Hi there, my parents have recently come onto a substantial sum of money (~SGD150,000) - what would be the best way to utilise these funds?

Some background: My parents are both in their early 50s, they own a 4-room HDB flat but beyond that, have little to no savings. My priority is to build a retirement fund (for them). I (25, F) am not interested in legacy or inheriting this. What is the best way to maximise this much welcome injection of funds?

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Pang Zhe Liang

02 Jan 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Firstly, we need to have a complete understanding on your parents' cashflow. Through this process, we will understand their earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-pers...

Now, we will understand their expenditure and needs for the future. With this in mind, we can create a guaranteed stream of income that is capable to help them pay for their retirement expenses. Furthermore, this stream of income will grow so long as to cover the rising cost of living over time.

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Hariz Arthur Maloy

02 Jan 2020

Independent Financial Advisor at Promiseland Independent

It would be ideal to convert this money into a guaranteed stream of income for life. Consider using annuities that also doesn't draw down their capital so that they can choose to withdraw some of the money in a lumpsum in the future should they wish too.

There are annuities that can give you a projected 4.2-4.5% of their capital after 5 years for life.

Another option would be a dividend paying global fixed income portfolio. You can also expect a 4% dividend payout with potential growth and overall low volatility.

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