Retirement Planning for the Unwealthy

[BlueKelah]

Imho the most important part is to pass on financial and wealth management knowledge to the next generation, something not taught in school.

Also there is no reason not to use stocks as a retirement vehicle. Stocks will provide quarterly or yearly dividend income flow and to diversify one can do gold etf or miners rather than gold, property stocks or reits rather than resi/commercial property, and stocks of a blue chip listco rather than the bonds they issue.


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[tanjm]

Annuity for life?

There is  a "self -designed" perpetual immediate Annuity for life where the principle is intact for life if you just withdraw the the annual interest generated at every DEC.

Some people has been blogging about this type of Annuity for life in Singapore Investment Bloggers.

If you have about a $million there, the interest which can be withdrawn at every DEC is about $35,000 + - without touching the principle.

Next year, should be the same until the goal post is shifted again.

And if the market crash, you can withdraw some of the principal for fire-sale in the stock market.

What annuity or bond can beat this "self-make" annuity?

Without knowing the details of this so-called annuity, I can't say too much. However, there is no way a 1 million sum can return you 3.5% in perpetuity without risk. 

And too many people confuse insurance and investment. Take endowment plans for example. The agent asks you to "invest" 10,000 a year in return for a gauranteed 1.5% and a bonus forecast of 4% non-gauranteed. And oh, by the way, I'll throw in the insurance rider for death benefit. When you should really just buy term insurance much cheaper, and invest the rest. 

The point about longevity insurance is risk pooling. Any person who dies earlier contributes to the living of a person who lives longer. There is no way you can replicate this with a so called self-designed annuity. The whole point is to gaurantee you an income for life - even if you live to 120. You give up one thing for another. 

In the case you quote. I can only say one thing. With CPF LIFE, if I were allowed to put in 1 million, I'd get about 90K a year. If CPF LIFE had no limit, and I wanted to get 35k a year risklessly, I'd put in 380k. The remainder of 620k, I'd then use it for whatever I chose. Before you say, CPF LIFE offers too good a deal, private annuities offer less, I'll say this : 3.5% in perpetuity without risk is a dream.

[Temperament]

Annuity for life?

There is  a "self -designed" perpetual immediate Annuity for life where the principle is intact for life if you just withdraw the the annual interest generated at every DEC.

Some people has been blogging about this type of Annuity for life in Singapore Investment Bloggers.

If you have about a $million there, the interest which can be withdrawn at every DEC is about $35,000 + - without touching the principle.

Next year, should be the same until the goal post is shifted again.

And if the market crash, you can withdraw some of the principal for fire-sale in the stock market.

What annuity or bond can beat this "self-make" annuity?

Without knowing the details of this so-called annuity, I can't say too much. However, there is no way a 1 million sum can return you 3.5% in perpetuity without risk. 

And too many people confuse insurance and investment. Take endowment plans for example. The agent asks you to "invest" 10,000 a year in return for a gauranteed 1.5% and a bonus forecast of 4% non-gauranteed. And oh, by the way, I'll throw in the insurance rider for death benefit. When you should really just buy term insurance much cheaper, and invest the rest. 

The point about longevity insurance is risk pooling. Any person who dies earlier contributes to the living of a person who lives longer. There is no way you can replicate this with a so called self-designed annuity. The whole point is to gaurantee you an income for life - even if you live to 120. You give up one thing for another. 

In the case you quote. I can only say one thing. With CPF LIFE, if I were allowed to put in 1 million, I'd get about 90K a year. If CPF LIFE had no limit, and I wanted to get 35k a year risklessly, I'd put in 380k. The remainder of 620k, I'd then use it for whatever I chose. Before you say, CPF LIFE offers too good a deal, private annuities offer less, I'll say this : 3.5% in perpetuity without risk is a dream.

Pls think what brattzz said below & don't go into too deep on semantics.

You can also read in"Singapore Investment Blogger"

What's this supposed to be "perpetual annuity" for life preserving without touching your capital.

If you have the time or inclination, trolling CW888's postings you should know more about it.



brattzz
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RE: Retirement Planning for the Unwealthy

Annuity for life?

There is  a "self -designed" perpetual immediate Annuity for life where the principle is intact for life if you just withdraw the the annual interest generated at every DEC.

Some people has been blogging about this type of Annuity for life in Singapore Investment Bloggers.

If you have about a $million there, the interest which can be withdrawn at every DEC is about $35,000 + - without touching the principle.

Next year, should be the same until the goal post is shifted again.

And if the market crash, you can withdraw some of the principal for fire-sale in the stock market.

What annuity or bond can beat this "self-make" annuity?

haha!

CPF!!   

Also know that the wealthy ones has top up all their newborns-childrens's OA/SA to maximum to enjoy this CPF!!

smart money at work!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 

[url=https://www.valuebuddies.com/thread-7953-post-136628.html#pid136628][/url]

[Jared Seah]

Eh...

Am I missing something?

What "retirement planning" for the unwealthy?

I thought if you are unwealthy, you hope to have good health and work as long as possible till your drop or your employer kicks you out for someone younger, nimbler, and more vigorous?

If I have $1 million dollars?

Is that the new normal for unwealthy?

[MINX]

Eh...

Am I missing something?

What "retirement planning" for the unwealthy?

I thought if you are unwealthy, you hope to have good health and work as long as possible till your drop or your employer kicks you out for someone younger, nimbler, and more vigorous?

If I have $1 million dollars?

Is that the new normal for unwealthy?
I have the same thought when I read the comments here. Retirement planning seems to be a happy problem for the priviliged wealthy. For the unwealthy, its how to keep up with the bills and put food on the table, retirement planning, what's that? Most of the contributors here belong to the priviliged group, hence the slant in the discussion.
Having said that, I do not share entirely in your negativity. Think how to make yourself more valuable to the employer, learn new skills to make yourself more relevant, upgrade and invest in yourself. Then you can become the talent the boss seek to retain. My 2 cents worth. 

[Porkbelly]

Look after your health & fitness
Save money
Pack your own lunch, beverage
Delay purchases

These are basic steps to amass funds
Retirement is misunderstood by many to mean "not working"
There is still work. Just that effort, frequency and type is entirely
up to you. You still bear the consequences though.

The "unwealthy" can still prepare for retirement.

[brattzz]

in fact, for the unwealthy, ALL the more MUST prepare for RETIREMENT!!

Rich no need to worry about retirement, they sleep on their money anyway, they have tons.....

[Jared Seah]

Minx,

Just having fun with word play here

If we are not well off (unwealthy is so awkward to pronounce); we have other more pressing issues to attend to.


There's no negativity; just saying like it is.

Seniority is valued if we belong to the board of directors class. We are mentors, coaches, advisers. We are the mountain; others come to us.

Seniority is a liability if we are still doing the grunt work...


I'll be honest. Returning to my selling roots on the selling floor, I still have it.

But I must admit I can't compete with the younger me in my 20s or 30s.

If I'm the business owner, I would not hesitate to hire the younger me over the current me. I don't have the "hunger" anymore... (I have enough)

Luckily, how many younger Singaporeans want to do retail sales? I think I still have a small window before I'm replaced by a machine or the internet.

Now that's glim and negative for us old dinosaurs not working in senior management.

But great for youth working in start-ups coming up with new ways to lower business costs by replacing the human face with apps or machines!