retirement income

[mousepad_88]

Hi, i will like to ask what kind of retirement saving plan that you guys have ? I am actually looking for a plan that provide for regular stream of monthly income after I retire but not sure which plan are good right now.

 

[Perisher]

Hi, i will like to ask what kind of retirement saving plan that you guys have ? I am actually looking for a plan that provide for regular stream of monthly income after I retire but not sure which plan are good right now.

FA's insurance plans avalanche coming in. Wait for it.

Mine is BTIR, buy term invest the rest. It's a plan that's free and requires little work.

 

[highsulphur]

Hi, i will like to ask what kind of retirement saving plan that you guys have ? I am actually looking for a plan that provide for regular stream of monthly income after I retire but not sure which plan are good right now.

Actually I hate to say this but if annuity is what you are looking for, CPF Life is probably the best choice at the moment. Otherwise people would have applied to cpf to swap their cpf life with private annuity.

 

[wts2013]

hahaha, ya lor, CPF gives u lifetime security compared to other insurers, even if u can find one better than CPF Life, u will likely not be able to sleep well worrying whether the insurer can survive as long as chiu, hahaha

 

[mousepad_88]

FA's insurance plans avalanche coming in. Wait for it.

Mine is BTIR, buy term invest the rest. It's a plan that's free and requires little work.

i currently buy term and invest the rest at the posb sti etf fund and also mutual funds. not sure if thats enough

 

[mousepad_88]

hahaha, ya lor, CPF gives u lifetime security compared to other insurers, even if u can find one better than CPF Life, u will likely not be able to sleep well worrying whether the insurer can survive as long as chiu, hahaha

ok thanks for the feedback, it seems like that is no need for annuity with CPF life.

 

[Perisher]

i currently buy term and invest the rest at the posb sti etf fund and also mutual funds. not sure if thats enough

Switch to scb asap because it saves you a few % each time you buy.

 

[djchris]

i currently buy term and invest the rest at the posb sti etf fund and also mutual funds. not sure if thats enough

Read up on safe withdrawal rates and decide what % are you comfortable with. http://www.bogleheads.org/wiki/Safe_withdrawal_rates

Then just plan backwards to see how much you will need.

 

[matrix05]

ok thanks for the feedback, it seems like that is no need for annuity with CPF life.

Totally agree. CPF already buy annuity for you. IF still got some spare money, buy some blue chips/ REIT. Add up should be enough for daily expenses.

 

[limster]

Hi, i will like to ask what kind of retirement saving plan that you guys have ? I am actually looking for a plan that provide for regular stream of monthly income after I retire but not sure which plan are good right now.

Target $1m share portfolio at age 65 returning 4% p.a., so you get $40,000 dividends a year.

This is possible due to compounding - use a compounding calculator, $1,000 a month for 35 years at 5% should hit the $1m mark.

35 years meaning from age 30-65 - people usually start work in their 20s, but don't have enough salary to invest in their 20s so I am conservative - if you are able to start in your 20s, even better, the $1m target is more achievable.

But in your 30s, you should hopefully have gotten your first job promotion, a bit more salary, able to set aside $1k a month for investment).

If your flat is fully paid up, and you have hospitalisation insurance and basic eldershield, this should be enough. Furthermore, you can pass on your shares to your children unlike other plans which stop when you die.

 

[reinphd]

Target $1m share portfolio at age 65 returning 4% p.a., so you get $40,000 dividends a year.

This is possible due to compounding - use a compounding calculator, $1,000 a month for 35 years at 5% should hit the $1m mark.

35 years meaning from age 30-65 - people usually start work in their 20s, but don't have enough salary to invest in their 20s so I am conservative - if you are able to start in your 20s, even better, the $1m target is more achievable.

But in your 30s, you should hopefully have gotten your first job promotion, a bit more salary, able to set aside $1k a month for investment).

If your flat is fully paid up, and you have hospitalisation insurance and basic eldershield, this should be enough. Furthermore, you can pass on your shares to your children unlike other plans which stop when you die.

very conservative and good plan. it is VERY POSSIBLE to hit 1m for retirement and $3k a month from divvy should be quite comfortable depending on your lifestyle, assuming debt free by then. can probably travel every month or staycation every weekend.

To add on, assuming you're going to earn more in your 30s, allocate more to investment so your retirement age will be brought down from 65

 

[af7680]

very conservative and good plan. it is VERY POSSIBLE to hit 1m for retirement and $3k a month from divvy should be quite comfortable depending on your lifestyle, assuming debt free by then. can probably travel every month or staycation every weekend.

To add on, assuming you're going to earn more in your 30s, allocate more to investment so your retirement age will be brought down from 65

sounds really good . wish I have known and started investing earlier !

 

[FP_IFA]

There is the issue of inflation we need to take into consideration here. Now $40,000 might look like a big number but if it is 35 years down the road, $40,000, based on a modest 2.5% inflation, would be worth less than $17,000 in today money. This means you would actually be getting less than $1.5k per month. And also remember inflation don't stop at age 65. If it is only worth $1.5k when you are age 65, what is it worth when you are 85?

 

[antonpoh]

Actually I hate to say this but if annuity is what you are looking for, CPF Life is probably the best choice at the moment. Otherwise people would have applied to cpf to swap their cpf life with private annuity.

That is if gahmen can keep their promise and keep the payout age at 65 and not raise it 67 or 72 down the road.

And if later they say because of inflation need to raise the minimum sum, then how?

If the amount set aside for CPF Life start at 50, we could get even better payout a 62 or 65.

 

[reinphd]

sounds really good . wish I have known and started investing earlier !

I started too late too. but better late than never

There is the issue of inflation we need to take into consideration here. Now $40,000 might look like a big number but if it is 35 years down the road, $40,000, based on a modest 2.5% inflation, would be worth less than $17,000 in today money. This means you would actually be getting less than $1.5k per month. And also remember inflation don't stop at age 65. If it is only worth $1.5k when you are age 65, what is it worth when you are 85?

Now this is the real stuff. factoring inflation is scary but true. 35 years from now who knows what the value is going to be like. a projection of that 2.5% inflation will make the $40k becomes $17k and even if you have $1m, you only have probably $1k+ to spend each month then from divvy. enough? you decide

 

[djchris]

I started too late too. but better late than never



Now this is the real stuff. factoring inflation is scary but true. 35 years from now who knows what the value is going to be like. a projection of that 2.5% inflation will make the $40k becomes $17k and even if you have $1m, you only have probably $1k+ to spend each month then from divvy. enough? you decide

But investments should grow more than inflation as well. At least, that's the plan.

 

[reinphd]

But investments should grow more than inflation as well. At least, that's the plan.

yeah, the 40k divvy was someone compounded 5% pa with 1k/month vested. inflation eats into that 5%. let's hope the capital gain + reinvestment will beat that by a few more % points cheers to all investors here

 

[FP_IFA]

That is if gahmen can keep their promise and keep the payout age at 65 and not raise it 67 or 72 down the road.

And if later they say because of inflation need to raise the minimum sum, then how?

If the amount set aside for CPF Life start at 50, we could get even better payout a 62 or 65.

The payout age will almost certainly shift. There is no way out of it if you understand why it was shift in the first place. It has little to do with inflation but more to do with the fact we are living longer and longer. So unless we stop living longer, the payout age will shift.

Assuming your original plan payout was meant to pay you for 30 years max and then half the population starts to live 5 years longer, it puts a big pressure on the system. If you said 1mil will last you 30 years, then you would need additional $131k to last you another 5 more years. Where is that $131k going to come from? You either solve that by making everyone retired later or reduce the payout or shift away the payout age or make everyone died earlier.

 

[djchris]

The payout age will almost certainly shift. There is no way out of it if you understand why it was shift in the first place. It has little to do with inflation but more to do with the fact we are living longer and longer. So unless we stop living longer, the payout age will shift.

Assuming your original plan payout was meant to pay you for 30 years max and then half the population starts to live 5 years longer, it puts a big pressure on the system. If you said 1mil will last you 30 years, then you would need additional $131k to last you another 5 more years. Where is that $131k going to come from? You either solve that by making everyone retired later or reduce the payout or shift away the payout age or make everyone died earlier.

The problem with CPF is that they keep increasing the payout age and minimum sum. However, they do not increase the CPF life payout.

That's the only qualm I have with the system.

If the payout age, minimum sum and payout amount increases in proportion, I'm fine with that.

 

[antonpoh]

The payout age will almost certainly shift. There is no way out of it if you understand why it was shift in the first place. It has little to do with inflation but more to do with the fact we are living longer and longer. So unless we stop living longer, the payout age will shift.

Assuming your original plan payout was meant to pay you for 30 years max and then half the population starts to live 5 years longer, it puts a big pressure on the system. If you said 1mil will last you 30 years, then you would need additional $131k to last you another 5 more years. Where is that $131k going to come from? You either solve that by making everyone retired later or reduce the payout or shift away the payout age or make everyone died earlier.

Firstly half the population won't hit 65 at the same time.

Average Life Expectancy
Male - 84yrs old
Female - 87.2yrs old

https://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/Population_And_Vital_Statistics.html

The problem with Cpeef Life is they try to start something too late. Lock 161k for 10yrs and try to support the rest of our life after 65. We already start saving since the first day we start work. If they start it at 45 or 50, they won't need to lock such huge amount.