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Old 13-04-2019, 02:54 PM   #1156
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Yes, similar offers are available from insurance companies in Singapore -- the various savings and retirement plans they offer, with their guaranteed and non-guaranteed returns, and with varying credit ratings among the insurers -- some higher quality than others. The key difference is that the U.S. financial markets are bigger, more efficient, more transparent, and more competitive. So the deals on offer there are going to be better value deals all around.

A roll-your-own strategy is to use the options/futures markets to insure against particular downside risks -- the most severe ones anyway. But that's not free, of course, and you have to be careful about counterparty risks, as always. It's analogous to what companies in Singapore do in their currency hedging.

Shiny Things answers a lot of these questions, and as a generalization he's not a fan of such insurance. You really don't need such insurance if you simply follow "old fashioned" long-term investment principles.
Thank you, BBC! I agree with you that the products offered here in SG have too low returns.

Then it is clear. Lets stay the "old fashioned" course! Thank you.
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Old 14-04-2019, 12:01 AM   #1157
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Hi BBC,

Some questions and hope u could help on it.

When we do a fast transfer from local bank to IB, how Long does it take before the fund reaches our IB account which then we could trade it?

Secondly, there are some financial bloggers (agent) who strongly goes against ETFs like STI, IWDA, EIMI etc and claims that buying a product from the agent and let him actively manage it will yield a lot a lot higher returns and even with lower risk than the ETFs, do you think these are worth any consideration or speaking from a Long term investment portfolio view, we should just ignore these agents and stick to IWDA etc?
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Old 14-04-2019, 02:51 AM   #1158
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When we do a fast transfer from local bank to IB, how Long does it take before the fund reaches our IB account which then we could trade it?
From my experience, about 1 hour during US office hours

Secondly, there are some financial bloggers (agent) who strongly goes against ETFs like STI, IWDA, EIMI etc and claims that buying a product from the agent and let him actively manage it will yield a lot a lot higher returns and even with lower risk than the ETFs, do you think these are worth any consideration or speaking from a Long term investment portfolio view, we should just ignore these agents and stick to IWDA etc?
Generally I would pay very little attention to obvious self-serving articles. It's like oil companies writing articles about how bad electric cars are.

In case you haven't noticed, people advocating passively managed funds don't have anything to gain from their recommendation.
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Old 17-04-2019, 06:23 PM   #1159
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U.K. Resident for 3+ Months Between 1992 and 2008?

If you lived in the United Kingdom for at least 3 months any time between 1992 and 2008, even as an international student, then keep an eye on this Web site:

https://mastercardconsumerclaim.co.uk

The plaintiffs in this lawsuit against Mastercard won an important court appeal, so there's a reasonable chance they could win damages in the end. If the case is ultimately resolved in the plaintiffs' favor, you could be eligible for up to £300 in free money from Mastercard.

Check the Web site periodically to see what progress has been made, if any. Retain any proof you have that you resided in the U.K. during the time period described on the Web site and any purchase-related records, such as debit/credit card statements. The case is known as "Merricks v. Mastercard," and it's one of a new breed of class action lawsuits that are now possible in the United Kingdom thanks to the Consumer Rights Act 2015.
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Old 18-04-2019, 01:19 PM   #1160
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Hi BBCW,

this is my first post, I have been following Shiny Things and you for the longest time. I want to check with you, how or what do I read from IBKR reports on my performance for IWDA for the past 1 year or so? TIA!
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Old 21-04-2019, 11:36 AM   #1161
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I want to check with you, how or what do I read from IBKR reports on my performance for IWDA for the past 1 year or so?
Interactive Brokers offers a rich set of custom account statements you can run. Log into the account management (or client portal) section, and you should find the statements section.
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Old 21-04-2019, 11:43 AM   #1162
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Having Trouble Saving?

The BBC reports on some interesting “tricks” you can apply to encourage yourself to save consistently. Researchers in India trialed a “two envelope” scheme. Workers were paid the same wages but split into two envelopes, one with a picture of their children on it. Sure enough, the workers who received their pay split into two envelopes were more reluctant to rip into their children (literally), and they saved more.

You can use the same technique. Pay yourself first — i.e. make the savings portion automatic, using automatic FAST or GIRO deductions, for example — and then attach a photo that’s meaningful to you to that account. It could be a tiled mosaic photo of your first home (if you’re saving for a down payment), with each square filled in as you make progress to your goal. It could be a picture of your child or grandchild, as in the Indian experiment. Or maybe a photo of your parents or grandparents enjoying their retirement in some lovely setting. Whatever works for you.

I recommend doing the same thing with credit cards, by the way: put them on automatic full balance monthly GIRO.
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Old 23-04-2019, 06:47 PM   #1163
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BBCWatcher's Relatively Simple Guide to CPF

Updated April 23, 2019

Here's my simple, general advice on getting the most out of CPF. Exceptions sometimes apply, but this advice is how I would optimize CPF over a lifetime in the majority of cases.

Now

1. Make a CPF nomination. Update your nomination if/as needed.

Early Working Career

2. Make top ups to your own MediSave Account if you qualify for tax relief. MA top ups must fit within both the Basic Healthcare Sum and the CPF Annual Limit.

When You Have a Medical Expense

3. If your MA has reached the Basic Healthcare Sum, if you have a MA payable medical expense, and if you can make a MA top up with tax relief, try paying the medical bill with MA then immediately top up MA. Otherwise, consider paying in cash so you can collect a credit card rebate (for example) and also avoid losing any MA interest.

Early to Mid Working Career

4. In late January every year, make a $7,000 top up to your own Special Account if you qualify for tax relief. Your top up must fit within the Full Retirement Sum.

5. In late January every year, make another $7,000 top up to a qualified family member's (such as a nonworking spouse's) Special Account or Retirement Account if you qualify for tax relief. This top up must also fit within the Full Retirement Sum (for tax relief).

6. If you have at least some Ordinary Account dollars piling up that you won't need specifically for housing, transfer them to your Special Account in every month you have an excess. All such transfers must fit within the Full Retirement Sum and are only possible before your 55th birthday.

7. If you have Ordinary Account dollars still piling up, and if your Special Account has reached the Full Retirement Sum, consider participating in the CPF Investment Scheme (OA) using the lowest cost trustee and a prudent, low cost investment choice.

8. Don't forget your spouse! For example, if your spouse hasn't yet qualified for maximum CPF bonus interest, try to help him/her out.

Just Before You Take a HDB Loan

9. Consider transferring your (and your spouse's) OA dollars above $20,000 to your Special Account if you wish to avoid the "HDB sweep."

As You Approach Your 55th Birthday

10. Consider repaying some or all of the Ordinary Account funds you used for housing, preferably at least the Full Retirement Sum less $40,000.

11. Consider using the Special Account "shielding" technique so that your new Retirement Account is funded primarily from Ordinary Account dollars.

On Your 55th Birthday

12. If you want to withdraw some funds, do it on your 55th birthday from your Ordinary Account while your Special Account "shield" is raised.

13. Consider topping up your new Retirement Account to the Enhanced Retirement Sum.

In Your Golden Years

14. If you'd like an attractive place to park some funds, consider making an "all three" CPF contribution into your OA/SA/MA. If your MA has reached the Basic Healthcare Sum then that portion of your contribution will spill over into your SA (if you haven't reached the Full Retirement Sum yet) or OA. This contribution must fit within the CPF Annual Limit.

15. Unless you're in poor health and/or in financial distress, start your CPF LIFE payouts at age 70 on the Escalating Plan.

16. Don't make your loved ones wait for a bequest that might never come if you merely live past a certain age. With your foundational standard of living assured with ERS-level CPF LIFE, age 70 payout start, Escalating Plan, be generous to your loved ones right away, while you're still around for shared enjoyment. If they'd like to invest your gifts into prudent long-term investments, sometimes including CPF, that's great. And/or education, a down payment on a house, starting a new business, etc.

When You're a New Singapore Permanent Resident

17. The above advice applies, but (if able) you should slam lots of dollars into CPF especially during the first couple years when you're subject to reduced compulsory contributions and have more room below applicable limits.

If You're a U.S. Person (or Become One)

18. CPF is still attractive, but you should completely avoid the CPF Investment Scheme due to PFIC complications. You'll need to report your employer's share of CPF contributions as earned, non-excludable income. All interest credited across all CPF subaccounts should be reported every year and is U.S. taxable. Thus there is no U.S. tax on CPF withdrawals (except for the final bit of interest) since all the income and interest is reported and taxed as/when it flows. CPF should be reported annually in FinCEN Form 114 ("FBAR") and IRS Form 8938 ("FATCA"), as applicable. CPF may effectively reduce your U.S. Social Security retirement benefits via the Windfall Elimination Provision (WEP). Be aware of such impacts and plan for them.

If You Become a Tax Resident of Another Country

19. Singapore has very few tax treaties with other countries, and in most cases CPF (and your other assets and income) will fall under the tax system of your country of residence without any special considerations or favors. Report and pay taxes according to the tax laws and tax rules in your country of residence.

If You Have an Elder with Little or No Retirement Savings

20. Deposit some dollars into his/her Retirement Account to boost his/her lifetime income.
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Old 23-04-2019, 07:24 PM   #1164
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Hi bbc, how would you approach retirement drawdown for someone with both a boglehead style portfolio of stock + bond, and a healthy, ers level cpf stash?

I know a safe drawdown rate from the stock /bond portfolio would be 3% pa, but is there any adjustments that should be made when accounting for cpf life pay outs that begin at 65-70 years of age?
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Old 23-04-2019, 08:00 PM   #1165
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Hi bbc, how would you approach retirement drawdown for someone with both a boglehead style portfolio of stock + bond, and a healthy, ers level cpf stash?

I know a safe drawdown rate from the stock /bond portfolio would be 3% pa, but is there any adjustments that should be made when accounting for cpf life pay outs that begin at 65-70 years of age?
If you have a CPF LIFE payout stream in your pipeline, especially if it's an Escalating Plan stream, and if you feel 3%/year is a safe rate of drawdown, then you can "front load" (pull forward) the drawdown somewhat. In other words, you should be able to exceed 3%/year before starting CPF LIFE payouts if you're then going to aim below 3%/year thereafter.

But it's not 3.5%/year before and 2.5%/year after, for example (+0.5% before, -0.5% after). When you "front load" a drawdown you're giving up some future yield. You should take that into account.

The Escalating Plan can be helpful because it's the most "back loaded" CPF LIFE payout stream, meaning it allows you to be that much more "front loaded" when drawing down from other assets.

Of course you're not required to spend accumulated wealth, although (as I often suggest) it's quite nice to give more earlier to others, such as to loved ones and to charities.
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Old 24-04-2019, 05:31 PM   #1166
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Hi BBCWatcher, I am keen to get VDTY - Vanguard USD Treasury Bond UCITS ETF from LSE using IB. I am a Singaporean, not a US citizen or PR.

I am concerned that there may be a foreign withholding tax there. From my limited understanding, there should not be withholding tax for USD Treasury Bond directly.

However, I am not sure for US bond ETF though. Do you have any idea on the above-mentioned?
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Old 24-04-2019, 05:45 PM   #1167
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This one seem to have lower costs:
https://www.ishares.com/uk/individua...ucits-etf-fund

The fund managers do not pay any withholding tax for the bonds, and you don't pay any tax on the fund, so there is no tax at all.
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Old 24-04-2019, 05:46 PM   #1168
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Hi BBCWatcher, I am keen to get VDTY - Vanguard USD Treasury Bond UCITS ETF from LSE using IB. I am a Singaporean, not a US citizen or PR.

I am concerned that there may be a foreign withholding tax there. From my limited understanding, there should not be withholding tax for USD Treasury Bond directly.

However, I am not sure for US bond ETF though. Do you have any idea on the above-mentioned?
Check the prospectus, but I think you're OK in that respect.

VDTY is a distributing fund. If you prefer an accumulating fund that holds similar maturity U.S. Treasuries, take a look at CBU0 (Blackrock iShares). The expense ratio is slightly higher (0.20% versus 0.12%), but you avoid broker commissions if you're reinvesting dividends. And VDTY distributes dividends monthly, so there are a lot of dividends to reinvest. Both VDTY and CBU0 are relatively small funds, so trading volumes will be low. However, CBU0 is bigger, so it should have narrower bid-ask spreads and be somewhat less dependent on the market makers.

Why do you want VDTY, though? If you're betting on a U.S. recession that market consensus hasn't already priced in fully, there might be some better ways to place such a bet.
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Old 24-04-2019, 05:47 PM   #1169
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This one seem to have lower costs:
https://www.ishares.com/uk/individua...ucits-etf-fund
It does, but VDTY holds longer maturity Treasuries (average about 8 years to run). CBU0 is its direct competitor.
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Old 24-04-2019, 06:21 PM   #1170
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Hi BBCW, what are your views on the better ways to bet that market hasn’t fully priced in the recession ? Would be interested to have your thoughts

Check the prospectus, but I think you're OK in that respect.

VDTY is a distributing fund. If you prefer an accumulating fund that holds similar maturity U.S. Treasuries, take a look at CBU0 (Blackrock iShares). The expense ratio is slightly higher (0.20% versus 0.12%), but you avoid broker commissions if you're reinvesting dividends. And VDTY distributes dividends monthly, so there are a lot of dividends to reinvest. Both VDTY and CBU0 are relatively small funds, so trading volumes will be low. However, CBU0 is bigger, so it should have narrower bid-ask spreads and be somewhat less dependent on the market makers.

Why do you want VDTY, though? If you're betting on a U.S. recession that market consensus hasn't already priced in fully, there might be some better ways to place such a bet.
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