Asked 3w ago
It depends on your objectives and time horizon. An endowment is typically used for a long term need eg. children's university fund etc while a retirement plan is meant to supplement your CPF payouts during your retirement years.
If your objective here is to have a supplement to your CPF payouts, then you'll want to get a retirement plan. This is also because payouts for retirements start during your retirement age while an endowment plan is often used for the near future to fund an expense, as a form of savings etc. If you're looking at something for the near future, you may want to opt for an endowment plan.
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There is no real need to choose. The plans in Singapore now come with both lump sum and stream of income benefits options that can be executed after 10-20 years of the policy term.
In truth either way works. If you want a controlled stream of income, a retirement plan will provide you with just that. Due to the longer duration of retirement plans compared to endowments, the guaranteed yield on a retirement plan is generally better than an endowment that matures in a lump sum. Retirement plans are generally better used to supplement CPF Life's payouts. However, if you were planning to start retirement with a bang, like go on a round the world trip, then a lump sum maturity amount might be better.
You can probably hedge your bet and get both if you are not sure of what you need. If you are not certain when you want the lump sum maturity, then you can consider a lifetime savings plan whereby you have flexibility to withdraw part or all of the accumulated money, but if not, the amount inside will keep growing over time.
I will personally prefer to have regular payout as a stream of income and keep the rest invested. 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 amount to be invested, 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.
Hi there. The simple answer is you will want both. One that gives you the lump sum to do what you want to do, and the other that continues to hold your money so you don't spend everything all at once.
Generally speaking though, it is usually the endowment that provides yearly income that pays better, as your money is with the insurer for a longer period of time so they are able to provide better returns.
Do feel free to have a casual chat with me here if you like to find out more. I cover 9 major insurers like Aviva, NTUC, AXA, Manulife etc.