*Official* BBCWatcher club

[BBCWatcher]

Yes, i was referring to higher education. I have no idea whether they will go abroad n i leave it to them entirely. Also my philosophy is not to fully support them on education without any effort from themsleves.

If i want to avoid the hassle, should i just put all in MBH and dont touch it for 10yrs?

That's one reasonable idea, but just bear in mind that MBH is not principal guaranteed (if that bothers you). Over 10 years I don't think it matters, but some people freak out if/when the instantaneous valuation falls below what they put in.

If you want something ultra conservative there's a 10 year Singapore Government Security that'll be reopened for auction this June. There's also a 5 year Singapore Government Security coming up in April.

Another possible approach is to just stick with your long-term portfolio but make it a little more conservative to handle the "early" university-related distributions. Meaning you just boost the bond component a bit (MBH probably).

I looked at the insurance companies' offers and don't see anything too compelling right now.

If you think there's a decent or better chance of study abroad then you could stand pat with Singapore dollar-based vehicles such as MBH and/or SGSes (mixed in with a stock index fund if you wish in some fairly conservative ratio). Or you could mix in a foreign bond component. For example, if you think one child is probably going to study in the United States then you could mix in some amount of an accumulating investment grade U.S. corporate bond index fund listed/traded in London. This'd help give some reasonable assurance of a future U.S. dollar spending goal.

 

[chekseng80]

That's one reasonable idea, but just bear in mind that MBH is not principal guaranteed (if that bothers you). Over 10 years I don't think it matters, but some people freak out if/when the instantaneous valuation falls below what they put in.

If you want something ultra conservative there's a 10 year Singapore Government Security that'll be reopened for auction this June. There's also a 5 year Singapore Government Security coming up in April.

Another possible approach is to just stick with your long-term portfolio but make it a little more conservative to handle the "early" university-related distributions. Meaning you just boost the bond component a bit (MBH probably).

I looked at the insurance companies' offers and don't see anything too compelling right now.

If you think there's a decent or better chance of study abroad then you could stand pat with Singapore dollar-based vehicles such as MBH and/or SGSes (mixed in with a stock index fund if you wish in some fairly conservative ratio). Or you could mix in a foreign bond component. For example, if you think one child is probably going to study in the United States then you could mix in some amount of an accumulating investment grade U.S. corporate bond index fund listed/traded in London. This'd help give some reasonable assurance of a future U.S. dollar spending goal.

What would be a good foreign bond in this case? After thinking twice, i have decided to go for 60-40 for this pot of money. 40% in MBH and 60% in VWRA. Questions:

1. Do i bother with 10-20% for ES3?
2. If i were to allocate for foreign bond for 10% for example, do i take from bond or equity leg?
3. From account management perspective, this pot of money i can either keep using ibkr (my current broker) or keep it in scb (which i think is the only viable 2nd choice for SGX and LSE albeit slightly higher cost) to avoid institution risk?

 

[BBCWatcher]

What would be a good foreign bond in this case?

Which higher education country(ies) do you think should be on the list?

After thinking twice, i have decided to go for 60-40 for this pot of money. 40% in MBH and 60% in VWRA. Questions:
1. Do i bother with 10-20% for ES3?

60-40 is fairly aggressive for a ~10 year goal, but I don’t have an objection if you’re comfortable with it. I’ve been doing something similar, but I adjust that ratio to be more conservative as university gets nearer.

ES3 (or G3B) is more Singapore dollar-oriented so geared more toward a Singapore dollar spending goal (university in Singapore). Still stocks and REITs, though, so it’s volatile.

2. If i were to allocate for foreign bond for 10% for example, do i take from bond or equity leg?

Probably a little of both.

3. From account management perspective, this pot of money i can either keep using ibkr (my current broker) or keep it in scb (which i think is the only viable 2nd choice for SGX and LSE albeit slightly higher cost) to avoid institution risk?

You could, but how about FMSOne for the MBH and (if you do it) ES3/G3B parts and IB for the global stuff. I realize that makes rebalancing less convenient, but you‘d still have options.

 

[chekseng80]

Which higher education country(ies) do you think should be on the list?

Probably US but frankly speaking i am not sure. I wont say even if they wan to go to China.

60-40 is fairly aggressive for a ~10 year goal, but I don’t have an objection if you’re comfortable with it. I’ve been doing something similar, but I adjust that ratio to be more conservative as university gets nearer.

I take clues from Vanguard Target Enrollment 2033 which is also 60% equity but u r right perhaps like u always recommend to slowly moving to local bond towards nearer date.

ES3 (or G3B) is more Singapore dollar-oriented so geared more toward a Singapore dollar spending goal (university in Singapore). Still stocks and REITs, though, so it’s volatile.

Maybe a 50-50 for equity portion is better as i see STI more like a dividend/reits leg.

Probably a little of both.

You could, but how about FMSOne for the MBH and (if you do it) ES3/G3B parts and IB for the global stuff. I realize that makes rebalancing less convenient, but you‘d still have options.

I do have FSMONE for my SRS. The only thing is they have fixed $8.80 for SGX therefore for reinvestment of semi-annual dividends from MBH or ES3 more expansive.

 

[adamant_ium]

@BBCWatcher I've been searching but I can't find what exactly you dislike about private Shield plans. Shopping for one recently and an agent advised that private hospitals have shorter waiting times than public (especially at younger ages (~25)). Should I just get the Raffles private plan? or just insist on an A ward?

 

[BBCWatcher]

@BBCWatcher I've been searching but I can't find what exactly you dislike about private Shield plans. Shopping for one recently and an agent advised that private hospitals have shorter waiting times than public (especially at younger ages (~25)). Should I just get the Raffles private plan? or just insist on an A ward?

"Shorter waiting times"...

1. Do they? (N.B. Compare versus private patient queues at public hospitals.)

2. If they do, how much shorter?

3. If they do, does it matter for purposes of deciding on an insurance plan? Public hospital A ward plans still pay for a lot of care from private hospitals, and employers often toss in some medical coverage above that.

 

[adamant_ium]

"Shorter waiting times"...

1. Do they? (N.B. Compare versus private patient queues at public hospitals.)

2. If they do, how much shorter?

3. If they do, does it matter for purposes of deciding on an insurance plan? Public hospital A ward plans still pay for a lot of care from private hospitals, and employers often toss in some medical coverage above that.

I think my impression on the longer waiting times was mostly for specialist appointments (for public hospitals, seems to be about a month? don't know if that's relatively long or short). Is there corresponding info available for private hospitals? And is it true that the queue for appointments/operations is health-status based? i.e. older, less healthy patients before younger, healthier patients etc.

Unfortunately my company offers reimbursement for ISPs, and a little for outpatients(co-pay) and specialist (Co-pay and 5k cap)

 

[BBCWatcher]

I think my impression on the longer waiting times was mostly for specialist appointments (for public hospitals, seems to be about a month? don't know if that's relatively long or short)....

You can try the smartphone app(s) and look for appointment slots.

And is it true that the queue for appointments/operations is health-status based? i.e. older, less healthy patients before younger, healthier patients etc.

I doubt it, but I think it's true that it takes longer to see a specialist when you're a subsidized patient because of the need for a referral.

Unfortunately my company offers reimbursement for ISPs, and a little for outpatients(co-pay) and specialist (Co-pay and 5k cap)

If your company (employer) is going to pay the full cost of the most expensive Integrated Shield plan and rider (without complicating issues) then that specific decision (plan type) is easy.

 

[revhappy]

@BBCWatcher I remember you posted somewhere couple of months ago, that you follow some blogger who is smart and as per him Feb would be the time when yields would peak and our last chance to lock in these high yields. I just locked in to Amundi global agg index fund, just considering how much yields have risen again, after falling in Jan.

https://endowus.com/investment-funds-list/amundi-index-global-agg-500m-fund-LU2420246212
What is the blogger's view now? As inflation has been coming higher and a strong labour market, has he updated his dot plot?

 

[BBCWatcher]

I don’t recall the blogger (Kevin Drum) making an interest rate prediction or bond purchase recommendation. The U.S. Federal Reserve does whatever it does. (And other central banks too.) He’s just looking at the inflation data. January was a bit higher than trend, but we’ll see if that was anomalous or not with more data. (Singapore’s inflation in January was expected thanks to the GST hike.)

 

[revhappy]

One of my current favorite bloggers Kevin Drum makes a really good point: the U.S. Federal Reserve didn’t really start raising interest rates until its 50 basis point increase in the Fed Funds rate in May, 2022. That was only 6 months ago. He posits that we haven’t even seen any inflation fighting effects from these rate increases due to lags and won’t until about February, 2023.

If Drum is correct then you may have as little as about 3 more months to start pivoting to longer tenor bonds, to lock in elevated interest rates. Starting in February (if he’s correct) the U.S. inflation prints should be lower, and the bond markets will stop pricing in rate hikes. Translated into Singapore terms you may only have a couple more months of comparatively attractive Singapore Savings Bonds. And (assuming Drum is correct) mortgage interest rates should peak early next year then start falling…

…Or he could be wrong, but I think his basic point is correct, that we haven’t yet seen the inflation impacts of U.S. Federal Reserve rate hikes.

This is the post I was talking about.

 

[BBCWatcher]

This is the post I was talking about.

Ah, OK.

He's not really making a specific prediction about what the Fed will do. He's just looking at the inflation data, and then there's a leap of logic (faith?) that the Fed will stop tightening once it feels comfortable with inflation and inflation expectations. There are a lot of ifs in that.

 

[BBCWatcher]

Random news bits....

Home prices in the United Kingdom peaked in August, 2022 and are now falling according to the latest data for February (last month). High interest rates, low economic growth, and (perhaps) cutting off some "hot" money are all finally having an impact.

Employers of Employment Pass holders in Singapore will have to verify their employees' educational qualifications using a third party verification service starting September 1, 2023, for new EPs and starting September 1, 2024, for EP renewals.

China has relaxed its entry rules for travelers from Singapore and some other countries. A less expensive pre-departure Antigen Rapid Test (ART) is now sufficient.

 

[adamant_ium]

Ok @BBCWatcher after more research on your posts i've come to the conclusion that requesting to be treated as a private patient in the public hospital route actually is comparable to private hospitals. In that case, any caveats I should keep in mind with the Class A Ward ISPs when making the request?

 

[BBCWatcher]

Maybe.

If you go straight to a specialist without getting a referral from one of the public system’s “entry gates” (usually a polyclinic or CHAS GP) then you stay as a private patient and don’t get any subsidies for that ailment/illness. Even if it’s long-term and exceeds the Integrated Shield plan’s coverage window or coverage isn’t triggered (because it’s outpatient care and not cancer for example). So you still ought to give some thought to whether you want to be a private patient. To some extent this decision will depend on the ailment/illness and what subsidy level you qualify for.

For what it’s worth in my household we do some of both. We’ve taken the subsidized route (“polyclinic first”), but we’ve also taken the private patient route on the few occasions when speed seemed justified.

 

[meowsmeows]

hi BBCWatcher! i’m a recent fresh grad looking to complete my insurance needs. I have already bought term plan and hospitalisation plan and am currently looking into DII.

But almost all the agents that I’ve enquired on this on advised against buying DII and instead a CI plan. Their reasoning being that DII is often hard to claim because it is vague and they don’t advise it being a replacement for CI. What are ur thoughts?

 

[BBCWatcher]

My thoughts are pretty basic: most agents don't sell DII. So of course they're not going to recommend what they don't sell. AIA, Great Eastern, and Singlife are the only 3 local insurance companies that currently sell DII. (Singlife also sells the MINDEF/MHA group DII rider.)

Another question in reply: what do they recommend if you're disabled tomorrow and lose your employment income for life?

By the way, do you have any dependent(s) yet? If you do, OK, term life insurance makes sense.

 

[celtosaxon]

hi BBCWatcher! i’m a recent fresh grad looking to complete my insurance needs. I have already bought term plan and hospitalisation plan and am currently looking into DII.

But almost all the agents that I’ve enquired on this on advised against buying DII and instead a CI plan. Their reasoning being that DII is often hard to claim because it is vague and they don’t advise it being a replacement for CI. What are ur thoughts?

Have you already landed a job? The other consideration is what kind of insurance your employer might provide.

The biggest thing insurance salespeople won’t tell you is that you should only buy “just enough” insurance, only what you absolutely need.

Salespeople will tell you all sorts of nonsense — but Insurance is not an investment, it’s a protection from things you can’t afford. The two main things you might not be able to afford as a fresh grad is probably being disabled and being hospitalized. If nobody is relying on your income for their survival, then you don’t need life insurance. Anyone who says otherwise does not have your best financial interest in mind, and you should be extremely wary.

 

[meowsmeows]

My thoughts are pretty basic: most agents don't sell DII. So of course they're not going to recommend what they don't sell. AIA, Great Eastern, and Singlife are the only 3 local insurance companies that currently sell DII. (Singlife also sells the MINDEF/MHA group DII rider.)

Another question in reply: what do they recommend if you're disabled tomorrow and lose your employment income for life?

By the way, do you have any dependent(s) yet? If you do, OK, term life insurance makes sense.

Thanks for the reply! Do you think CI is necessary if I get DII? I looked through the CI list and honestly I felt that I probably will not be able to continue my occupation if I got any of them. My thinking is that DII > CI, get CI if I have spare money to spend, not sure whether I’m correct on that thought.

Regarding your second question, I don’t have any dependents yet, but as my parents are retiring soon (and their financial planning really isn’t the best), thought that it might be better to have a back up plan if anything happens to me so that burden on my siblings will be lessened too.

Have you already landed a job? The other consideration is what kind of insurance your employer might provide.

The biggest thing insurance salespeople won’t tell you is that you should only buy “just enough” insurance, only what you absolutely need.

Salespeople will tell you all sorts of nonsense — but Insurance is not an investment, it’s a protection from things you can’t afford. The two main things you might not be able to afford as a fresh grad is probably being disabled and being hospitalized. If nobody is relying on your income for their survival, then you don’t need life insurance. Anyone who says otherwise does not have your best financial interest in mind, and you should be extremely wary.

Yes I have already landed a job, my employer provides pretty standard insurance haha.

Yes I agree, insurance acts as a protection on things I can’t afford. However, I think because DII is still not that commonplace in SG so it’s quite hard to find information on the claim process and what not. Hence when the agents tell me it is quite hard to to get claims approved because reasoning is vague i find myself quite hard to rebut them haha. Most agents will try to sell me CI with ECI instead even if they sell DII (usually AIA or Singlife).

 

[BBCWatcher]

Thanks for the reply! Do you think CI is necessary if I get DII? I looked through the CI list and honestly I felt that I probably will not be able to continue my occupation if I got any of them. My thinking is that DII > CI, get CI if I have spare money to spend, not sure whether I’m correct on that thought.

I think you’re exactly correct.

Regarding your second question, I don’t have any dependents yet, but as my parents are retiring soon (and their financial planning really isn’t the best), thought that it might be better to have a back up plan if anything happens to me so that burden on my siblings will be lessened too.

Well, if (due to retirement inadequacy) your parents would be in a fairly dire financial situation if one of them were to become disabled (i.e. cannot cure their retirement inadequacy) then I think they’re already your dependents. However, there’s something else you could do: help them nail down decent or better CPF balances. You can win tax relief for $8,000/year deposits into their Retirement Accounts assuming they’re below the Full Retirement Sum. You can split that $8,000 however you wish, for example $5,000 into your mother’s RA and $3,000 into your father’s. Your siblings can do the same.

If you decide to get some CI coverage then one way to do it is to add a CI acceleration rider to your term life insurance. That allows you to draw down from the sum assured when a CI claimable event occurs. Not necessarily a recommendation, but I think it’s a reasonable way to get CI if you must get it. The other option is the Singlife MINDEF/MHA group CI rider if you’re eligible for it. That tends to be more affordable.

Most agents will try to sell me CI with ECI instead even if they sell DII (usually AIA or Singlife).

Apparently the commissions/bonuses on CI and ECI policies are higher, so there’s that.