Funding during retirement

[Extech]

when i took housing loan the bank said housing/fire insurance was compulsory during the period of the loan so i guess most homeowners have some coverage as they will continue even after the loan expired.

but for fire, frankly, prevention is better than cure. there are many simple precautions that can be taken.

The fire insurance covers the structural aspectbif HDB, not the contents.

 

[FrostWurm]

its already discussed in the gold thread. Having physical gold on hand is important. If there is an invasion or some other disaster and you need to quickly leave the country, it's likely that your S$ will no longer be accepted. You'll need to bribe the boatman with gold or maybe rolex watches.

Not even sure if the boatmen in countries like China will accept gold bars. You probably have to WeChat pay

Or maybe bitcoin.

 

[maple96]

"fear mongering"

Life is about effectively managing your fear and greed.

Skenny have been enjoying his retirement life for more than 10 years and still going strong. I believed he has successfully managed his fear and greed to be able to do that, coupled with his 1m CPF!

Congrats Skenny!

 

[BBCWatcher]

To protect against 'national existential risks', instead of keeping some assets offshore, is holding physical gold a good option?

its already discussed in the gold thread. Having physical gold on hand is important.

I don't agree. There are many forms of portable payment.

It's important to restate that these "black swan" events are not at all likely. Obviously we cannot totally rule them out: one of them (a foreign invasion and brutal occupation) actually occurred. However, the bond rating agencies are right: Singapore is genuinely AAA in its risk profile.

The one big national existential event that did occur came with quite a bit of warning, actually -- and I suppose that's good news in a sense. The first air raid on Singapore occurred on December 8, 1941 (61 dead, 133 injured) -- right around the time Japanese forces bombed Pearl Harbor, Hawaii. (In Hawaii, on the other side of the date line, the attack was on December 7, 1941.) The Allies blew up the Johor causeway on January 31, 1942 (i.e. peninsular Malaysia was lost), Japanese troops started crossing the Strait on February 8, 1942, and Allied forces in Singapore surrendered on February 15, 1942.

It was reasonably safe to leave Singapore even through all of January, 1942, and many civilians did, especially women and children. Popular destinations were England, India, Australia, South Africa, and New Zealand. Standard forms of payment were gladly accepted, and demand for passage was reportedly pretty ordinary at least through January, 1942. But by February 11, 1942, it was definitely too late. Thousands of civilians died trying to evacuate in the last few days before surrender, and only 6 of the last 46 ships to leave made it to safety.

 

[JuniorLion]

Lol.

Almost any thread has to do with
Party A says "This is my way of funding my retirement.."
Party B comes along and says "You are dead wrong. Only my formula is correct. Do my formula, or you're dead."
Party A says "I'm fine the way I do it. Been doing it for years."
Party B says "Just because it was fine, doesn't mean it will be fine. Do my way, or you're dead."

And this repeats... no one seems to care about what the other party says. Just states his own views.

 

[SKenny]

Oh come on. A retirement plan, particularly an early one, ought to be robust against at least the calamities that have actually occurred in the past.

Let’s take the first one and call it, generally, “national existential risks.” They may not be earthquakes, but let me remind everyone that, within the living memory of many, Singapore was invaded and occupied by a foreign power. And it was brutal. This actually happened. I don’t think national existential risks are at all likely in Singapore, but they are possible — obviously, and fortunately the government understands this, is worried about it, and makes a lot of preparations to try to defend against such risks. Also fortunately, financially it’s really, really easy to prepare for such an event: if you can afford it (an early retiree surely can if it’s a viable early retirement), keep at least a “survival level” of assets offshore.


No, they don’t. Markets can also meander for months or even years — they can stay relatively flat — then start rising again. This too has actually happened; it’s historical fact.


OK, at which point you’ve likely sat out a net double digit percentage gain. This too has actually happened, a lot.

Look, I don’t think you should pile aggressively into stocks (or anything else) at current prices, but I also don’t think you should try to time markets, which is what you’re attempting to do. If you want to spend the next 20 months raising your stock portfolio from zero to 30 percent of wealth, 1.5 percentage points per month, that seems reasonable to me, as an example. If the market corrects or crashes 3 months in (let’s suppose), fantastic, you’re buying cheaper stocks.

You have something like a half century ahead of you, probably more since that’s a lot of medical innovation. I just don’t think it’s a good idea to time markets especially with that sort of time horizon.

Even if you want to be super defensive and ultra conservative there are other ways to do it. In particular, this is one of the few situations when a high quality insurance company might have something interesting to offer, even with its overheads — more interesting than bank fixed deposits, certainly.


There’s that tricky “usually” part. Wide gaps between bank interest rates and inflation have actually occurred, and sometimes for long stretches. It’s a matter of historical fact. Just search on “negative real interest rates,” and you’ll find a lot of details about this particular aspect of financial history.

Look, I don’t have any problem with anyone who wants to retire at whatever age. However, I take my own retirement plan and everyone else’s quite seriously. I “stress test” my own plan in a wide variety of ways, and it’s perfectly reasonable to test the plan against events that have actually occurred. No alien scenarios required, although global climate change, which is happening, is quite tough to test against since there aren’t close historic parallels. Nonetheless, I try. I also try to stress test on the expense side, for example the common scenario of long-term care needs, which can be quite expensive.

I am "lucky" to manage to retire young. I am happy to forgo any upside of a more aggressive investment, as long as I do not need to ever work for money for another day in my life.

FYI, after 10 years of retirement, my portfolio actually grew slightly in size despite my "non-aggressive" investment strategy.

Enuff said.

 

[SKenny]

"fear mongering"

Life is about effectively managing your fear and greed.

Skenny have been enjoying his retirement life for more than 10 years and still going strong. I believed he has successfully managed his fear and greed to be able to do that, coupled with his 1m CPF!

Congrats Skenny!

Thanks. I am just an average guy who "muddled" my way through to an early retirement.

I am here to share my view/ways and I am not here to convince those who insist on "their way or the highway".

 

[Thoreldan]

Thanks. I am just an average guy who "muddled" my way through to an early retirement.

I am here to share my view/ways and I am not here to convince those who insist on "their way or the highway".

You're too humble. How many 'average' guy can achieve that ?

 

[limster]

I am happy to live off my saving/assets. I am drawing way less than 2% per year for my expenditure. I do not mind not making any investment for a few years and just let my cash/near-cash sits (while earning interests) while waiting for opportunities.

my retirement target is not to draw anything at all but to live off the dividends/interest. but its ok if people have different strategies. just share, and let others do their due diligence on which strategy they want to follow.

 

[ocs_woodlands]

let me also wade into this thing about existential crisis..

it is important to note that modern SG (post 1819) was indeed conquered by an including force for 2 years. BUT it is also important to note that this happened in the context of a WORLD WAR.

Now if WW3 does happen, I have no doubt, there will be use of nuclear weapons (lets not kid ourselves that only 5 countries have nuclear weapons).

So an existential risk for SG is actually approx the same as an existential risk for mankind, statistically speaking...

So how does one prepare for an existential risk for mankind?

Well, I am sorry to say that no financial.instriment can do that. only a bunker and vast food resources will do I dont think US govt bonds will be worth anything when the cities are nuclear wastelands...

So.in short, IMO, using financial instruments to counter SG's existential risk is quite useless, frankly...

On the hand, for certain groups of people in certain countries, their existential risk is statistically very different compared to the risk of a nuclear warfare.

eg Indonesian Chinese.
in 1998 and many previous episodes, their existential risk came from racial riots and plain robbery and crime. So diversification of financial assets beyond Indonesia easily addresses this..eg parking money in SG.

eg rich Taiwanese.
in facing the existential risk of the event of Chinese mainland invasion, they should be buying US govt bonds..

in short, my point is that we need to, as best as we can, quantify the probability of existential risks before we blindly prescribe the same solution.

 

[ocs_woodlands]

Thanks. I am just an average guy who "muddled" my way through to an early retirement.

I am here to share my view/ways and I am not here to convince those who insist on "their way or the highway".

looking at your OA balance, it is very likely you made a killing in investments using OA.

No way anyone can reach that kind of balance on a 102k x 0.26 annual contribution basis

Mind sharing what sort of success formulae for investments?

 

[BBCWatcher]

let me also wade into this thing about existential crisis..

it is important to note that modern SG (post 1819) was indeed conquered by an including force for 2 years. BUT it is also important to note that this happened in the context of a WORLD WAR.

Now if WW3 does happen, I have no doubt, there will be use of nuclear weapons (lets not kid ourselves that only 5 countries have nuclear weapons).

So an existential risk for SG is actually approx the same as an existential risk for mankind, statistically speaking...

I don't agree with the attempted logical sequence. I can imagine many national existential risks that don't involve world wars, nuclear or otherwise, and I'm not particularly imaginative. (And I'd prefer not to describe examples, if that's OK.) I don't think any of them are at all likely, but I cannot completely rule them out.

All I'm advocating is that those with moderate or higher means diversify globally to a reasonable degree, to defend against a variety of risks including (as a small subset) national existential ones. That's it! It's easy and inexpensive to diversify one's investments globally to a reasonable degree. (For those who are below moderate means, hunker down with CPF LIFE.)

By the way, as it happens, World War II essentially sidestepped three whole continents in terms of residential safety: South America, North America, and Australia. (Let's not count Antarctica for these purposes since it's not a viable place of residence.) On a continental basis, the abnormally difficult/dangerous/deadly places to live were in Europe, Asia, and Africa.

Global climate change is, well, global. I've made some attempts to model that mounting calamity in terms of retirement planning (and beyond), but it's quite difficult since there are no great historical parallels. But I try.

 

[SKenny]

looking at your OA balance, it is very likely you made a killing in investments using OA.

No way anyone can reach that kind of balance on a 102k x 0.26 annual contribution basis

Mind sharing what sort of success formulae for investments?

I am not the guy to give advice for investment as I am a poor investor. My CPF has virtually zero investment gain as I don't use CPF other than buying my first 2 properties. So my CPF balance comes solely from CPF contribution/top-ups.

In the past, the CPF contribution limit did not apply to bonuses and I used to work for a company which pay high bonuses/AWS. So the several months of bonuses/AWS had full CPF contributions. I also top up aggressively, even during the past 10 years when I am retired.

 

[ocs_woodlands]

I am not the guy to give advice for investment as I am a poor investor. My CPF has virtually zero investment gain as I don't use CPF other than buying my first 2 properties. So my CPF balance comes solely from CPF contribution/top-ups.

In the past, the CPF contribution limit did not apply to bonuses and I used to work for a company which pay high bonuses/AWS. So the several months of bonuses/AWS had full CPF contributions. I also top up aggressively, even during the past 10 years when I am retired.

ok my apologies then..

I remember there was a Kenny nick that showed a.CPF OA 2018 interest of >25k. That of course implies a balance of > 1m. I was so impressed, the image got stuck in my mind

looks like I got the wrong Kenny...

 

[SKenny]

ok my apologies then..

I remember there was a Kenny nick that showed a.CPF OA 2018 interest of >25k. That of course implies a balance of > 1m. I was so impressed, the image got stuck in my mind

looks like I got the wrong Kenny...

I didn't say it wasn't me...

 

[ocs_woodlands]

I didn't say it wasn't me...

No wonder I thought my memory so faulty

On money matters and gossip, my memory very good one

I must say very impressive...

 

[SBC]

Power lah, SKenny Uncle!

Hope my annual interest can reach 15k soon.
Hope to reach 20k by the time I can afford to call it a day.

 

[highsulphur]

Power lah, SKenny Uncle!

Hope my annual interest can reach 15k soon.
Hope to reach 20k by the time I can afford to call it a day.

I want to grow up like uncle Kenny!

 

[SBC]

I want to grow up like uncle Kenny!

Me too!

70% to 80% of his will be very good for me, as I am spending quite a fair amount on property.

 

[hwmook]

Me too!

70% to 80% of his will be very good for me, as I am spending quite a fair amount on property.

Top up all your cash into CPF then you will get there.