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Don't do silly things and we can retire smart too.

Tuesday, December 13, 2016


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A "special feature" (what I would call an advertorial or sponsored blog post if it were to appear in my blog which it won't) by a fund manager in The EDGE:

"Your CPF may prove inadequate upon retirement because of several factors."

The fund manager suggests "that both young and middle aged workers can invest in multi asset funds for diversification benefits." Do this and retire smart.

AK didn't do this.

How like that? AK in trouble?


Is AK going to run to the fund manager and put some money in multi asset funds? AK will kaypoh a bit and respond to the 4 points raised first. 

Point for point:

1. Be prudent in using our CPF-OA money. Remember, our CPF money is primarily for retirement funding. Just because it can be used for other purposes does not mean that it should be.

2. If we have excess money in the CPF-OA (i.e. no other use for the money), think about doing OA to SA transfer to earn higher interest of 4% to 5% per annum. Think about possibly doing cash top ups to the CPF-SA and enjoy income tax relief (for the first $7K of top up per year).

3. Don't use our CPF money for investments (unless Mr. Market makes us offers we cannot refuse). Think of the CPF as the investment grade bond component of our portfolio.

4. Have a good annuity that will pay us for life and the answer is, yes, CPF Life.

Aiyoh, simi answers? AK just talking rubbish again, right? I blur.

No one cares more about our money than we do.

Don't do silly things like asking barbers if we need a haircut and we can retire smart too.

Related post:
Building a cornerstone in retirement funding with CPF.
If you haven't watched this before, please do.

8 comments:

betta man said...

Speaking of doing the right thing, recently I attended a workshop at LLI. I spoke to an uncle in his 50s who is unemployed after he was retrenched in the O&G industry. He mentioned to be that he had friends in the same industry who bought multiple properties and is currently retrenched as well. He mentioned that he is happy to stay in a HDB flat.

He shared that he has one son in polytechnic and he intends to apply for financial assistance. A lady who is also unemployed said in a mildly stressful tone that she has 3 children. Is right-sizing of family the right thing to do ? I believe different people would have different opinions.

This uncle also conveyed that his friends working in a prominent engineering company received letters asking them to opt for voluntary retirement after 59.

Insight from this uncle was the most important take away I had from this workshop. It is important to learn from people who has walked the path before us.

betta man said...
This comment has been removed by the author.
AK71 said...

Hi betta man,

His friends with multiple properties are probably having cold sweat now. -.-"

We should Don't think and grow rich. And If we are not rich, don't act rich.

betta man said...

Imagine losing your job and your property investments are making a loss:

http://www.tnp.sg/news/singapore/boomtime-property-buyers-now-big-losers

AK71 said...

Hi betta man,

Like children, many of us learn better through suffering pain. :(

ScOpIoN said...

After so many years, so many repetitions, there will still be someone who doesn't believe in the OA-SA transfer. Kept telling me that they have to make payments for their home. My suggestion to them is always the same, if you can't calculate the repayments with interest, it's better off staying with their parents. Harsh but what's good on the ears sometimes isn't good for the heart. It's better to live in a smaller home now than having to downgrade to a smaller home when we are 70 and older.

AK71 said...

Hi Scopion,

I would always encourage home ownership but it must not be home ownership at any price. It has to make financial sense.

Consumption when we have to stretch our resources very thin is not a good thing. Consuming when we do not have the resources to do so is worse.

AK71 said...

Reader:
I have been reading your blog recently on cpf and had done VC to my cpf-ma.
However, there is a huge gap between my current cpf-sa and minimum frs amount.
I worried not having enough in my cpf-sa to meet minimum frs when im 55. In addition, I am thinking whether to take up a retirement plan with an insurer to supplement my retirement.
Could you give me some advise?
Thank you.
Btw, im in my mid 30s

AK:
I believe in using the CPF as a cornerstone in retirement funding. If you have yet to max out your CPF, why are you thinking of getting a private retirement plan?

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