facebookAre retirement/endowment plans from insurance companies a good way to grow retirement income? Or are there better alternatives? - Seedly

Anonymous

02 Jun 2020

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Insurance

Are retirement/endowment plans from insurance companies a good way to grow retirement income? Or are there better alternatives?

What are some of the best ways to grow my retirement fund? Should I be looking at insurance as an investment?

Discussion (6)

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Nigel Tan

02 Jun 2020

Executive Senior Financial Planner at Great Eastern Life

Definitely! When planning for retirement; there are needs (living expenses, utilities, medical costs) and wants (holiday, hobbies, country clubs).

Retirement plans provide a source of GUARANTEED income to you that could ensure that your needs are taken care of. If it was just purely on other types of investment vehicles, you may suddenly lose that source of payout during a bad year. Think of the current climate, if you had invested in eg. hyflux bond / banks, you'd probably be down by alot and wouldn't want to liquidate your investments at a loss. They're not the ONLY plan that can be used to plan for your retirement, but are definitely a place to start.

Think of it as having a pay cheque (needs) and a play cheque (wants).

Low risk products can help to take care of your pay cheque.

Eg. CPF Life, Annuities (retirement plans), Supplmentary retirement scheme (SRS)

Higher risk products can help take care of your play cheque

(stocks bonds property, REITS, etc.)

A comortable retirmenet would usually encompass a mixture of both. At your retiremnt age, it is unlikely that you have another 10-20 years down the road to work and make back the income if your Investments had gone south.

Lim Chun Long Jimmy

02 Jun 2020

Co-founder at PolicyWoke (Traded Endowment Policies)

There is a variant of endowment plans called Traded Endowment Policies/Plans (TEPs) which is pre-owned endowment policies that was bought-over and then re-sold by 3rd party brokers. The projected IRR is between 3.8% and 4.6%, and is usually higher projected IRR and shorter term to maturity as compared to newly incepted ones for the same policy structure.

Disclaimer: I co-founded a business trading insurance policies.

Tan Li Xing

29 Jan 2020

Financial Consultant at Prudential Assurance Company (Singapore)

Hi Anon,

There definitely are products that can meet this need, is there anything you are looking a...

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