Investments for the elderly

[Ryoin82]

Hi all,

I have a question concerning investments for my parents. They both have a sum of money each (around 100k) which they parked under a unit trust. This product is paying them a steady 3.5-3.9% dividend per month. As they have opted for div, the principal sum doesn't grow. I'm fact, they have lost around 10k of their principal since they bought at a high.

I am a newbie at investments but I am hoping to steer them out of unit trust due to the high management fees. But I am unsure if the etf/bond passive investment scheme is good for them, after using the 100-age formula. Basically they are retirees, risk tolerance is low and liquidity high.

Are there other products that I can look for? Something that gives them approx 3% div monthly, as they like the Income supplement.

Many thanks in advance. Much Appreciated

 

[NiteX2]

Hi, firstly I believe that the dividends they are receiving is 3.5-3.9% per year and not per month. As such, they should be receiving about $300 a month or so in dividend income.

I believe whether etf/bonds are suitable for your parents will very much depend on them, whether they are ok with the risks involved and so on. They should know that all such products, including the unit trusts that they are into, are non-guaranteed and they might gain or lose their capital depending on market conditions.

If they wish to get monthly income supplement yet do not wish to be exposed to that much risk, then endowments/annuities may suit them more. Feel free to PM me if you need any info or have any other queries

 

[wahkao3]

unit trusts are bad products
those that say they pay dividend do so by eroding your captial
dont be hard up over dividends

 

[Bedokian]

I presume the total amount is 200K, based on your wording?

3% monthly translate to 36% yearly, which I think no plain vanilla investment product is able to achieve that, or you probably meant 3% per year? If so, means that the passive income would be 200K x 3% = $6K annually. Firstly there is OCBC 360, which pays out 3.05% (subject to a limit of $50K and some conditions. Read up more at the thread). Both your parents will allocate $100K in total to this. Next up, the remaining $100K could be allocated to some good quality SGS bonds and maybe 1 or 2 good REITs, though these 2 asset classes are probably overpriced by now. Combining them may get an average of around 3-4% average.

 

[sandwicher]

If both had their CPF minimum sum achieved, just ask them to top up their SA accounts to get 4% yield and draw all of the top ups out at withdrawal age?