How should you draw on your investment portfolio during your retirement years to ensure that it lasts? - Seedly
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Anonymous

Asked 2w ago

How should you draw on your investment portfolio during your retirement years to ensure that it lasts?

Little information about using investment funds during retirement... Probably because seedly tends to draw a younger crowd?

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It depends on the types of investment that you have. Let me give you a hypothetical example.

Assume that the investment portfolio is able to yield a return of 8% per annum. Accordingly, we will draw 5% per annum from this portfolio. This strategy allows us to continue growing our wealth while ensuring that we will not drawdown our retirement funds too quickly.

Of course, this is merely a simple example to illustrate a concept. In reality, we will need to conduct comprehensive financial planning and detailed calculations for the long-term. This allows us to ensure that the financial instrument is capable of helping us achieve our goals.

I share quality content on estate planning and financial planning here.

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Patricia Law
Patricia Law
Level 4. Prodigy
Answered 2w ago

Hi there,

You can consider retirement products that will allow you to invest in a lump sum or pay over 5 years. I do not know you age so it will be harder to advise. But AIA has 2 very good retirement products that allows you to invest while you get payout during your retired years. The projected investment return is around 8%.

For example if you are 49 and you plan to retire in 15 years' time, by investing a single pay of $30k, you will be expecting a monthly payout of $838 per month for 10 years (total payout $100,560) in comparison to the investment of $30k.

This plan allows you to customise the number of payment, top-up if you like (min $1,000 per top-up), target payout period, target retirement age. You can also choose to postpone the payout age to a later age if you prefer.

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Hi there! I think there are many different strategies with regards how to utilise your portfolio in retirement.

Depending on your risk tolerance, as well as your need to have a passive source of income for retirement, one of the easiest options would be to accumulate more dividend paying stocks towards your latter years.

The earlier years should be focused on growth, to capitalise on the movement of the economy. If we take reference to today, if you were retiring, could your portfolio handle a sudden systemic shock?

Drawing down your portfolio, would also cut your overall holdings, and lose your opportunity for investments. I feel that the key area would be from age 50-60, where things like CPF RA will be formed, and an accurate snapshot starts to form where you will be at retirement.

Ideally holding dividend paying stocks for continued passive income, possible reinvestment into the market to increase your dividend yields, at a latter age would be a good conservative strategy.

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Yang Teng
Yang Teng
Level 9. God of Wisdom
Answered 2w ago

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