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Kenneth Fong

Marketing Manager at Seedly

18 Apr 2019

Retirement

What should you do with your index fund when you hit your ideal retirement age?

Even though plenty of people and articles talk about Index Investing, no one really talks about what happens after.

Let's say A starts at 25 yrs old and buys the STI ETF using DCA all the way till he hits 55 (his ideal retirement age). Then what? Live off the dividends? Liquidate the entire fund (at the mercy of the price of the market then)? Sell off the accumulated index fund bit by bit? Let's say he lives till he is 80 years old... Would it really be enough for his remaining 25 years?

Discussion (1)

What are your thoughts?

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I would leave it there (age 55) earning dividends and capital appreciation, and only sell off a portion of the equity if I forsee a need to use more money in the near future. Maybe only at 65-70 would I sell off the remainder (depending on health situtation).

This depends on a variety of reasons. It depends on the person's own risk threshold at that age, how much saving he has accumulated over the period, if he wants to live through his golden years luxuriously, if he wants to impart a large portion of his wealth to the next generation, etc. There is an interplay of different factors and it is up to the individual to gauge when to sell.

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