Hi anon,
It's good that you are starting to plan for your retirement. There are generally two types of private annuities on the market as follows
Drawdown annuity: You'll save for a number of years, e.g. 5 years (some plans do have a single premium option), the plan will accumulate over another, say, 5 years, and then you'll get a stream of guaranteed and non-guaranteed income over the next 15-30 years. Works like CPF Life. May come with benefits such as disability payouts.
Lifetime Income: You'll save for a number of years, (like above) and after an accumulation period (specified by you), you will get a yearly payout for life, consisting of a guaranteed and non-guaranteed component. Your capital is usually also guaranteed (upon death), and may even rise over time, depending on the plan.
So, depending on which type of private annuity you prefer, as well as how long you wish to receive income from, different insurers will have different plans to suit your needs.
You'll want to analyze the plans based on several factors, for drawdown type of plans, look at factors such as guaranteed yield, projected yield, any other fringe benefits, etc. For lifetime income payouts, look at whether your capital is guaranteed at the point of payout, or only upon death, as well as the amount of guaranteed payout and non guaranteed payout. Since the purpose of such plans is the certainity of income, I will generally make the guaranteed payout the key focus for my search regardless of the type of plan, other fringe factors can be a 'tie-breaker' if two plans have very similar payouts.
The market is undergoing some changes in preparation for new MAS guidelines to be implemented (MAS RBC-2), so there is quite a bit of a shake up at the moment and products are progressively being repriced all the time. In general, for drawdown annuities, NTUC's plans offer decent guaranteed and non-guaranteed returns at this point of writing, and for single premium plans, you can consider AIA at this point. For lifetime income payouts, Aviva does guarantee your capital upon the start of payouts, and China Taiping offers decent payouts overall (capital guarantee is only upon death). These plans are generally what I see the marjority of clients choosing at this point.
If you relocate overseas, the plan will still be in force.
I'd highly suggest having an in depth conversation with an advisor to understand more and see some customized examples that are relevant to your situation, so that you can make a better decision.
Hi anon,
It's good that you are starting to plan for your retirement. There are generally two types of private annuities on the market as follows
Drawdown annuity: You'll save for a number of years, e.g. 5 years (some plans do have a single premium option), the plan will accumulate over another, say, 5 years, and then you'll get a stream of guaranteed and non-guaranteed income over the next 15-30 years. Works like CPF Life. May come with benefits such as disability payouts.
Lifetime Income: You'll save for a number of years, (like above) and after an accumulation period (specified by you), you will get a yearly payout for life, consisting of a guaranteed and non-guaranteed component. Your capital is usually also guaranteed (upon death), and may even rise over time, depending on the plan.
So, depending on which type of private annuity you prefer, as well as how long you wish to receive income from, different insurers will have different plans to suit your needs.
You'll want to analyze the plans based on several factors, for drawdown type of plans, look at factors such as guaranteed yield, projected yield, any other fringe benefits, etc. For lifetime income payouts, look at whether your capital is guaranteed at the point of payout, or only upon death, as well as the amount of guaranteed payout and non guaranteed payout. Since the purpose of such plans is the certainity of income, I will generally make the guaranteed payout the key focus for my search regardless of the type of plan, other fringe factors can be a 'tie-breaker' if two plans have very similar payouts.
The market is undergoing some changes in preparation for new MAS guidelines to be implemented (MAS RBC-2), so there is quite a bit of a shake up at the moment and products are progressively being repriced all the time. In general, for drawdown annuities, NTUC's plans offer decent guaranteed and non-guaranteed returns at this point of writing, and for single premium plans, you can consider AIA at this point. For lifetime income payouts, Aviva does guarantee your capital upon the start of payouts, and China Taiping offers decent payouts overall (capital guarantee is only upon death). These plans are generally what I see the marjority of clients choosing at this point.
If you relocate overseas, the plan will still be in force.
I'd highly suggest having an in depth conversation with an advisor to understand more and see some customized examples that are relevant to your situation, so that you can make a better decision.