12 Nov 2020
Hi, I'm 28 years old, planning to put my money somewhere instead of bank. Should I do short term endowment plan (10 to 20 years) or long term (until 100 years of age)? Or retirement plan? Thank you?
I understand there is guaranteed and non-guaranteed portions so I am worried if I choose the plan until 100 years of age, I might only get back guaranteed amount which is not a lot! Should I put short term for 10 years first? Or just go ahead with retirement plan? I can put $10k a year. Should I do both short term plan (10years) and retirement plan? Split my $10k? I'm not comfortable with investment at the moment but who knows 10 years later, I might try out investment.
You should not get an endowment plan/retirement at all, is bad. Because u have little control & not liquid & you may not know what they invest your $$$ in.
Just open a robo-advisory account if you just plan to put your money in and forget about it. (But i think, is not great to let robo decide for you, but still better than endowment)
I would propose open a brokage account & DIY & start to learn abit of investment. (i am more old fashion😆 )
because most bank's plan / robo will use your $$$ to buy Unit trust & ETF. Which you can do it yourself.
You do not need to worry about addition retirement plan, if you plan to retire at 65. Because there is CPF Life. Personally, i think that is the best plan. Unless you want to retire early.
The greatest risk by is not taking any risk & the amount of risk is dependent on your investment knoweldge.
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(10 to 20yrs) would be considered as mid to long term and i dont think most of us will ever live up to 100 years of age to redeem the endowment plan so i dont think it will become any issue. As what others have mentioned, at your current age, go for a higher risk instrument due to the fact that you have a long time horizon. Etfs/robos are at your disposal, all you have to do is to put money in and everything will be done for you. Just do a comparison yourself using this, https://smartasset.com/investing/investment-calculator#FTpxQAztIG
$10k starting amount, $10k contribution annually and a 2%(endowment) vs 7%(snp index) for 10years.
But if you are really a low risk taker, I suggest getting a limited pay (policy term for 100years) endowment eg pay 5/10years and let it accumulate till needed in the future. Once you finish paying, the $10k/y from yourself can be used to buy the above mentioned. But take note, there will be problems if you cannot commit to the payment period for endowment plans. Remember this, every investment instrument is catered differently to each individual. Whats good for me may be bad for you.
CPF is a double edged sword, like Aviva GTL insurance, you are subjected to changes and have no control over what those at the top say. Yes, 4% guaranteed is really enticing but not for me at my current age. Since its your money, you can choose what you want to do with it. Just ensure you have enough to tide you through a period if something happens before you throw the 10k in. :)
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Putting money into endowment frankly speaking, really doesn't help much at all...
I've a friend pr...
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