Jin Shun Chia

There's two things in this world, one that can be eaten and the other which cannot.

Jin Shun Chia

Senior Financial Consultant at Prudential

27Upvotes

About

There's two things in this world, one that can be eaten and the other which cannot.

Credentials

Senior Financial Consultant at Prudential

Jin Shun Chia

Senior Financial Consultant at Prudential

27Upvotes
  • Answers (52)
  • Questions (1)
  • Reviews (2)

Savings

Investments

Bank Account

Hi there, from the list of financial tools you use (bank savings, SSG bonds and other bonds, plus excluding insurance savings and stocks), it seems like you're pretty low risk profile. This is perfectly fine. Before exploring something else, you may want to do a stock take of what you like to have years down the road, e.g. family planning, property and retirement, and see if you have any shortfall in these areas and park your money accordingly. Agreed with other answers that inflation must be taken into account; do note there's different rates for different purposes. Core inflation is about 1% to 2% p.a., medical expense inflation on the other hand, was 10% alone in 2018. Property prices also inflate differently, about 3% to 4%p.a. on average over the past few years. So depending on your goals and inflation rates, you may want to shift some of your to-do list early. Lastly, do keep yourself open. There's insurance savings plans in the market which offer capital guarantee, also have people who know they have a budget to set aside purely for investment. Don't restrict yourself to low risk instruments!

Investments

Stocks

Unit Trust

REITs

I use this website to shortlist the stocks, then research on them to see if they're something I like before I buy. Hope this helps! https://www.dividends.sg/

Retirement

Investments

CPF

Family

Savings

Bank Account

Just giving a slightly different perspective of planning here. 1) ensure she has hospitalization bills covered, either with integrated shield plan with rider or if she has diabetes or health issues, an accident plan to supplement her Medishield Life coverage 2) knowing her salary is less than $2k, not sure if she has much in her cpf, especially if she's also paying for house, and if she has paid your education fees with her cpf. Where possible, she should have basic retirement sum which can give her about $600 to $800 monthly when she retires. Fully agree with Elijah that CPF annuity is a good plan. 3) bank savings in normal bank is ok. But there's CIMB Fastsaver around and the like, which offers better than 0.05%p.a. interest rates. Fixed deposits are good options where capital is secure. For retirement planning I don't suggest putting money in places where capital can be at risk. But if she's comfortable, please do so by all means! Lastly, she has about 17 years left to retirement age, and probably by 55yo she'd like not to do much work already. Ask her how she'd like to spend her retirement, and then do an estimation on how much she needs. From there, you'll know the shortfall and also the strategies she is comfortable to use. Then see how to plan things from there. Feel free to contact me for an in depth discussion! :)

Retirement

Savings

CPF

Just some simple answers based on the lack of information in your question! No, because you're only paying $70 in taxes it's not worth it. But yes, using $1 if you're expecting your salary to increase beyond $80k annually in future, because the withdrawal age is locked based on when you open the account. Based on last week's news, the government is reviewing and may increase the withdrawal age in September.

SeedlyTV EP06

CPF

Even though integrate shield plans cover the hospitalization bills, it's not entirely foolproof. The following considerations may need you to use Medisave instead of your ISP and rider: 1) 5% co-pay of hospital bills for folks who signed up for ISP riders after 8 March 2018 2) childbirth, cosmetic and dental uses, plus other exclusions from ISP and rider 3) long term medication care, including medicine and polyclinic visits not linked to any hospitalization episode 4) final expenses, unless you're comfortable with your children paying or allowing final expenses to take up part of the legacy you're leaving for your children This is also why Medisave account has a limit (that not many people are aware of). Any amount contributed in excess of $57.2k (as of writing) will be channelled to your CPF-OA Account, which earns interest of 2.5%p.a. and can be withdrawn after 55 or through CPF life.

Insurance

Hi Anon, agreed with Hariz on looking at the coverage you need instead of the premiums. But be mindful rules of thumb are just rules of thumb! Apply the rules wisely! Look into your current life situation, and what you can expect 10 to 20 years down the road. List down any certainties and uncertainties and think about what you like to have in your old age, or if you suddenly pass on.

Insurance

Whole Life Insurance

Endowment Policies

Term Life Insurance

Hello, just providing some suggestions here in addition to what the rest have written. For your critical illnesses, 1) do you want to stay covered even after one claim? 2) would you prefer to pay as you cover or pay premiums during your working years and stay covered after retirement? For your savings needs, 1) are you a disciplined saver? 2) how much of a risk taker are you in savings and investments. Are you comfortable with having short term losses in your capital to exchange long term gains? 3) targets! How much you want to accumulate by when? Having no target is also ok, but you need to be aware that you have no target. We can discuss more if you feel that these questions help!

Insurance

Hi Sharon, just my 3 cents' worth of comments here. There's 3 things you can consider. 1) For your dad's case, the most important is hospitalization plan. Because he is 55yo, hospitalization plan covering both private and government hospitals will be significantly more expensive (about 3 times) than the option which covers government hospitals. So you may want to consider this when choosing the full hospital plan coverage. 2) Next important plan to get is a personal accident plan for your mom. Because she is covered under MediShield Life, staying in B2 or C wards wouldn't be an issue. But first $1.5k to $2k of the bills aren't covered, so her accident plan should give about $2.5k coverage on medical reimbursement so that hospitalization due to accidents are covered. You'll have to consider setting aside rainy day funds for her in the event of hospitalised due to non accident related cases. 3) Thirdly, if your budget allows you can consider between getting critical illness plan for your dad or retirement plan for both your parents. The tie is here because I'm assuming your parents have no dependents (since you and your siblings have grown) and hospitalization plans will help cover treatment costs. What the critical illness plan does is to provide payout in the event of critical illnesses, but if you do retirement planning properly, it'll serve the same purpose. This is the best in my honest opinion, what you can do for your parents with limited budget.

Savings

Insurance

Investments

CPF

Hi Anon, sorry to hear about your situation. I'll be giving some calculations here for your consideration. I hope the calculations give you a better picture of your expectations. What he needs: - medical expenses coverage (saw on other comments he already has medical insurance, so this is one worry off the mind - just have to have enough cash to pay the premiums) - rehab expenses $300/month - daily expenses $1,000/month (covers your caregiving expenses and both your basic needs) Total he needs: $1,300 monthly for life (excluding inflation in expenses) What you and your wife need (please remember you need to plan for yourself and your wife, so both of you can have the option to stay home together while taking care of your son): - retirement fund $2,000/month for both of you, simple retirement no fancy stuff, and since you're 56 now, you probably only need this after 4 to 6 years Total both of you need: $2,000 monthly for life (excluding inflation in expenses) What you have/ are going to have (in chronological order): - $150k cash (is $150 a typo error in your question?) and $30k in CPF (hence total $180k mentioned in your question?) - FD $50k 1y 1.75% = $50.8k - FD $70k 5y 2.7% = $79.9k - SSB $70k 10y 2.57% = $90.2k in 10 years - $70k payout at 46yo (20 years from now) Next is what's interesting is what your agents have proposed - PruWealth and Prime Reward 17+3. This combination of plan actually allows you to get money on a regular basis after 3 years. Prime Rewards 17+3 will pay out until 20 years, then PruWealth will take over to give some money annually for the rest of the life. For PruWealth, please go for single premium option if you have not already buy the plan. Simply put, these two plans work well together to ensure a payout for your son for the rest of his life. Here's a timeline to illustrate how your money will flow: Now: - set aside $20,000 for first year expenses - take up Prime Rewards 17 + 3 and PruWealth Next year: - use payout $50k from FD for Year 2 to Year 3 expenses Year 4, 5 and 10: - start leveraging on Prime Rewards at Year 4 - taking out $79.9k from your 5-year FD and $90.2k from your 10-year SSG Bond Year 20: - getting payout $70k from your son's policy - start leveraging on PruWealth at Year 20 If you plan to go with your agents' suggestion, then you need to consider how much you like to leverage on both the plans proposed. You're lucky because you have $150k in savings and an FD payout after 1 year. What you need for 1 year is $1,300 x 12 months = $15,600. So you can use up to $130,000 in both plans. However, I doubt $130,000 would be sufficient so you'll need to use the payout from FD, SSG Bonds and your son's insurance to top up the balance. For the top up, however, I'll suggest using more conservative tools, such as fixed deposits and banks with better savings interest, e.g. CIMB FastSaver and UOB Stash (offering about 1%p.a. to 1.5%p.a.). Insurance is better used for long term horizon 10 years. So you can leverage on insurance now for your son's future, and for the short to mid-term, use savings and bank facilities to meet your needs.

Insurance

Hi there, just to summarise your current coverage is as follows: - death, tpd, ti, ci = $240k + $50k = $290k - hospital plan with rider (you'll be keeping this I presume) 1) whole life plan is cheaper than term plan coverage until 100yo (you can add up the total premiums payable for both plans to confirm this) 2) is $290k coverage enough? Say in the event of death, if your family needs $2k monthly expenses, $290k can sustain them for 12 years. In the event of critical illness, your GE plan covers your hospital bills, but you can't work and maybe need to hire caregiver. So maybe you'll need about $1.5k monthly. $290k can last you for about 16 years (some CI like Alzheimer's will take this long). So personally I feel that giving up a whole life plan to take a term plan covering until 100yo doesn't make sense. But if $290k coverage isn't enough, can consider taking a term plan for 20years (like for extra family expenses when children are young). This add on is cheaper than adding on a whole life plan.
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