend yield stocks that pay 4-7% P.A.

Why i think dividend investing is much better:
I can basically spread the risk over a few counters, like Singtel, Starhub, M1 SPH, REITs.... and many more.

And i can "store the monies" and invest slowly across different counter to spread risk, and also i can re-balance anytime i want, the flexibility is there, but its a double edged sword.

My conclusion is, if the person "understands" dividend stock, then this option is 99.99% better than retirement plans. (yes/no?)
The only risk i see is:

-Capital guaranteed at retirement age (Which I think over the long years and different stock counter, capital guarantee is easily achievable)

-Returns up to 4%+ (Which i also think over the long years, I can achieve average 4+ to 5+% P.A for 20-30 years, buying stable stocks, and keeping some war chest funds).


I don't know if this analogy is correct, anyone care to give your 2cents?

 

[Lewis.T]

DIY is almost always better. You can tailor it to your own risk appetite, and earn the returns those asset classes may give.

However, most retirement plans have the added benefit of waiver of premiums in the event of a critical illness/early stage critical illness. Something you cannot achieve with investments.

If you're fine with DIY I'd say go for it. Nobody can tell you otherwise

 

[tiny]

If the stocks tanked a couple of years prior to your retirement, who would guarantee the principal capital? In 2009, many people can't cash out and had to wait... some bite the bullet and cash out a bit at a loss for liquidity

 

[limster]

If the stocks tanked a couple of years prior to your retirement, who would guarantee the principal capital? In 2009, many people can't cash out and had to wait... some bite the bullet and cash out a bit at a loss for liquidity

If you are adopting a dividend warrior strategy, there is no need to sell your shares on retirement.

The dividends on your portfolio should be a few thousand $ every month, more than CPF Life , the idea is to live off the dividends and hand the shares over to children when you pass on.

Insurance policy terminates when you pass away. Dividend shares keep on giving after you die and your children can pass them on to your grandchildren.

 

[wahkao3]

If you are adopting a dividend warrior strategy, there is no need to sell your shares on retirement.

The dividends on your portfolio should be a few thousand $ every month, more than CPF Life , the idea is to live off the dividends and hand the shares over to children when you pass on.

Insurance policy terminates when you pass away. Dividend shares keep on giving after you die and your children can pass them on to your grandchildren.

paging for dividend warrior to teach his dividend investment strategy

 

[Dividends Warrior]

paging for dividend warrior to teach his dividend investment strategy

Ok. Here goes......

1. Buy dividend stocks and collect dividends
2. Reinvest dividends by buying more dividend stocks
3. More dividends stocks will give you more dividends
4. More dividends can then buy even more dividend stocks
5. Rinse and repeat Steps 1 to 4 diligently for at least 10 years.

 

[wahkao3]

 

[Bedokian]

It's a natural way of using money to grow money.

Soon DW will come to a stage where little injection is required but instead using the dividends to fuel the capital instead.

Then at the last and final stage (i.e. retirement) he would be using the dividends as a form of income and begin to draw down his capital.

Am I right DW?

 

[leonaheidern]

eh dun quite understand how the dividends thing works

e.g. my parents pass away and they have singtel shares and they pass to me and my sister

won't me and my sister have to sell away the singtel shares to pass the assets over and rebuy the singtel shares at a higher price (this was singtel shares 16 years ago at least so much much cheaper when my parents got them) before we can get the dividends from the singtel shares again?

 

[Shiny Things]

eh dun quite understand how the dividends thing works

e.g. my parents pass away and they have singtel shares and they pass to me and my sister

won't me and my sister have to sell away the singtel shares to pass the assets over and rebuy the singtel shares at a higher price (this was singtel shares 16 years ago at least so much much cheaper when my parents got them) before we can get the dividends from the singtel shares again?

What? No. You don't have to sell the shares if you don't want to.

You'll want to check with a probate lawyer about this, I think, but generally the shares should just pass to you or your sister depending on what your parents' will states; and then you get the dividends instead of your parents.

 

[hwmook]

eh dun quite understand how the dividends thing works

e.g. my parents pass away and they have singtel shares and they pass to me and my sister

won't me and my sister have to sell away the singtel shares to pass the assets over and rebuy the singtel shares at a higher price (this was singtel shares 16 years ago at least so much much cheaper when my parents got them) before we can get the dividends from the singtel shares again?

Nobody give a damn how much your share was bought, a share is a share, you buy and sell at market price, not the price it was bought at....

 

[limster]

Just read the CDP FAQ lor. Before investing, must be willing to read, not just go to HWZ to get stock tips.

http://www.sgx.com/wps/wcm/connect/...f+Shares/Transfers+for+Estate+of+the+Deceased

 

[Dividends Warrior]

It's a natural way of using money to grow money.

Soon DW will come to a stage where little injection is required but instead using the dividends to fuel the capital instead.

Then at the last and final stage (i.e. retirement) he would be using the dividends as a form of income and begin to draw down his capital.

Am I right DW?

Yup, you are right. That's basically my overall plan. Simple but effective.

This year, I still need to inject a portion of my salary into my portfolio. Once my portfolio hits $300k next year, it should be self-sustaining. Meaning, all the dividends I get will be re-invested. I am aiming for 7% annual dividend yield.

7% X $300k = $21k (dividends)

Compound Interest Calculator

By using the online calculator above, after 10 years of compounding, my portfolio will be close to $1m. I shall be 42 years old. That should be enough for me to retire early or at least semi-retire.

Now, some people may ask,

-What if you get married and have children?
-What if you decide to get a car?
-What if there is a market crash?

Ok. Like I mentioned earlier, I only need to re-invest my dividends. I do not need to touch my take-home pay at all. So, I can channel my entire salary and bonuses to my marriage, kids, car, warchest and emergency funds. Furthermore, if I am married, my wife can help out financially too.

I seem to make everything sounds so simple and easy. But my strategy depends critically on 2 things. Perseverance/ Patience and Starting early. When you are young, time is on your side for the compounding effect to be maximised. Read the article below to know more.

Learn About Investing Your Money at a Young Age

 

[Aerial86]

Yup, you are right. That's basically my overall plan. Simple but effective.

This year, I still need to inject a portion of my salary into my portfolio. Once my portfolio hits $300k next year, it should be self-sustaining. Meaning, all the dividends I get will be re-invested. I am aiming for 7% annual dividend yield.

7% X $300k = $21k (dividends)

Compound Interest Calculator

By using the online calculator above, after 10 years of compounding, my portfolio will be close to $1m. I shall be 42 years old. That should be enough for me to retire early or at least semi-retire.

Now, some people may ask,

-What if you get married and have children?
-What if you decide to get a car?
-What if there is a market crash?

Ok. Like I mentioned earlier, I only need to re-invest my dividends. I do not need to touch my take-home pay at all. So, I can channel my entire salary and bonuses to my marriage, kids, car, warchest and emergency funds. Furthermore, if I am married, my wife can help out financially too.

I seem to make everything sounds so simple and easy. But my strategy depends critically on 2 things. Perseverance/ Patience and Starting early. When you are young, time is on your side for the compounding effect to be maximised. Read the article below to know more.

Learn About Investing Your Money at a Young Age

Good to have someone like you around to share your personal experiences with others. The fastest way to learning is to learn through other's experience. Good Job

 

[iCuteCube]

I started this thread is because I strongly believe in the "standard" dividend investing just in Singapore market can beat any "retirement" plan in the market.

The conditions that i am referring to:

38 years of investment time frame to enjoy the "retirement income"


Comparing to D.I.Y, there is no guarantee of:
-Capital guaranteed 38 years later (Come on, this is BS, we know for 99.99% sure, 38 years investment time frame, we can at least secure our capitial)

-Guaranteed 5% and a portion of un-guaranteed bonus given yearly for 20 years at your chosen retirement age (65).


My statement to convince friends to adopt this strategy is:
-With some discipline and maybe even without knowledge, i can just advice them what dividends stock to buy, and even show them data, but i earn no $ from it, lol.

-The time frame is long, 38 years, we can always stomach more risk.

I am recommending to a good friend of mine, maybe a better idea would be opening a trading account with me having the password, and he having the token and OTP from his mobile. Without OTP i cannot do anything, and him without password, resetting would require effort, and he's pretty lazy type, that's why i am cracking my head to convince that this strategy won't earn you big bucks, but decent enough as compared to those plans available in the market, main advantage is still 38 years of investment time frame.