Hi Theuya,
Are you referring to RetireReadyPlus (II) which draws down on the principal amount over time? I believe the IRR is better than that. If not, there are also lifetime income plans from Manulife which preserve your capital for the next generation while giving you a lifetime of income.
But before we talk about that, do note that CPF Life is the best annuity in the market and it will likely remain that way. However, the payouts are meant for a very basic level of retirement and if one wants to have a little more payout to have a better quality of life, then this is where a private insurer's annuity will come in to supplement CPF Life. One should use CPF Life as a baseline (unless you are not SC/PR) and then private annuities stack on top of that.
If you are looking for guaranteed income in retirement, then over and above CPF Life, a retirement plan can be a good way to get the income you want. There are many plans from various insurers and you'll want to evaluate them based on a number of factors, including
Guaranteed returns (the guaranteed irr)
Potential returns (non guaranteed irr)
Fringe benefits such as additional payouts upon disability, etc
You can find the plan that fits you based on what you are looking for, for example
About the projected returns, I would suggest you start by looking at the guaranteed yield as well. Considering that bonuses are guaranteed once credited, I would say that 3%+ in the long run is likely possible, and if the yield does reach 4%, that's a plus. So we do need to have a realistic view of what's achievable with a retirement plan.
Now, about RetireReadyPlus, it is a decent plan, and I would say it's probably quite good in achieving your goals, but you can also consider NTUC's retirement plan as well, which is also popular amongst my clients. Or, you could even split your budget between two plans in order to stagger them, with one plan starting earlier to give you the option of an early retirement, and another plan coming in later to allow you to hedge inflation in your golden years.
Incidentally I have a comparison table which, while probably not a reflection of your specific situation, should give you an idea of what plans are on the market, as well as their returns.(It happens to be for a 40 year old). This is really a very simplistic view of retirement planning and only addresses one single plan, actual planning needs to take into account a lot of factors.
Ultimately, the best retirement plan (or plans) is one that suits your situation and needs, so I do recommend that you have an indepth discussion with an independent financial advisor to find something that suits you and your retirement strategy.
Hi Theuya,
Are you referring to RetireReadyPlus (II) which draws down on the principal amount over time? I believe the IRR is better than that. If not, there are also lifetime income plans from Manulife which preserve your capital for the next generation while giving you a lifetime of income.
But before we talk about that, do note that CPF Life is the best annuity in the market and it will likely remain that way. However, the payouts are meant for a very basic level of retirement and if one wants to have a little more payout to have a better quality of life, then this is where a private insurer's annuity will come in to supplement CPF Life. One should use CPF Life as a baseline (unless you are not SC/PR) and then private annuities stack on top of that.
If you are looking for guaranteed income in retirement, then over and above CPF Life, a retirement plan can be a good way to get the income you want. There are many plans from various insurers and you'll want to evaluate them based on a number of factors, including
Guaranteed returns (the guaranteed irr)
Potential returns (non guaranteed irr)
Fringe benefits such as additional payouts upon disability, etc
You can find the plan that fits you based on what you are looking for, for example
When you want the payout to start
For how long do you want the payout?
About the projected returns, I would suggest you start by looking at the guaranteed yield as well. Considering that bonuses are guaranteed once credited, I would say that 3%+ in the long run is likely possible, and if the yield does reach 4%, that's a plus. So we do need to have a realistic view of what's achievable with a retirement plan.
Now, about RetireReadyPlus, it is a decent plan, and I would say it's probably quite good in achieving your goals, but you can also consider NTUC's retirement plan as well, which is also popular amongst my clients. Or, you could even split your budget between two plans in order to stagger them, with one plan starting earlier to give you the option of an early retirement, and another plan coming in later to allow you to hedge inflation in your golden years.
Incidentally I have a comparison table which, while probably not a reflection of your specific situation, should give you an idea of what plans are on the market, as well as their returns.(It happens to be for a 40 year old). This is really a very simplistic view of retirement planning and only addresses one single plan, actual planning needs to take into account a lot of factors.
Ultimately, the best retirement plan (or plans) is one that suits your situation and needs, so I do recommend that you have an indepth discussion with an independent financial advisor to find something that suits you and your retirement strategy.