Although CPF Life is compulsory, there are those who will not be automatically enrolled. If your age and CPF Retirement Account meets the following, you will automatically be enrolled to CPF Life. Otherwise, you stay at the Retirement Sum Scheme. What is the Retirement Sum Scheme? Under this scheme, the CPF Retirement Account will be drawndown on a monthy basis starting 65 (the minimum … [Read more...]
Property investment is illogical especially when its > 100% of networth
Update 30/11/2017: See article: MAS flags risks from 'excessive exuberance' in property market For those who has read my blog for some time is well aware that I am against the way many Singaporeans invest in properties. In this blog, I will be doing the same except that I will be providing more figures to proof that property investment is an illogical investment. Myth #1: Assuming interest … [Read more...]
The risk of using investments for retirement are often underestimated
In this article, I want to write about a little-known danger when using investments to support one’s retirement. Very often, I hear of clients using stocks and REITs as a source of income to support their retirement years. I do not have any problem with that except that they underestimate the risk of using such instruments. At the end of this article, I will show you that a portfolio of … [Read more...]
Here’s a video by a bank on how it anyhow sell Universal Life
One of my client sent me this webinar video on legacy planning. The first 11 minutes is educational and I generally agree with the speaker. So you can safely watch first 11 minutes without much harm. But after that, it started selling "koyok" - Universal Life. https://www.youtube.com/watch?v=wW89KGi5AJY The speaker uses Universal Life as a debt cancellation tool and as well as the income … [Read more...]
High networth asking govt for help because of poor financial planning
There was a letter written to the Sunday Times on 19th February 2017 about a high networth (or at least behaving like one) who was so cash scrapped that she asked whether the government can help her. Here is the letter: A few facts that can be directly derived from the letter: The writer is a retiree. The writer has two housing loans. The writer refinanced the two loans to get a … [Read more...]
Strange way of how CPF Interest is calculated & retirement planning
CPF has a rather strange way of calculating interest. In this article, I will explain how CPF interest is calculated and how you can make use of this knowledge to reduce the disadvantage of such a system. First, CPF interest is calculated on a monthly basis but it is only credited at the end of the year. The interest that is credited at the end of the year forms the new balance for the … [Read more...]
A client who spent $27,000 a year on insurances
There was an article Does it pay to stick to a big name in insurance? (Straits Times 30 Dec 2016) which asked the question whether should consumers buy from larger insurance companies in hope of getting better returns. I felt that the question is a wrong question. Insurance is meant to protect and not meant as an investment. Unfortunately, majority of the policies sold were not meant to protect … [Read more...]
Life Expectancy and the Importance of Retirement Planning
We have heard in the news that life expectancy is rising. But how much is it rising and what is the impact to retirement planning? I downloaded the statistic from Singapore Department of Statistics for life expectancy at age 65 and plotted the data on a XY graph as shown below and did a linear regression. Don’t be shocked by what you see. It seems life expectancy has been rising in a … [Read more...]
Rental income may not be enough to service property loans, warns MAS
"In particular, before investing in property, investors should be aware that rising vacancy rates, declining rentals and impending interest rate increases mean that they may not always be able to rely on rental income to service their investment property loans.", noted MAS in its latest Financial Stability Review. Source: … [Read more...]
3 ways to make your SRS work harder
It is coming to end of the year. Those who wish to save on taxes are now thinking of tax saving measures such as Supplementary Retirement Scheme or better known as SRS. By default, SRS contributions remain as cash. In fact, the majority of SRS monies are sitting idling as cash. If you wish to make the money work harder, it is necessary to invest the money. This article explains three ways on how … [Read more...]
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