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Retirement

Making sure you have enough for the later years

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AMA The Woke Salaryman

Retirement

Savings

Any single premium retirement annuities with good guarantee returns?
! Hi Anon, here's a quick snapshot comparison for single premium lifetime annuities that I carry. I personally prefer Taiping's policy due to highest potential payout and good surrender value growth as well.
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CPF

Investments

Retirement

Hi I would like to find out about the various strategies that people use for investing with CPF-OA?
D
Deedee
Level 5. Genius
Answered 2d ago
Hi anon! Few years back I invested via my insurer into First State Dividend Adv A to grow the returns so I can make a higher downpayment on my bto upon key collection. Mistake I did was to trust my agent and blindly invest =x Luckily though, the returns are ~10% +/- What I didn't know was that there were sales charges (which fortunately would be 0 from 1 Oct 2020 if I'm not wrong), ongoing trailer/platform charges of 0.4% (I think) plus every quarter cpf would deduct $2.14 for the investments. I haven't quite calculated my total growth but since the returns are still double digit and my key collection delayed, I am taking my time to research then decide if I will continue with it or to withdraw and then invest via endowus which has lower fees, or withdraw to reduce loan amount.. All these is because my partner and I haven't decided what to do with our bto.. Whether we will stay till retirement or to sell after MOP.. And whether to service via cpf or cash or both haha. There's a lot to think about but I think I will periodically invest maybe every year or few years lump sum. Go global to diversify :)

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Endowment Policies

Savings

Retirement

Wise to minimize losses of 8+ k in Year 2 by surrendering GE endowment plan? already paid 20k x 2 =40k, surrender value less than 32k .non guaranteed interest dive way below illustrated 3.25% in 10y?
saylavee
saylavee
Level 4. Prodigy
Answered 2d ago
Imo, i will let the plan run accordingly. Endowment plans are based on participating funds of projected 3.25 to 4.75 returns which will give u an average of 2-3+% (variable) over the years. Insurers use smoothing to ensure that non guaranteed bonus stay within reasonable levels for us. Given that your plan is pay 5 wait 10 for a total of 15 years which i also have, it acts as an safety net for you should you need the money (100% capital guaranteed +bonus) by then. In 10 years time, what are the chances that markets have not recovered? Within the same timeframe, logically speaking, don't you think you would have made progress on your financial situation? Ask yourself, what made you choose this plan. Did you ensure you had enough funds for the whole payment because early termination for any savings/investment with insurance companies comes with a huge price.

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AMA The Woke Salaryman

Supplementary Retirement Scheme (SRS)

Retirement

Should I go for special account top or SRS if I were to plan for my retirement in a more “efficient way” to reduce tax?
J
Just_Saying
Level 4. Prodigy
Answered 2d ago
I think there is no right choice, as it depends on the purpose of this contribution, the liquidity and the individual perspective and knowhow. Some of us even do both SRS and SA top-up if we are super high in-come earners now. But below are some of the basis comparison for reference. SRS - WIthdrawal age is statutory retirement age at time of application (current 62) - To effectively earn the tax relief, annual withdrawal post-retirement should not be more than 40k per year. - Early withdrawal allowed with penalty 5% and subjected to income tax - Good for invest-savy participants who can achieve more than 4% offered by SA SA account - Withdrawal age is 55 (on balance after forming RA account) - Not subjected to further tax during withdrawal - One way contribution and non-reversal - Good for risk adverse participants who is satisfied with 4% offered by SA

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FIRE Movement

Investments

Retirement

What steps do you take to gain fire? How much is enough and is 1Mil always the benchmark?
Daniel Kok
Daniel Kok
Level 5. Genius
Answered 3d ago
Everyone's amount could be different. Considering that if you can put 1m into a 5% instrument it means you will be getting $50k per year for your income. will that be enough for you to get by with inflation? If yes, then you're probably safe with 1 mil. :) jnstead of working towards an amount, try working backwards base on what kind of lifestyle you want, and not forgetting to take into consideration of inflation!

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AMA The Woke Salaryman

Retirement

Hi! Wanna ask you think is it possible to retire at 50, with 400k in bank and a hdb fully paid up. thanks!?
He Ruiming
He Ruiming, Co-Founder at The Woke Salaryman
Level 6. Master
Answered 3d ago
Of course it is! It highly dependent on 1) The job or business you start Assuming you start at 30, 400k by 50 is about 1.6k a month. And that is not even taking into account investments. Assuming you save 50% of your income, then you'll need to be earning at least 3.2k for the 20 years. I think it's possible. 2) The HDB that you buy ;) Of course if your HDB is like $1,000,000 then it will be harder la. But if you are willing to settle for one of those $300,000 HDBs (I heard Tengah have), I think your goal is well within reach.

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AMA The Woke Salaryman

Family

FIRE Movement

Retirement

OMG SO EXCITED!!! How do I balance supporting my parents during retirement while at the same time planning for future child(ren), and also trying to FIRE?
He Ruiming
He Ruiming, Co-Founder at The Woke Salaryman
Level 6. Master
Answered 3d ago
Being a member of a sandwich generation is always a pain and there are never any easy solutions. Balancing elderly parents and children is already hard enough. Trying to throw FIRE in there makes balance impossible. You should recognise that earning average salary x spending like an average person x having average financial habits won’t help you break out of your extraordinary circumstances. That said, don’t let that discourage you. Rich families are rich today because their ancestors provided them with that privilege. Somewhere along the way, someone had sacrifice time and effort – so that the future generation could have a better life. Obviously this won’t be easy. Here are some things you can do have the most impact: 1) Start working and investing as early as possible (NOW, if possible) 2) Possibly start a business 3) Live below your means – even when you’re earning $10k, spend like you’re a fresh uni grad instead of buying a car 4) Spend less on your home, and more on investments 5) Gain skills that put you in demand - many times, people who are paid highly have skills that people don’t have, or they do jobs that people can’t do. 6) Stay healthy, both physically and mentally. Medical costs will easily chip away at any savings that you have. 7) Learn to make your own decisions instead of following your parents. Many Gen Ys make terrible decisions (i.e Don't invest, buy a big expensive HDB) because of their parents past (and usually obsolete experiences) All the best and good luck! It won't be easy.

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Lifestyle

Retirement

AMA The Woke Salaryman

Fresh Graduates

Is there anyone like me? I'm in my early 20s and I don't have ambitions to climb the corporate ladder. I would be okay with having a mid 2-3k income for as long as I have a decent work life balance.?
D
Deedee
Level 5. Genius
Answered 2w ago
Hi anon! :) I come from a lower middle class family where my parents' retirement plans are their children (is this an Asian thing? Haha) and they have no investments at all. In fact, they recently terminated their health insurance plans and I am struggling trying to convince them to reinstate their plans so I am not as lucky as you. My $550 Braun buffel handbag which I bought 3 years ago was my promotion present to myself and that's my only luxury good. But once a year I'll clear all my leave to go on one big holiday, while spending within my means! :) Anyway, I started off thinking I would be okay with having a mid 2-3k income (similar thought process as you). However as I grew older, family expands, expenses inevitably increase as well. My family also leads a modest lifestyle, sharing food and only eating out on birthdays (not even new year or national day we would eat out!) I don't live paycheck to paycheck but since my promotion, I had more excess money and this gives me flexibility of choice and how I want to better support my big family, without compromising on my future family planning. My opinion is, if you can afford it, work hard while you still have the time and energy to do so but once you feel you really just want to enjoy life, you can always "downgrade" to do so. And this is really thinking far off into the future how your decision might affect it. All the best to you!

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STI ETF

Investments

Retirement

ETF

Isn't now the best time to load up STI when it is unloved?
Jan
Jan
Level 4. Prodigy
Answered 2w ago
Yes if you enjoy stability and don’t mind slow price movement & have the captivity to hold in the long run. On the other hand, many are betting on US stock because of its high volatility and are hoping for some quick gains.

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CPF

Income Tax

Retirement

If my taxable income is at 40k, and by topping up my SA account with $x (up to 7k), does it mean that my Returns is effectively 3.5% (from tax relief) + 4% (from SA)?
Hi anon, Yes, for that year. You'll get 3.5% savings on your tax plus 4% on your top up, so effectively 7.5%. This is followed by 4% on your SA in the years after that since tax relief is only granted for that year that you top up. It's good that you are looking towards beefing up your SA. People say that the FRS amount is hard to reach, but all your need is time and compounding. You don't have to get there in 5 years or 10 years, but give yourself 20 years and you'll likely get there.

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