Anonymous
Since 1M65 is achievable through voluntary contributions to the CPF special account. What about the retirement plans by insurance companies?
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Loh Tat Tian
20 Nov 2019
Founder at PolicyWoke (We Buy Insurance Policies)
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Hariz Arthur Maloy
19 Nov 2019
Independent Financial Advisor at Promiseland Independent
1M65 works because of the 4% compounded return. It's just so happened that CPF SA gives a 4% return.
So any 4% return instrument that compounds would achieve the same result.
In fact, perpetual endowment policies can give a higher return than 4% over the same 30yr period with additional flexibility.
But I'll at least make sure SA is at 60k first because that gets 5% interest.
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There are definitely other platforms. But the crux of it is...
(1) They do have higher risk (or alpha / volatility index) as compared to CPF Special Account, which is gauranteed by the current government. However, the liquidaty comes with some price.
(2) Retirement plans can offer 4%, with a split of Gauranteed about 1 to 2% and Non-Gauranteed of 2% to 3%. But certain companies do cut bonus, and terminal bonus may fall to 0 (outlier like AIG/AIA Saga). So its just a potential, for other platforms. Of course, they do offer flexibility.
(3) I also deal with Traded Policies, but they do have their fair share of risk to consider.
So its about understanding the risk and return involved.