Asked by Anonymous

How to evaluate a good annuity plan and when is the best time to start it? Thank you.

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  • Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered on 17 Mar 2019

    1) High capital guarantee

    2) Flexible payout

    3) High Projected Yield (above 4%)

    4) Pays out for life (If you want shorter, get a retirement plan - the difference is that a retirement plan pays down your capital to 0, while a lifetime annuity protects your capital)

    5) Benchmark it against CPF Life. (Many people think CPF Life is the best, but it may not be. It's definitely bloody amazing, but I can confidently say not the best - start another private annuity early enough and you can contribute lesser premiums to get a higher projected payout with 0 capital loss, unlike CPF Life)

    Start one as early as possible. It's one of the best ways to receive a guaranteed passive stream of income for life. Even dividend income and rental income are active streams as you have to manage your assets, unlike the annuity.

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