What is better to consider for a fixed period of monthly payout from age 50-65 years old? Annuity or endowment plan?

Hi anon,

If you wish to have a monthly income for a period of 10-15 years prior to CPF LIFE starting, then a retirement income plan would be an option for you.

Do note that given the timeframe involved, there isn't much time left till you start the payouts.

An endowment has reinvestment risk; i.e. what will you do with the entire sum of money once it has been paid out to you? You would likely not need the entire sum of money at one go, so how you preserve and grow the remaining monies will be critical. A retirement income plan is designed to start payouts while still investing the rest of your capital that isn't needed immediately, and thus can probably achieve a better yield for you.

Incidentally, I have an example of retirement plans for a 40 year old male and this should give you an idea of the various plans available. You'll probably want to speak to an independent financial advisor to find a plan fits into your retirement portfolio and help you achieve your goal of getting an income starting from 50-55 year old.

There are many factors to consider when evaluating such plans, including guaranteed yield, projected yield, fringe benefits, etc so do spend some time to find the best plan that suits your needs.

Hi there,

Having added monthly income from 50-55 years would be an good option, if you need supplementary income or you are intending to stop work after 50 years old.

If you are looking for guaranteed monthly payouts, its better to use an annuity plan as the payment schedule is guaranteed. Endowment plans with lump sum payouts, still require you to reinvest the net capital when it matures, to ensure no loss in returns for yourself. You would also need to manage the lump sum payout carefully to ensure the capital sum is able to last you to 65.

If you have the intention to start something for yourself, you have quite a few possibilities, considering you are starting to plan earlier compared to most. Do reach out with a contact request, so that we might discuss what might work best for yourself! I hope i was able to address your query!