Overseas retirement

[koxinga]

If I plan to retire overseas, is there somewhat of a concentration risk if all my retirement instruments like CPF Life and other annuity, stocks (SG only) are all in Singapore?

I have somewhat mixed views about Singapore's long term future.

 

[cscs3]

If I plan to retire overseas, is there somewhat of a concentration risk if all my retirement instruments like CPF Life and other annuity, stocks (SG only) are all in Singapore?

I have somewhat mixed views about Singapore's long term future.

How do you define long term? 10, 20 years from now or 50 years?

 

[koxinga]

40 years. I am 43, expected life expectancy is around 84 - 85 anyway.

Not expecting to give up my citizenship, but just staying somewhere else most of the time, regularly trips back to SG.

 

[d5dude]

If I plan to retire overseas, is there somewhat of a concentration risk if all my retirement instruments like CPF Life and other annuity, stocks (SG only) are all in Singapore?

I have somewhat mixed views about Singapore's long term future.

All eggs in one basket is always risky even for someone retiring in Singapore. I wouldnt hold 100% of my assets in any one country.

 

[koxinga]

Most of the conversations here on CPF don't really discuss concentration / country risks and assumes something like CPF Life can stretch all the way till the end of their mortal lives.

If I am staying a large part in Country X, would it make sense to buy an annuity or shift part of your assets in that country instead?

 

[LoUsyGamER]

I had splitted assets in different countries. One thing you might need to consider is the taxation varies across different countries.

Still planning and learning, hoping to have multiple assets for Airbnb overseas.

 

[homer123]

If I plan to retire overseas, is there somewhat of a concentration risk if all my retirement instruments like CPF Life and other annuity, stocks (SG only) are all in Singapore?

I have somewhat mixed views about Singapore's long term future.

It depends on where you want to retire. If Malaysia or nearby countries , I doubt their currencies can appreciate much against Spore.

 

[koxinga]

It depends on where you want to retire. If Malaysia or nearby countries , I doubt their currencies can appreciate much against Spore.

I am interested in the overall strategy or plan first. FX is one of the many other considerations.

 

[homer123]

I am interested in the overall strategy or plan first. FX is one of the many other considerations.

I am a dividend investor and I invest in SGX,LSE and US markets for dividend and bond interest. My monthly income from these investment cover all my expense no matter where I am ( I am flexible to retire anywhere).
As a kiasi/kiasu person, I also have high amount of cash to last till I am old enought to get my pension and CPF payout in case my above investment failed.
Lastly, my house is paid off.. If my 3 prong strategy failed , I don't know how one can retire early.

 

[BBCWatcher]

Most of the conversations here on CPF don't really discuss concentration / country risks and assumes something like CPF Life can stretch all the way till the end of their mortal lives.

If I am staying a large part in Country X, would it make sense to buy an annuity or shift part of your assets in that country instead?

If you're particularly risk averse it's an interesting question whether you should get a second escalating life annuity (preferably joint/survivor) from a high quality payer in another high quality currency. It can be difficult to do that as a practical matter, but the idea has some merit. The second life annuity wouldn't necessarily be from your retirement country.

 

[blah]

Your timeframe isn't from now until you die, its from now until you retire , so unless you're planning to retire at 85, you don't have 40 years of time frame. If you plan to retire at 60, you have 15+ years of timeframe.

You should be clear what kind of risk you are trying to address. When you talk about comparing retiring in Singapore vs a foreign country, you are primarily comparing exchange risk, where your retirement assets and retirement income are in SGD vs whatever currency your expenses will be in. So if SGD weakens vs your expenditure currency, then you are worse off (and vice versa).

Concentration risk is something else, which will affect you whether you are retiring in Singapore or elsewhere - if your retirement portfolio is entirely based on Singapore Inc's success, and Singapore Inc does poorly, as you are concerned about in the long term, then you should diversify your portfolio across other countries or regions.

 

[koxinga]

Your timeframe isn't from now until you die, its from now until you retire , so unless you're planning to retire at 85, you don't have 40 years of time frame. If you plan to retire at 60, you have 15+ years of timeframe.

You should be clear what kind of risk you are trying to address. When you talk about comparing retiring in Singapore vs a foreign country, you are primarily comparing exchange risk, where your retirement assets and retirement income are in SGD vs whatever currency your expenses will be in. So if SGD weakens vs your expenditure currency, then you are worse off (and vice versa).

Concentration risk is something else, which will affect you whether you are retiring in Singapore or elsewhere - if your retirement portfolio is entirely based on Singapore Inc's success, and Singapore Inc does poorly, as you are concerned about in the long term, then you should diversify your portfolio across other countries or regions.

Thanks.. I am not referring to the planning time frame, which is from now till my presumptive retirement age but also what happens after. Because at that age, if there was some fundamental issues with your strategy, the cost to change is probably quite high as it would be something that you had set in motion decades before.

The risk I am attempting to mitigate the economic decline of Singapore. The other is since I would be staying overseas, whether it makes sense to have an annuity in that country as another stream of income. This would also avoid the FX issues that homer123 mentioned.

 

[celtosaxon]

The risk I am attempting to mitigate the economic decline of Singapore. The other is since I would be staying overseas, whether it makes sense to have an annuity in that country as another stream of income. This would also avoid the FX issues that homer123 mentioned.

If the country is a major trading partner with Singapore, there will be at least a partial hedge… because SGD is managed against a trade-weighted basket of foreign currencies.

If it’s a major developed country, it would be a good to diversify your income streams. This is less of a concern in most developing countries.

Regardless, if you have a London based global ETF portfolio (e.g. 50% VWRA : 50% CRPA) that is valued at 25x your annual expenses, together with CPF LIFE… these alone should be sufficient for retirement in just about any country, provided you follow the safe withdrawal methodology.

 

[blah]

You can, and should, be planning to mitigate against any country's decline, whether you are retiring in Singapore or not. If Singapore declines and your portfolio is entirely Singapore based then even if you choose to retire in Singapore, you would still be worse off than if you had a diversified portfolio.

Arguably, choosing to purchase an annuity in the country which you think you want to retire in also could contribute to concentration risk as you are exposed entirely to the issuer of the annuity. Assuming that the country you want to retire in is has a lower cost of living, this could mean a lesser state of development and possibly that regulations and consumer protection may not be as strong as in a more developed country, which enhances the (admittedly low) risk of your annuity issuer going bust, but if we are mitigating the risk that Singapore might be in economic decline sometime 40 years down the road, it is not ridiculous to also consider this risk since we are looking at similar time frames.

Purchasing an annuity in this way could also create obstacles if you change your mind and choose to move to yet another foreign country, or if you choose to move back to Singapore sometime down the road, as you now have purchased a long term income stream which is in the 'wrong' currency.

 

[khee]

Assuming retirement age at 67, life expectancy to 85. I am planning my phase 1 in oversea retirement between 67 to 75. After 75, I will move back to Singapore.

Phase 1
1) Rent out my current property in Singapore to support my oversea retirement.
2) Keep my CPF intact.

Typically rental in Singapore is around $2k net. Any retirement around ASEAN region will be more than enough.
Visa wise, Malaysia give us 90days. I will use travel issuance to cover medical. Transport wise, you can easily do long term car rental. If I am lucky enough to have 2 property by 67, then the income will double.

Phase 2
1) Downsize my current property, move to smaller property
2) Used property gain to live the remaining life.
3) I will also assume PG benefit will start to apply to my age group. So medical bill will be covered better in Singapore.

I am studying the possibility to buy some property oversea but I think risk is quite high. Renting might not be that expensive. Even in Japan, if you plan to rent in Hokkiado or 2nd tier cities, the rental is not high. In my case, property will be my main retirement instrument.

 

[zoneguard]

Visa wise, Malaysia give us 90days.

I will also assume PG benefit will start to apply to my age group

Malaysia visa-free for Singaporean passports is 1 month.

The second point is stretching it - I don't think PG benefits will extend. MG benefits already below PG benefits substantially.

 

[andyhtc]

Assuming retirement age at 67, life expectancy to 85. I am planning my phase 1 in oversea retirement between 67 to 75. After 75, I will move back to Singapore.

Phase 1
1) Rent out my current property in Singapore to support my oversea retirement.
2) Keep my CPF intact.

Typically rental in Singapore is around $2k net. Any retirement around ASEAN region will be more than enough.
Visa wise, Malaysia give us 90days. I will use travel issuance to cover medical. Transport wise, you can easily do long term car rental. If I am lucky enough to have 2 property by 67, then the income will double.

Phase 2
1) Downsize my current property, move to smaller property
2) Used property gain to live the remaining life.
3) I will also assume PG benefit will start to apply to my age group. So medical bill will be covered better in Singapore.

I am studying the possibility to buy some property oversea but I think risk is quite high. Renting might not be that expensive. Even in Japan, if you plan to rent in Hokkiado or 2nd tier cities, the rental is not high. In my case, property will be my main retirement instrument.

Since you will only be overseas for a few years, I suggest not buying but renting a house.

A 2nd hand car can be quite cheap and it is easy to sell off compared to a house.

$2k rental + CPF Life should be quite comfortable beyond 67 years old, assuming hospitalisation insurance is taken care of.

 

[khee]

i still have 20+ years to go before retirement. This is just my initial planning. Things will change. Imagine if I retired this year, then my plan will not work.

 

[BrandonnC]

I plan to quit my job when I am 58 years old.
Then I plan to go stay in KL (another city similar to Spore in many aspects) say, for the next 5 years (if I feel comfortable, to extend another 5+ years or more). When I am near 70, i would consider coming back to Spore since for closer medical care.

Question is, when I am in Malaysia, should I get a local medical insurance (or equivalent) with the intention of taking care of the 'cheaper' medical care? For more serious medical care, i would have no choice but to return to Spore.

Any advice?

 

[andyhtc]

I plan to quit my job when I am 58 years old.
Then I plan to go stay in KL (another city similar to Spore in many aspects) say, for the next 5 years (if I feel comfortable, to extend another 5+ years or more). When I am near 70, i would consider coming back to Spore since for closer medical care.

Question is, when I am in Malaysia, should I get a local medical insurance (or equivalent) with the intention of taking care of the 'cheaper' medical care? For more serious medical care, i would have no choice but to return to Spore.

Any advice?

It makes sense to get local hospitalisation insurance, particularly for private hospitals.