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Eric Chia

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Eric Chia

Senior Financial Consultant at Prudential

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Senior Financial Consultant at Prudential

Eric Chia

Senior Financial Consultant at Prudential

  • Answers (93)
  • Questions (1)
  • Reviews (2)

Investments

Savings

Retirement

STI ETF

Regular Shares Savings Plans (RSS)

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Hi there, it seemed that all of your money is in equities, there's no guarantee in the returns that they can offer. You may want to consider diversifying your retirement nest into the other asset classes such as - insurance annuities - if you contribute to CPF, you would be on your way to getting CPF LIFE which is a kind of insurance annuity, annuities kind of guarantee a baseline for your retirement income - cash savings - simply cold hard cash savings in local banks as and when you need it - commodities - an example is gold, but commodities fluctuate in prices like equities - property - illiquid but can offer passive rental income, comes with high capital and costs to maintain the property - bonds - lower returns but risks are more manageable as it largely rests on the credit rating of the entity which you are dealing with You're pretty lucky you have quite the budget to play around with. So you can consider making better use of your money by putting some of them in places with better guarantees to hedge against risks which you are taking in other investments. Then your retirement strategy is stronger.

Insurance

Investments

Savings

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Hi Gideon, I'm a bit concerned when you mention that it's not in your capacity to save for retirement now since your priority is on the house coming 8 to 10 years. Quoting Seedly's graph here, ! You don't have to start big to start saving for retirement. The best time to start saving for retirement was yesterday. I feel that you have not fully run through the numbers with your financial consultant. How much do you really need for the house? If it's going to take up every cent of your savings, is it worth it? Best is to split your excess every month into retirement and house, so there's no need to wait until you've saved up for the house before you start saving for retirement.
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Insurance

Investments

Savings

Robo-Advisors

Endowment Policies

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
If you're lazy, an endowment plan is more suitable as you don't need to monitor its progress. An endowment plan is way more stable and most plans in the market offer capital guarantee for more than 10 years. If you're willing to take risks, i.e. this $500 monthly savings you can afford to lose as much as 50% at the end of the investment horizon, then robo-advisor can be considered. $500 monthly is a decent budget, you can afford to split the risk between robo-advisors and endowment plans. See how much risk you are willing to take on the $500 then you know how much to put where.

Insurance

Savings

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Hi there, do you remember why you bought the PruWealth plan? Can revisit that or check with the agent who sold you the policy. Wealth accumulation plans should come with a purpose - be it forced savings or for retirement or other matters. PruWealth is an endowment plan. At 20 years, the capital is guaranteed and you're free to withdraw from it minimum $1,000 up to the cash value at the point in time. The balance that you leave with Prudential will grow with you until you reach 99 years old. Compared to robo-advisors and ETFs, robo-advisors and ETFs are non-capital guaranteed. Depending on when you need the money, you may end up having less than what you start off with. I hope you are not just saving $300 plus monthly. If you're saving more then the excess savings can be used in robo-advisors and ETFs if you feel that you're up for the risk. But whatever the outcome is for your robo-advisors and ETFs, you know that you'll have some money with PruWealth 20 years down the road. So you can invest money with a peace of mind.

Insurance

Critical Illness (CI)

Health Insurance

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Most insurers follow standard definitions for critical illnesses set by LIA, but the 2019 Framework would only be available in products next year (see here). To shop for CI plan, you may like to look at the definitions of early-stage CI, which varies from one insurer to the other, and also any peripheral coverage that comes with the plan, e.g. diabetic complications, osteoporosis, which are not included in the CI listing. Pick the ones which offer the definitions that you can accept. You should also size up how much coverage you need, and then check lastly if the premiums are within your budget.

Insurance

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Hi! I've some steps which you can consider taking to check: 1. Are you healthy? If you aren't, skip the remaining steps and stick to whatever you have. 2. Family3 premiums have been paid off so no point surrendering unless you need the money for emergency use 3. Whole life CI plan you can check what's the cost per $1,000 sum assured, e.g. you mentioned $60/month premiums for $100k coverage, the cost is roughly $0.60/ $1,000 coverage. If you do limited payment term WL CI plan, what would be the equivalent cost? (It'll be cheaper I believe because plans nowadays have multiplier benefit and premiums are competitive) No harm checking before you decide anything. One last note, CI definitions have been revised this year you may want to hold on to next year before buying - if you like the new definitions better, and vice versa.

Insurance

Lifestyle

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Updated on 09 Oct 2019
I'll share the resources here (since you prefer not to go through a financial consultant) but I need to highlight that having a standardised calculator wouldn't be as good as having a human touch to the calculations. You won't know your blindspot unless someone points out to you. If you are to run through the calculations by yourself, be sure to have an experienced and trusted family or friend to check that the assumptions you make are right and that you're not biased in the assumptions or miss out any critical variable for consideration. LIA also has a neat calculator that you can use. You may like to take Life Insurance Association's (LIA) rule of thumb (see link for the assumptions that make up the rule of thumb), which goes as follows: - Death coverage should be 10 times annual income, e.g. if your annual income is $40,000, then your death coverage should be $400,000 - Critical illnesses coverage should be 5 times annual income, e.g. if your annual income is $40,000, then your critical illnesses coverage should be $200,000 Hope this information helps!

CPF

Family

Lifestyle

Savings

Insurance

Retirement

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 09 Oct 2019
Just some simple steps to get you both started: 1. Please check if your parents already have their MediShield Life plans upgraded with cash rider. This covers the medical expenses that'll come by in the later years. With their age, the premiums can easily go in the thousands with private hospitalisation coverage, so government hospital coverage is a lot more affordable (premiums are generally a third or less compared to private hospital plan). 2. They have already passed 55 years of age back in 2016/17, so it's kind of already "determined" how much they should have in their retirement funds with CPF. You may like to login to their CPF account and check what they have first before doing any planning. There's a lot of things you can do here so I suggest speaking with a financial consultant to explore options in this area. 3. Both yourself and your sis are doing the right thing to contribute to your parents' CPF-RA - it also helps you both reduce your tax obligations. Please refer to this link to get a sense of how much you should contribute to your parents' RA. 4. Lastly, fine-tune the planning with ElderShield supplements that boost the payout to lifetime and triggering with 2 ADLs instead of 5 years and 3 ADLs (sorry for the jargon here you should speak with the consultant to understand more) These steps will help for a start. As there's no enough information given in the question, and there's also a lot of variables to consider, it's better to engage a trusted consultant to go through the variables and options before doing anything. And the solutions (at times) can be as simple as managing bank savings, not necessarily need to use insurance or any fanciful tools to improve the situation.

Insurance

Personal Accident (PA)

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Updated on 26 Jul 2019
Most accident plans in the market are guaranteed issuance, I.e. you can buy with disabilities. However, there's no insurance payout on your existing disabilities and disabilities due to pre-existing medical conditions. What this means is claims can be made from personal accident plan if the disability happens due to an accident that occurs after the plan is purchased.

Insurance

Eric Chia
Eric Chia, Senior Financial Consultant at Prudential
Level 6. Master
Answered on 26 Jul 2019
Just like to ask prior to buying from your friend, have you known or been in contact with other friends or agents? There are good ones out there you just need to find someone you can trust to seek advice. Do you surrender the savings plan? It depends. Be educated on the pros and cons before making the decision!
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Level 6. Master
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