Singapore Saving Bonds (SSB)
Asked 2w ago
Hi. I am 45 years old, and looking to retire at 55. I have no debt, and have emergency funds for 6 months. I have $300k cash, of which $100k is in SSB with an effective interest of 2.58% and 2.78% for 50k each, if held for 10 years. What should i do with the remaining $200k? They are now in FD. Thanks!
Hi Anon, great job so far.
When it comes to retirement planning, income is all that matters. You want to turn asset into secured cashflow for life with little to no risk on the capital.
For this, you have the option to use tools like:
1) CPF but you only get an income at 65 and not 55
2) High Quality fixed income (individual or collective investment scheme) to give you income but we're at a bad time with low yields, so you might need to take some risk and dip into Investment Grade to get decent yields, or
3) Annuities that will give you lifetime income without doing anything (helps that par funds still have equity exposure to earn a decent return instead of a pure interest only backing).
If you buy a single premium annuity and choose to receive income in 10 years, you can easily get a total 6.2+% yield per year for life. Capital guaranteed and no chance to lose capital.
I would do a combination of the latter 2 with Co financing to maximise yield due to low interest rates currently. This can bring you up to a 8-9% payout rate.