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a4973 29-06-2018 10:28 AM

Quote:

Originally Posted by tangent314 (Post 115203604)
I'd recommend learning to use the TVM calculator, it's really helpful with a lot of situations. You are getting a rate of about 2.4% between age 53 and 85, then about 3.31% between 85 and 100. It's ok, but you can easily do much better and get more flexibility on how and when you want to take your money out. But first of all you need to ask yourself, what your intention with this plan? Is it to save for your retirement spending?

my intentions are two-fold.
for retirement spending & a legacy for my child how is 10 this year
but then again the BI numbers are always a projection never a guarantee which makes a decision whether to continue but withdraw coupons , continue & redeposit coupons or surrender & exit so hard to make.
what should one consider to make the above decision?

tangent314 29-06-2018 10:48 AM

The decision is easy, just need to ask yourself: Can you get better rates elsewhere? Answer is a pretty easy yes. Since it is for retirement and inheritance, CPF is the obvious conservative place to put the money into.

foozgarden 29-06-2018 11:17 AM

Quote:

Originally Posted by BBCWatcher (Post 115201100)
I, personally? I’m a U.S. person, so all of those (IWDA, ES3, A35) are inappropriate for me.

I’m not a huge fan of A35. SSBs are likely better when you’re starting out. You and a spouse/partner can amass $200K of them, and that’s 20% of a $1 million household portfolio, so that’s a lot. (And I think it’s reasonable to count most of CPF as the bond-like part of your portfolio.) Past that you could take a look at some mix of Singapore government bonds (medium term, initial auction, held to maturity), A35, and the London-traded fund CORP. I really wish there were an investment grade, low cost, corporate, Singapore dollar bond index fund available, but evidently the SGD bond market is too thin for that. :(


The answer is going to be different depending on whether you’re a non-Singaporean PR expecting to retire in Singapore (or LVTP-holding spouse of a Singaporean or PR with the same expectation), or somebody expecting or required to retire elsewhere.

If you’re expecting to retire in Singapore then you apply a “Singapore skew” around the edges. Your bond and bond-like holdings have a Singapore dollar flavor, in particular. If you’re going to retire in another currency zone then you do things a bit differently. And, if you’re a U.S. person (or expect to be soon), then that’s another set of differences. The general principles are the same, but the specific vehicles might vary.

If you have ~20 years to retirement then yes, you should be relatively aggressively positioned. Vanguard’s “Target” funds stay in an 80-20 stock-bond split until 7 years before retirement, then they spend 7 years downshifting to a 70-30 stock-bond split, whereupon they’re designed to support 20+ years of withdrawals (a 70-30 split is a good one for a medium-to-long term income fund). If you’re a little more conservative you might start the downshifting as early as 10 years before retirement, or you might glide to 80-20 in “income mode,” or some of both. But I like Vanguard’s approach in those funds, so I’d do something like that. That’s slightly different than the traditional age-minus-percentage “rule of thumb,” but only slightly. It’s the same basic principle. So right now, with 20 years left to run before retirement, you have...what percentage of your total investments/savings in stocks or stock-like assets? (Stock-like assets would include things like REITs.)

i am a fan of SSB. provided you can get hold of it now.
i bidded for 30k for this month tranche, got only 12.5k..


whats this vanguard fund?
is it avail in sgp? ticker symbol?hows this vs IWDA?

wisely98 29-06-2018 11:25 AM

ETFs for income distribution
 
Hi BBCWatcher,
Will like to get your thoughts on the kind of the ETFs (equities or bonds) for income distribution? Someone mentioned QL3 in an earlier post. Am in semi-retirement phase and looking at ways to generate passive income to help defray living expenses. Thanks so much for your write-ups!

maple96 29-06-2018 12:56 PM

Quote:

Originally Posted by a4973 (Post 115203716)
my intentions are two-fold.
for retirement spending & a legacy for my child how is 10 this year
but then again the BI numbers are always a projection never a guarantee which makes a decision whether to continue but withdraw coupons , continue & redeposit coupons or surrender & exit so hard to make.
what should one consider to make the above decision?

I prefer to use this calculator, the effective interest rate is about 1.9+% until 47th year, thereafter it is about 3.25% (since u stop paying premiums).

That is the worst I have ever seen, a whole life policy pays better than yours which is almost WL! My WL with annual premium almost close to yours is giving me more than 4% after more than 20 years - mine is participating so room to grow. Yours looks like what is growing is the annual coupons (guaranteed) plus interest (3.25% on coupons non-guaranteed) so maturity value can only get worst than projected in the BI.

Suggest u check what is the current surrender value, pm junior lion whether he is interested to buy your policy n how much. Looks like u have not breakeven, ie lose a little of your premium. If I were u, I will sell or surrender the policy. Recently a 5 year single premium endowment gives guaranteed 2.7% pa, so much better than your 62 year policy!

This is the calculator I use http://www.calculator.net/interest-c...it=0&x=82&y=17

a4973 29-06-2018 01:26 PM

Quote:

Originally Posted by maple96 (Post 115206453)
I prefer to use this calculator, the effective interest rate is about 1.9+% until 47th year, thereafter it is about 3.25% (since u stop paying premiums).

That is the worst I have ever seen, a whole life policy pays better than yours which is almost WL! My WL with annual premium almost close to yours is giving me more than 4% after more than 20 years - mine is participating so room to grow. Yours looks like what is growing is the annual coupons (guaranteed) plus interest (3.25% on coupons non-guaranteed) so maturity value can only get worst than projected in the BI.

Suggest u check what is the current surrender value, pm junior lion whether he is interested to buy your policy n how much. Looks like u have not breakeven, ie lose a little of your premium. If I were u, I will sell or surrender the policy. Recently a 5 year single premium endowment gives guaranteed 2.7% pa, so much better than your 62 year policy!

This is the calculator I use http://www.calculator.net/interest-c...it=0&x=82&y=17

just checked the surrender value is $17k

maple96 29-06-2018 01:30 PM

Quote:

Originally Posted by a4973 (Post 115206993)
just checked the surrender value is $17k

on paper is more than 20k, so u received 3k + 17K = 20k?

U paid 14 years of premium = 21448, u likely to lose 1448? Sell to junior lion see how much more?

Never buy plans with payout if u want good returns, even if u do not withdraw the payout. Retirement plans have payout so returns not good, cannot beat CPF Life!

a4973 29-06-2018 02:07 PM

Quote:

Originally Posted by maple96 (Post 115207077)
on paper is more than 20k, so u received 3k + 17K = 20k?

U paid 14 years of premium = 21448, u likely to lose 1448? Sell to junior lion see how much more?

Never buy plans with payout if u want good returns, even if u do not withdraw the payout. Retirement plans have payout so returns not good, cannot beat CPF Life!

yes on their website i check surrender value today is $17k+
i had cashed out this year's 3k coupon

tangent314 29-06-2018 02:41 PM

So you are going to surrender the policy right? Everything points in that direction, what else do you need?

a4973 29-06-2018 03:52 PM

yes going to surrender.
thanks to all for your guidance & patience explaining

BBCWatcher 29-06-2018 04:11 PM

Quote:

Originally Posted by foozgarden
whats this vanguard fund?
is it avail in sgp?

Vanguard's "Target" series of mutual funds are available in the United States and appropriate for U.S. persons. They are index funds designed for "fire and forget" saving, since they follow a pre-determined program based on the target date. For example, if you buy (and keep buying) Vanguard Target 2035, it stays invested in index funds of 80% stocks and 20% bonds, then starting in 2028 (7 years until the target) it gradually, automatically adjusts the ratio so that it's 30% stocks and 70% bonds in 2035. From then on you use it for regular monthly withdrawals (ideally 4% or less) for retirement.

So it's all automatic, all pre-programmed. You just plow money in every month for decades, hopefully, then switch to a gradual drawdown (4% or less per year) in retirement.

Unfortunately they don't seem to be available outside the U.S., but the programs they follow are still interesting and useful references.

Quote:

Originally Posted by wisely98 (Post 115204833)
Hi BBCWatcher,
Will like to get your thoughts on the kind of the ETFs (equities or bonds) for income distribution? Someone mentioned QL3 in an earlier post. Am in semi-retirement phase and looking at ways to generate passive income to help defray living expenses. Thanks so much for your write-ups!

I don't like QL3 since it's a junk (non-investment grade) bond fund and Asia-focused, and that combination doesn't make much sense to me, particularly the former.

I think for a retiree in Singapore interested in bonds I'd mix SSBs (and potentially other SGSes, either directly or via A35), CPF (including CPF LIFE income), and (with some care) the London-listed ETF with the symbol CORP. CORP is a global investment grade corporate bond index fund, so it's higher quality with bonds denominated in a broader range of the world's currencies. And I think CORP has better trading volume/narrower bid-ask spreads than QL3 likely does. (Please check that.) And I'd probably have ~70% in bonds and bond-likes with ~30% in stocks during a long retirement drawdown phase. CORP (or QL3 for that matter) would only be a relatively small slice of the bond holdings.

Key assumptions here include retirement in Singapore and non-U.S. personhood.

wisely98 29-06-2018 04:40 PM

Quote:

Originally Posted by BBCWatcher (Post 115209632)

I don't like QL3 since it's a junk (non-investment grade) bond fund and Asia-focused, and that combination doesn't make much sense to me, particularly the former.

I think for a retiree in Singapore interested in bonds I'd mix SSBs (and potentially other SGSes, either directly or via A35), CPF (including CPF LIFE income), and (with some care) the London-listed ETF with the symbol CORP. CORP is a global investment grade corporate bond index fund, so it's higher quality with bonds denominated in a broader range of the world's currencies. And I think CORP has better trading volume/narrower bid-ask spreads than QL3 likely does. (Please check that.) And I'd probably have ~70% in bonds and bond-likes with ~30% in stocks during a long retirement drawdown phase. CORP (or QL3 for that matter) would only be a relatively small slice of the bond holdings.

Key assumptions here include retirement in Singapore and non-U.S. personhood.

Thanks BBC for the recommendation

tangent314 29-06-2018 05:54 PM

When you retire, in all likelihood you will have a super-safe high yield life annuity in the form of CPF Life. You may even have topped that up to your ERS, and still have a lot of cash left over, so the question is what do you do with the leftover?

You can play it super safe put it into SGS or SSB or A35 get maybe 2-2.5% yield, or even have it on OA/SA through shielding.

You can put it into a mixture of equities and investment grade bond funds as BBCW has mentioned.

I believe that, if you are willing to accept the risks, a high yield (aka junk) bond fund can fit into your retirement portfolio. There are a few features that makes it attractive for retirement:

* As a fund, it is safer than picking individual junk bonds that can potentially default
* You are looking at dividend yields of 5-6%
* There is capital volatility (not as high as shares), but you don't particularly care for that since you are mainly looking forward to the dividend payouts, then pass the capital on to your beneficiaries

It doesn't have to be QL3. I've suggested it mainly because it may be more convenient for a Singaporeans, being denominated in SGD, SG-domiciled and listed on the SGX. If you don't like the idea of it being Asia-focused, there are global high yield bond funds available on other exchanges.

boringLife- 29-06-2018 06:14 PM

Regarding term life do you guys purchase from agent or direct? The premium for direct is cheaper but I hope that in the event of my demise, having an agent will enable the claims process to be smoother.

foozgarden 29-06-2018 08:31 PM

Quote:

Originally Posted by BBCWatcher (Post 115209632)
Vanguard's "Target" series of mutual funds are available in the United States and appropriate for U.S. persons. They are index funds designed for "fire and forget" saving, since they follow a pre-determined program based on the target date. For example, if you buy (and keep buying) Vanguard Target 2035, it stays invested in index funds of 80% stocks and 20% bonds, then starting in 2028 (7 years until the target) it gradually, automatically adjusts the ratio so that it's 30% stocks and 70% bonds in 2035. From then on you use it for regular monthly withdrawals (ideally 4% or less) for retirement.

So it's all automatic, all pre-programmed. You just plow money in every month for decades, hopefully, then switch to a gradual drawdown (4% or less per year) in retirement.

Unfortunately they don't seem to be available outside the U.S., but the programs they follow are still interesting and useful references.


I don't like QL3 since it's a junk (non-investment grade) bond fund and Asia-focused, and that combination doesn't make much sense to me, particularly the former.

I think for a retiree in Singapore interested in bonds I'd mix SSBs (and potentially other SGSes, either directly or via A35), CPF (including CPF LIFE income), and (with some care) the London-listed ETF with the symbol CORP. CORP is a global investment grade corporate bond index fund, so it's higher quality with bonds denominated in a broader range of the world's currencies. And I think CORP has better trading volume/narrower bid-ask spreads than QL3 likely does. (Please check that.) And I'd probably have ~70% in bonds and bond-likes with ~30% in stocks during a long retirement drawdown phase. CORP (or QL3 for that matter) would only be a relatively small slice of the bond holdings.

Key assumptions here include retirement in Singapore and non-U.S. personhood.

thats a bummer..

but i think ntuc does have something like this..
though its a unit trust. so there is front end loading.
which i dont like.

Quote:

Originally Posted by tangent314 (Post 115211384)
When you retire, in all likelihood you will have a super-safe high yield life annuity in the form of CPF Life. You may even have topped that up to your ERS, and still have a lot of cash left over, so the question is what do you do with the leftover?

You can play it super safe put it into SGS or SSB or A35 get maybe 2-2.5% yield, or even have it on OA/SA through shielding.

You can put it into a mixture of equities and investment grade bond funds as BBCW has mentioned.

I believe that, if you are willing to accept the risks, a high yield (aka junk) bond fund can fit into your retirement portfolio. There are a few features that makes it attractive for retirement:

* As a fund, it is safer than picking individual junk bonds that can potentially default
* You are looking at dividend yields of 5-6%
* There is capital volatility (not as high as shares), but you don't particularly care for that since you are mainly looking forward to the dividend payouts, then pass the capital on to your beneficiaries

It doesn't have to be QL3. I've suggested it mainly because it may be more convenient for a Singaporeans, being denominated in SGD, SG-domiciled and listed on the SGX. If you don't like the idea of it being Asia-focused, there are global high yield bond funds available on other exchanges.

hmm.. not sure if junk bonds are a good idea for a retiree.
something that offers a good night sleep for an old man will be good.

i wonder, how many pple actually has attain ERS ...


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