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Retirement

Savings

I am a 52 male, single, recently retrenched (a much-welcome move - hate the job, and was compensated)> My net worth is currently at 1.49M (liabilities are daily necessities) - can I afford to retire?
Hi Max, I would suggest you take some time off to look at the full picture of your finances first. Whether or not you can retire hinges on many factors. I'll break them down as best as I can but it won't be totally complete; there's only so much I can breakdown based on a single number of $1.49M. But this is essentially a balancing game of cash inflows and cash outflows. You'll want to understand your expenses first. As you mentioned, your daily necessities are your liabilities; then in this case, how much are you spending on a month to month basis? This largely boils down to your lifestyle, which depends on what you expect in retirement. A simple lifestyle with the occasional treat or holiday will almost always mean that your retirement funds can last longer, something more extravagant may mean that you may run the risk of running dry in your final years. Your cash outflows must also include things like your medical insurance premiums, mortgage, etc (if any). Once you have this number, that'll be valid for this year and perhaps the next 2 years, but over the long run, whatever number you have, you'll have to increase it to account for inflation. The next step would be to look at your income generating assets. There's no way anyone can retire if they do not have income (passive or otherwise). Thus a $1million condo doesn't help one retire unless it's monetized (by renting it out), in fact, I would consider it a liability if you have to pay your mortgage and maintainence fees. Look at your net worth, and see what assets you have that generate income. This can come from many sources, such as stocks, bonds, unit trusts, CPF, retirement plans, etc. You'll want to reasonably estimate what kind of income you can get from this, and on top of that, know when the income starts coming in (e.g. CPF LIFE may pay out $2K a month, but it's not much help if it only starts at 65, you need income now or you'll have to draw on your savings) You'll want to build multiple layers of income; consisting of both guaranteed income and non-guaranteed income. Naturally if the entirety of your retirement income can be guaranteed, that is the best as you will have no worries, but it may be impractical to do so. You'll want to then construct a "retirement cashflow timeline" which shows the expected inflows of income year to year and expected outflows, both accounted for inflation. This will then let you visualise if your income can last forever, if not, when do you need to start liquidating your riskier assets to sit on cash? The key risks you will want to cater to includes: 1. Longevity 2. Health Risks 3. Inflation 4. Sequence of returns 5. Market volatility When you retire, look for income that is stable, inflation hedged, and with low volatility. To that end, I would recommend you create a 3-pronged retirement strategy, ensuring that 1. You have a systematic withdrawal plan from your assets 2. Proper segmentation of your assets into various buckets and layers 3. Have a basic retirement income floor with guaranteed income solutions for the essentials. The finer details of the recommendations (e.g. which areas to diversify to, which asset class) have to be tailored to your specific situation, as without sufficient details, I can only provide an overall picture of your financial plan. However, I can say this; you are free from the shackles of your job now. It sounded like you really didn't like it, so congrats (in a way) on moving on to the next stage.
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Lifestyle

Savings

Ultimate Budget-Smart Student Guide

Survive and enjoy your student years with these tips while getting a 5.0 GPA in Personal Finance.

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8 more comments

HC Tang
HC Tang

19h ago

Breakfast = bread-first LOL
Chua Wei Yi
Chua Wei Yi

16h ago

Exactly, I love bread. Everyone should love bread
Post

Stocks Discussion

Investments

Savings

Am i overly-diversified for a high risk taker with long horizon?
1. why the 10 yr endowment plan 2. why stashaway 30% and equity 100 3. why reits if you want to go for growth 4. why the rsp if you have stashaway and equity100 (overlap) 5. why tesla even. So much speculation
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Stocks Discussion

REITs

Investments

Retirement

Savings

Property

Robo-Advisors

Fresh Graduates

Please share with me why do people invest in REITS compared to other financial instrument? Just purely for dividends? How much dividends do you expect to earn from 10k or 20k worth of REITS ?
Maybe interesting: https://www.investopedia.com/terms/r/reit.asp . distribution/yield is high (maximum possibly 5-6% with Singapore REITs among the highest globally) . steady income, less capital appreciation . lump sum mostly unimportant, since distribution as percentage of assets . beginners qualify . Covid crisis f. ex. puts heavy economic load on some REIT subsectors. REITs and REIT ETFs are among the least revived asset allocations of all ...
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Investments

Savings

Property

Property Investing

HDB Resale

How can I buy HDB resale by investing next 3 years?
Hi anon, If you're getting a HDB in 3 years, the best thing you can do is to just save up. You may have options such as FD, money market funds or short term endowments, but you generally shouldn't invest if the money will be needed in 3 years. For long term investing options, your question is really too general, but I can say that if you are planning to invest for retirement, then you must plan to have income producing assets in your portfolio. At this point we don't know what your plan is, nor when you want to execute it, and what age do you expect to achieve your goals. It's great that you want to start investing, and have the capacity to do it, but before you even begin, you need to have a framework and an end goal in mind, or else you will just end up investing in a haphazard way. So I'll suggest you think about those first. I'll suggest that you take a look at some other answers of mine to have an idea about retirement income planning: https://seedly.sg/questions/i-am-a-52-male-single-recently-retrenched-a-much-welcome-move-hate-the-job-and-was-compensated-my-net-worth-is-currently-at-1-49m-liabilities-are-daily-necessities-can-i-afford-to-retire?aid=57084&utmsource=answershare&utmmedium=internal or https://seedly.sg/questions/retirement-fund-planning-and-finance-independence?aid=54992&utmsource=answershare&utmmedium=internal Once you have some ideas, you may be able to have a direction and eventually more specific questions about your situation can be asked. You can even ask again as a reply to my answer.
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Stocks Discussion

Investments

Robo-Advisors

Savings

CPF

After reading the answers in the forum, I am not sure to go for robo-advisor or self pick the funds? What are some changes you would want to make, back when you have started investing?
If you're just starting out, I think stock picking may not be the best way to go and that just getting index funds or using a roboadvisor would be best. I started out with Stashaway, because my management fees were 0% since I used referrals. If your risk appetite is high but you're not experienced, I suggest choosing a high risk portfolio and looking at what components of the portfolio are giving high returns or low returns - then from there you can understand the market a bit better and begin to pick stocks on your own. If you're worried about fees, you can always find referral codes online because there are usually discounts
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Savings

Investments

Lifestyle

Fresh Graduates

What can I focus on after reaching 6mths worth of savings? More savings or look into investment?
Hello! I think in terms of savings you are doing quite well. You even have insurance settled for now. So looking to investments is the natural next step. As a start, it would be good to read up on areas you are interested in. Personally, I would only invest in what I know about as I would then know the risks that I'm taking on. Once you have identified an area you are interested in, you can look for funds that invest in such sectors (i.e tech or REITs). Funds (Equity ones) are generally made up of a basket of stocks. This helps with diversification and lowering of some risks. It's a great tool for investors who do not want to spend too much time monitoring the markets. Hope this helps!
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Savings

Investments

Lifestyle

Buying a car - pay full in cash or take loan?
Above all, the interest rate for a car is guaranteed while investment only yields non-guaranteed return. Therefore, this is something that you need to consider in the first place. That being said, most car loans work on a simple interest basis. Therefore, it is possible to beat this rate through investing your money. You can read more about simple interest here: What is Simple Interest Also, find out more about how the cost of a car adds up: Cost of owning a Car in Singapore Finally, do take note that if you intend to take a loan and do a early repayment, there is usually an additional fee. Hence, bear that in mind as well. Enjoy your new ride! I share quality content on estate planning and financial planning here.
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Savings

Investments

Fresh Graduates

Undergraduate

I am 23 and barely have 5k in my bank. May I ask how can I earn passive income/start to invest/ways to earn more money? Am pretty clueless and would need to learn from 0..?
Rather than focusing on earning passive/side income, I believe it is good to take a look at your finances as a whole for better planning especially for someone nearing graduation. These can include: - Insurance coverage - and existing policies if any - Emergency funds - Income - current part time - Current loans (education/credit) - and repayment schedules - Basic expenditures - food, transport, utilities, telco, etc - Expected future expenditure - BTO/wedding/others Once you have charted out your cash flow and needs, you should be able to calculate how much of your funds you are able to invest. Meanwhile, you can read up more about the different types of investments available, their risk and how you are able to earn from them. Once you are confident, you can then move on to investing your funds. There's no need to rush into investing, take your time and only start when you are very sure.
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Investments

Savings

HDB BTO

How to maximise the use of my savings as a 19yo poly student to increase my wealth steadily for future uses like bto or a car or smth?
Evan

Evan

Level 3. Wonderkid

Answered on 29 Feb 2020

Hi! I’m 19 too! I just just started out as well!! I’ve opened a Syfe account to put in 1k and I’m looking at other places where I can store my money. Jia yous I’m saving money!!!
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