Aviva Myretirement

[cyberbatt]

Just to note, Structured deposits is another bad product from banks. Not recommended.

Hi Perisher,

Why do you say that structured deposits is another bad product from banks???

 

[cyberbatt]

Nonsense,...on paper it is like that but if your insurance company is unscrupulous,they can still give the non-guaranteed part lower than 4.75% projection even if par fund hits 10% by saying bonus smoothing or claims experience.

ever see this X%@X%? this is basically the yearly bonus insurance company pays out,u ever see 2.5%@2.5%? even 2%@2% is not common.

how an endowment could possibly give u a 3%-4% pa upon maturity is because of the huge bonus payable into your endowment at maturity.

you will never see a yearly 2-3% bonus credited into your yearly endowment because insurance interests or bonus is a gradually increasing gradient.

Under the benefit illustration, it is always written as projected @3.75% and @5.25% is because Life Insurance Association Singapore (LIA) sets an upper limit to projections at 5.25 per
cent, and insurers have to present a second scenario
1.5 percentage points below the maximum projection which is our 3.75%. Therefore, these @5.25% n @3.75% are just illustration and not about the insurer's confidence level of getting u the returns claimed at maturity are that high.

Also, these premium received by them are usually invested into life funds whereby fixed income instruments like bonds take up about 50% of the funds invested in order to give the guaranteed returns and the rest into riskier assets like debts, loans etc in hopes to gain more and this part comes into the non-guaranteed portion. For eg. bonds returns is 3% to the insurance company. they will not declare 3% as they will minus off the bonuses, expenses, running cost etc. the most is 1.5% returns declared.

 

[lifeishard]

Just to note, Structured deposits is another bad product from banks. Not recommended.

SD is no longer like last time which will tie u for average 10 yrs,now most banks offer tied in period of only 5 yrs. As long as you juz look at the guarantee returns and if it suits you then why not esp when returns and capital are guaranteed compared to endowment which is not anf unit trust which is not capital guaranteed?

the only risk of SD is default of the issuer so you have to be your own judge on that as SD is not cover by MAS deposit insurance.

 

[lifeishard]

Under the benefit illustration, it is always written as projected @3.75% and @5.25% is because Life Insurance Association Singapore (LIA) sets an upper limit to projections at 5.25 per
cent, and insurers have to present a second scenario
1.5 percentage points below the maximum projection which is our 3.75%. Therefore, these @5.25% n @3.75% are just illustration and not about the insurer's confidence level of getting u the returns claimed at maturity are that high.

Also, these premium received by them are usually invested into life funds whereby fixed income instruments like bonds take up about 50% of the funds invested in order to give the guaranteed returns and the rest into riskier assets like debts, loans etc in hopes to gain more and this part comes into the non-guaranteed portion. For eg. bonds returns is 3% to the insurance company. they will not declare 3% as they will minus off the bonuses, expenses, running cost etc. the most is 1.5% returns declared.

read my post carefully and tell me something i dun know?

 

[endlssorrow]

Any prudential agent able to quote prudWealth

 

[Pandule]

i'm also looking at this plan.. What i was shown was pay about 2k for 30 years.. accumulation for 5 years.. get back 12k for 10 years and then a lump sum.

I still believe 30 years down the road I still can take out your CPF money provided one just stay in 1 house for his whole life. So this aviva myretirement can supplement the CPF payout.

Some of us may say "aiyoh just buy STI ETF, ABF ETF' and sit on them for the next 30 years sure better. My point is why not both. You allocated equal amount to both. Retirement plans like this is guaranteed( bao jiak one). because we can never be sure maybe 30 years down the road there'll be such a financial crisis?

Some also say just buy SSBs. alamak. I also thought SSBs good. Imagine you hold the SSB for 10 years.. you only get back the principal amount + some interests with endownment at least you can get the principal amount back + some 3.25/4.75% bonus back. why not? SSBs and ETFs are simple interest. but endownment is compounded which adds up to a lot. ( of course you choose an endownment plan which got capital guaranteed one lor)

 

[Perisher]

SSBs and ETFs are simple interest. but endownment is compounded which adds up to a lot. ( of course you choose an endownment plan which got capital guaranteed one lor)

Since when ETF is simple interest? It's compounded. And it is likely to outdo that endowment plan 2-3times or even more.
SSB can also be compounded. It pays you the interest yearly which you can use to invest more.
http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx

Say you put 50k into the current SSB, it gives you 0.96% on the first year = $480
Use the $480 buy STI ETF, there, compound interest at work.
2nd year, it gives you 1.09% on the 2nd year = $545
Use the left over from $480+ the new $545 to buy STI, you get 3 shares by now...
Rinse and repeat.

STI has returned 7-8% annually since it started.
US indices has returned 8-10% since 1900.
http://www.stockpickssystem.com/historical-rate-of-return/

 

[Perisher]

SD is no longer like last time which will tie u for average 10 yrs,now most banks offer tied in period of only 5 yrs. As long as you juz look at the guarantee returns and if it suits you then why not esp when returns and capital are guaranteed compared to endowment which is not anf unit trust which is not capital guaranteed?

the only risk of SD is default of the issuer so you have to be your own judge on that as SD is not cover by MAS deposit insurance.

What is the average rate of return of all SD? Take into account every single fees/charges etc...?

 

[limster]

Perisher can give some advice and some explanation, but if he still doesn't understand, then perhaps overpriced structured deposits and ILPs are suitable products for him.

High fees= high profits = thanks for the dividend.

Prudential and Aviva are FTSE 100 components so make sure you are vested in VUKE
GE is connected to OCBC, so investing in ES3 good enough

etc etc..

 

[Pandule]

Say you put 50k into the current SSB, it gives you 0.96% on the first year = $480
Use the $480 buy STI ETF, there, compound interest at work.
2nd year, it gives you 1.09% on the 2nd year = $545
Use the left over from $480+ the new $545 to buy STI, you get 3 shares by now...
Rinse and repeat.

STI has returned 7-8% annually since it started.
US indices has returned 8-10% since 1900.
http://www.stockpickssystem.com/historical-rate-of-return/[/QUOTE]

Hmm. But that of buying SSBs and then using the interest to buy STI ETF is a bit too hassle for me. Haha. And I don't have 50k. Let say I use the method of buying SSBs at $500 each month( similar to endowment plan). I will have to wait till a few years later before I can gather about $300 in interest to buy a lot of STI ETF.

I PREFER automatic. That's why I still use POSB investsaver to buy STI ETF & ABF ETF.

I'm not saying endowment is the best. SSBs provide us with liquidity. But I'm all for a mixture of ETFs, SSBs, and myaviva retirement.

 

[Shiny Things]

Some of us may say "aiyoh just buy STI ETF, ABF ETF' and sit on them for the next 30 years sure better. My point is why not both. You allocated equal amount to both. Retirement plans like this is guaranteed( bao jiak one). because we can never be sure maybe 30 years down the road there'll be such a financial crisis?

Remember the 2008 financial crisis? Stocks went down and bonds went up.

Anyway. The reason you don't hold both a stocks-and-bonds portfolio and an endowment plan is that you're doubling up on bond risk there. The insurers' endowment portfolios take your money and invest it in bonds - so the return you're getting is the same as if you'd invested in a bond ETF or unit trust, but you're locked in for 20 years with huge penalties if you need to break. That's a shïtty deal!

Some also say just buy SSBs. alamak. I also thought SSBs good. Imagine you hold the SSB for 10 years.. you only get back the principal amount + some interests with endownment at least you can get the principal amount back + some 3.25/4.75% bonus back.

This is the weirdest thing I've ever read. If you hold either one of those things for 10 years, you'll get the principal back plus some bonus. Whether they call the bonus "interest" or a "bonus", it still works the same way.

Also you know those 3.25% and 4.75% numbers are just guesses, right? They're not saying "this is what you'll make if you invest with us", they're saying "this is what you could make if you made 4.75% per annum". They're not promising 4.75%. They're not promising anything. It's an advertising trick.

 

[Shiny Things]

SD is no longer like last time which will tie u for average 10 yrs,now most banks offer tied in period of only 5 yrs. As long as you juz look at the guarantee returns and if it suits you then why not esp when returns and capital are guaranteed compared to endowment which is not anf unit trust which is not capital guaranteed?

Most structured deposits give you lousy returns because the banks rip huge hidden fees out of them. A couple of years ago there was a fad for 6-year structured deposits that yielded less than 5-year Singapore government bonds.

And not all structured deposits are 100% capital-protected. There are a lot of equity autocallable deposits out there that are capital-protected unless one of the underlying stocks drops by 30% or something like that.

the only risk of SD is default of the issuer so you have to be your own judge on that as SD is not cover by MAS deposit insurance.

Not true. There's market risk if you have to cash out early. There's reinvestment risk if you get early-redeemed on the deposit. There's even the risk of the collateral blowing up (though this is rarer these days, but the thing that took down the Pinnacle Notes back in 2008 was the collateral blowing up, not the actual deposit itself blowing up).

 

[Perisher]

Hmm. But that of buying SSBs and then using the interest to buy STI ETF is a bit too hassle for me. Haha. And I don't have 50k. Let say I use the method of buying SSBs at $500 each month( similar to endowment plan). I will have to wait till a few years later before I can gather about $300 in interest to buy a lot of STI ETF.

I PREFER automatic. That's why I still use POSB investsaver to buy STI ETF & ABF ETF.

I'm not saying endowment is the best. SSBs provide us with liquidity. But I'm all for a mixture of ETFs, SSBs, and myaviva retirement.

I'm gonna say you sound like an agent.
Anyway, please don't buy SSB at $500/mth, but at a higher rate as the $2 fee eats up a bit of the returns so the higher you buy SSB, the more worth it.

Also, even insurance policy isn't automatic, you would need/want to see your advisor every year, waste a few hours. Instead of doing that, might as well spend a few minutes to buy SSB every year. Use the interest to buy STI every year.

 

[Pandule]

haha I'm not.. even though my insurance agents join them in the industry.

to me, what you guys said also make sense. i also think buying stocks and bonds etfs will go a long way.

But i'm also a bit humji. so the endowment or retirement kind of plans where the returns is guaranteed also helps.(for my case)

 

[Perisher]

haha I'm not.. even though my insurance agents join them in the industry.

to me, what you guys said also make sense. i also think buying stocks and bonds etfs will go a long way.

But i'm also a bit humji. so the endowment or retirement kind of plans where the returns is guaranteed also helps.(for my case)

The bonds component is the guaranteed, SGS SSB is the guaranteed. Both ranges 2-3%... ILP/Endowment/SD won't guaranteed anything more without a bunch of conditions.
Anything more, put in stocks/etf. Get a term policy with CI.

Doesn't that already cover everything?

 

[Pandule]

the confirmation that insurance will pay me a certain amount over like 10 years?.

with stocks and bonds theres still lies a certain unpredictability of what will happen in 40 hours.

but there will always be two sides to it. ( aka if stocks and bonds really cui insurance will also cui, or need to be bailout). that's why to me I go 50-50 each so as to reduce and mitigate the risk of 1 side.

 

[gensity]

Policy term: 38
Premium term: 23
Guaranteed monthly: $850 from age 61 to 70
Yearly gotta paid: $2930

thus total paid: $67390
Return for 10yr is: $10200

so-called profit is :$34610
exclude bonus.

How is it? Good to go?

 

[Perisher]

the confirmation that insurance will pay me a certain amount over like 10 years?.

with stocks and bonds theres still lies a certain unpredictability of what will happen in 40 hours.

but there will always be two sides to it. ( aka if stocks and bonds really cui insurance will also cui, or need to be bailout). that's why to me I go 50-50 each so as to reduce and mitigate the risk of 1 side.

SGS SSB won't go up and down. It's 100% capital guaranteed. Most bonds when held to maturity does that too. A35 is unique in that it isn't just a bond but a ladder bond.

 

[Pandule]

oh wow. I went to calculate if let say you every year december buy 3k worth of SSBs. for 10 years

for the SSBs, from year 2 onwards. you get bonus of $28.8 to $807 and then slowly drop to 0 for year 20(when you get back the 10th year 3k SSB money).

Overall interest will be 8k. definitely more than the total interest given up the insurance company.

wow.. not getting any endowment plans haha.

but dont know why. i still might get myretirement(for ease of mind) haha.

 

[Perisher]

oh wow. I went to calculate if let say you every year december buy 3k worth of SSBs. for 10 years

for the SSBs, from year 2 onwards. you get bonus of $28.8 to $807 and then slowly drop to 0 for year 20(when you get back the 10th year 3k SSB money).

Overall interest will be 8k. definitely more than the total interest given up the insurance company.

wow.. not getting any endowment plans haha.

but dont know why. i still might get myretirement(for ease of mind) haha.

Told you long ago, endowment is near pointless. But since you are so adamant about wasting $$ despite knowing it has not much purpose, go ahead.