What to do?

[RM2SSG]

Retired from work.

Coffin money of S$500,000 in cash.

Don't want to risk anything, just want constant stream of income and would like to preserve this cash for as long as possible.

What would you suggest this person do?

 

[durianseeds]

How old is this person? Any other assets or liabilities? Is this person planning to use this money solely for himself?

 

[highsulphur]

Cpf life and a35.....

 

[focus1974]

Retired.

Coffin money of S$500,000 in cash.

Don't want to risk anything, just want constant stream of incoming and would like to preserve this cash for as long as possible.

What would you suggest this person do?

2 things...
1) CPF Life
or
2) Property

pick one.

 

[RM2SSG]

How old is this person? Any other assets or liabilities? Is this person planning to use this money solely for himself?

60 years old.

There are other fixed assets and no more mortgages. However, not looking to sell the home they are living in. Happy with the HDB home and location so will stay there till passed on and willed to spouse and family.

This cash is on top of other streams of income he has. He just wanted to see what is the best way to make this 500K last longer.

 

[RM2SSG]

If can tahan a waiting period of 5 years, try TM Infinite VIP. Roughly about $1.8k/mth thereafter for life.

Thanks. Looks interesting.

5 years may be ok horizon to wait. $1.8K is probably best case scenario but it is something worth looking into more.

Appreciate the recommendation.

 

[RM2SSG]

Cpf life and a35.....

Already have CPF Life. A35 not very familiar. Will research more.

2 things...
1) CPF Life
or
2) Property

pick one.

I doubt property is a good route. Already in retirement and $500K will only pay part of the unit, meaning, will carry new liability, not so ideal for conservative retiree.

 

[highsulphur]

A35 is a bond etf that's listed on exchange. It's diversified and low cost with min credit risk associated with single name issue. Yield is btw 2-3% tax free.

I don't recommend property either

 

[Genosis]

Retired.

Coffin money of S$500,000 in cash.

Don't want to risk anything, just want constant stream of incoming and would like to preserve this cash for as long as possible.

What would you suggest this person do?

Annuity......

 

[limpoop]

Already have CPF Life. A35 not very familiar. Will research more.



I doubt property is a good route. Already in retirement and $500K will only pay part of the unit, meaning, will carry new liability, not so ideal for conservative retiree.

CPF life will start from 65 if I am not wrong, still can deferred to 70 then start.

For 500K, I will buy 2 lots of local OTC bonds paying 4% to 5%pa like DBS4.7, UOB4.7 etc

 

[elnewbie]

He might as well keep the $500k and pay himself $1.8k each month.

By buying such a product it will take 28 (23+5) years just to recover the principal without any interest.

Best option is, top up CPF to earn the 4% interest.

Separately, take advantage of the various banks savings account promotions, Bank of China gives 3.5% for the first 60k as long as you charge $500 each month to their credit card.

If can tahan a waiting period of 5 years, try TM Infinite VIP. Roughly about $1.8k/mth thereafter for life.

 

[RM2SSG]

For 500K, I will buy 2 lots of local OTC bonds paying 4% to 5%pa like DBS4.7, UOB4.7 etc

That's one workable fixed income option.

He might as well keep the $500k and pay himself $1.8k each month.

By buying such a product it will take 28 (23+5) years just to recover the principal without any interest.

Best option is, top up CPF to earn the 4% interest.

Separately, take advantage of the various banks savings account promotions, Bank of China gives 3.5% for the first 60k as long as you charge $500 each month to their credit card.

If I read the material correctly, the policy has a residual value of that single premium amount. Meaning, in the event of the insured passed on or surrender the policy (after 10 years), the insured get back either the full single premium amount or 105% on death; this is on top of the monthly pay out that the insured has received for whatever number of payment made from year 5.

As I understand, the guaranteed rate is 1.5% plus a non-guaranteed amount based on TM company's performance.

The math is too complex for me to work out a favorable breakeven point. The risk my take is the potentially low payout (of 1.5% only) and the sustainability of TM Insurance as a company.

My humble view.

 

[koja6049]

assuming spending of $2k per month, it can last around 20years.

What you want to do with your retirement savings is also based on your spending habits. If you spend $1500 it will stretch even longer

 

[kyteo79]

In my humble opinion, go and work in a very relax way.

500k keep in pocket or invest in your kids, small travel each year, relax.

Do some volunteer/charity work/drive.

 

[hogrider88]

yah. go travel. enjoy ur life lah. while park it inside fixed d and high int savings acct.

alrdy say gt other streams of income lor, want to earn till how old then enjoy wor.

 

[urbuhcs]

If i am 60 with 500k, i will put 150k in high dividend blue chips (i.e OCBC ), 200k in fixed deposit, 150k in Singapore bond. Put abit in stocks at least can withstand the pressure of inflation. With this, very unlikely you will lose out and can get pretty decent returns. I see this as very safe investment and ensure you can sleep peacefully every night.

 

[Majestic12]

In Singapore, you should never fully retire. It is a waste of your time.

Buying property is probably the worst thing he can do due to several reasons too long to explain here. Suffice to say those who blatantly recommend it as an investment class are usually vested and purchased theirs at lower prices, sometimes much lower. Price has and will always be the key to determine if an investment makes sense.

 

[RM2SSG]

Appreciate all the suggestions.

 

[wts2013]

In Singapore, you should never fully retire. It is a waste of your time.

Buying property is probably the worst thing he can do due to several reasons too long to explain here. Suffice to say those who blatantly recommend it as an investment class are usually vested and purchased theirs at lower prices, sometimes much lower. Price has and will always be the key to determine if an investment makes sense.

U dunno what it is like to retire early and do your own things, all the wonderful things

 

[durianseeds]

60 years old.

There are other fixed assets and no more mortgages. However, not looking to sell the home they are living in. Happy with the HDB home and location so will stay there till passed on and willed to spouse and family.

This cash is on top of other streams of income he has. He just wanted to see what is the best way to make this 500K last longer.

So this person has a golden goose, would he prefer that,

It lays golden eggs all the way till death, and the goose dies? Or...
Fatten and gift the golden goose to anyone of his choice, who would then decide when it would start laying golden eggs?

Which idea to "make this 500K last longer" appeals more to him?