What's the difference between an insurance savings plan for retirement as compared to relying solely on CPF SA and SRS?

The difference would be your access to the funds, by how much they grow and when they are available.

So for CPF, your monies would mainly be available to you at age 55 for portions above the BRS/FRS/ERS. If lower than these values you will be able to withdraw up to 5000, the rest of your monies would be in the form of monthly payouts. Lastly monies in the SA will grow at 4%++ for different amounts inside and at different age.

For your SRS it really depends how you use it. Whether you are investing with it. Just putting money there or you buy certain plans with it. It will have differing outcomes. Just know that it isnt recommended to do nthing with it. But also try to keep the withdrawal and amount of it within reason so as not to forego all the tax benefit you save on in the earlier years.

Lastly for an endowment plan or savings plan. The growth of it is tagged to the the performance of the company's parfund. If you are on a plan just keep track of the bonuses declared and all. The good thing is that your capital is protected in the case for Pruwealth. And the flexibility that comes after the 20years or what not is decent. If all ur money is in the SA then a certain portion, of it is used for the BRS. Which u cant withdraw past it. But if lets say at age 56 or 69 you want to do some yolo party spend everything it is an option with the pruwealth monies. But the drawback is that the returns are based on the parfund and there is lesser guarantee.

Each would have its uses, and it really has to take into account your age, how you view retirement, when you are thinking about retiring, how much are you earning and spending. All in all, whichever style you use or how you combo it. Its not a 1-5 year journey. Things change along the way and so do you. Just build up a reasonable plan and adjust along the way. With reasonable goals and achieveable figures. Im sure you will get what you want.

Hi anon, I will try to break it down simple enough. Tbh, I'm not sure what you're seeking for.

In gist, the returns for:
a) Insurance savings plan ~2 to 3% pa (somewhat guaranteed or not how will anyone trust the insurance company?)
b) CPF SA 4% guaranteed
c) SRS 0.05% guaranteed OR ~6-7% non-guaranteed if invested

Good thing about Pru wealth II is that you may make lump sum withdrawals anytime you wish as long as there are still value in the policy. So for eg, if I decide to semi retire at age 55, and my part time work is insufficient to pay any bills, I can just withdraw some money and let the rest continue compounding.. Or if I want to travel and need extra cash, I can draw some money.. Or if I want my CPF SA to continue earning up to 7% interest from 65 to 70, then I will start drawing from the policy first.

You could also have a second life assured under the policy if I'm not wrong. So let's say you don't need the money, you may change the life assured to your child so s/he may benefit.

Basically I feel Pru wealth II helps to ensure that I have some money next time when I need it, whether to cover my expenses or to enjoy an early retirement before CPF Life pays out.. Or maybe even to have a higher payout after age 70?

Besides, I believe Pru wealth II is a capital guaranteed product, although it takes 20 years... So if I opened my srs account, I will just invest all the money in the account in full equities to maximize returns. Even if my investments don't make money, I know I can still survive with the policy as my backup plan.

FACTS

Dont always believe the insurance agent/banker said they just want commision. we must understand what we buying.

Below from the brochure. I should comment based on what is written in their marketing material.

In the brochure, it say $5k for 10yrs, then wait till 70 to get $136,343 with 2stars stating ASSUME 3.25% p.a. Insurance & bank love stars & fine prints.

FACT#1: Meaning the amount is not guaranteed.There is a chance underperform 2.5% OA account which is risk free.

FACT#2: You can top-up your SA account which is 4% guaranteed risk free. And if you dont withdraw it at 55. The interest of CPF can up to 6%.

SRS is used for people with high income to get tax relief, else no reason to use it.

OPINON

Why retirement plan, Not CPF SA instead? 3.25% p.a. Is very easy to achieve, just buy any fixed income unit trust alone and is done. Totally liquid no need to wait 30 years.

Not sure how old are you, if you are in your 20s then should be fine. Because putting in your CPF you are only able to withdraw only at 55. 20+ years old 20 years plan you should be 40s+. If you dont do investment yourself, then is ok, treat as saving.

in my 20s, 年少不懂事, i bought all these endowment plan. At my 30s, i was so triggered by all these bankers/agent, that i start investing myself. I can only say is not easy to beat the market, but is definitely easy to beat all these plan.

​​​

Hi Anonymous,

Buying an endowment policy for retirement purpose allows one to use the cash-out funds earlier or later than the CPF withdrawal age, depending on the person's age when buying from day-one.

Disclaimer: PolicyWoke is a 2nd-hand endowment policies broker