Improving retirement funding adequacy for my father.

To have aged parents is our good fortune. However, they could be a drain on our financial resources if they do not have adequate savings to fund their golden years.

Add to this the greater possibility of being stricken by illnesses which require hospitalization or even long term medical care, we could have a very stressful situation on hand.




In recent years, I have been suggesting that we contribute to our parents' CPF accounts. Contributing to their CPF Medisave Accounts (MA) which earns 4% per annum would, in effect, make the government help us grow this contingency fund.

However, my dad's CPF MA has been maxed out. 

So, this year, for his birthday red packet, although I will be doing a voluntary contribution to his CPF Account, the money will go to his OA and SA instead of his MA.




If my dad's MA is not maxed out, the bulk of the voluntary contribution would go to his MA as he is above 65 years of age. 

See table below: 

With the money going into his OA and SA only, he would earn 2.5% to 4% per annum from this voluntary contribution. 





No longer having an earned income means he would be able to withdraw this money anytime he wants although withdrawing only the interest income from his CPF Account, leaving the principal untouched would be a better idea.

Good food and good company = Good celebration.
See how we celebrate birthdays: HERE.

Happy Birthday, 我的老爸!

Related post:
2016 changes to the CPF & SRS.

When can gambling make more than investing? (Ten Experts On When The Next Recession May Hit. Added on 20 August 2018.)

Reader:
hello AK, just curious and wanting to understand further your thought process on HLS. 

Would knowing about the bumper dividend have changed your decision? 

I assume the announcement wasn't made yet when you sold.



AK:
Alamak. This is like asking me if I can see the future...

Not a meaningful question 😉





Reader:
hahahaha clearly I didn't give a good illustration
put it another way, how would a bumper dividend + increase in price of a stock influence your decision whether to hold/sell/whatever? 

Do you consider how long it takes under normal circumstances for yearly dividends to cover the bumper dividend? 

(eg 4 years of dividends for HLS assuming $0.025 per share, to account for $0.100 bumper dividend)






AK:
it is about what we feel is a fair price to pay... 

some feel that they want to get into HLS even at 60+c and to get the special dividend... I don't think it is a good idea... 

I think 52c was a fairly good exit price... there is no accounting for prices.

If people who buy from me make some money, good for them. I try not to overthink.





I am still holding on to 50% of my original investment in HLS. 

It has become free of cost and I see myself holding on to this investment for many more years to come. 

This is just like my investment in OCK which also became free of cost when I sold half of my investment after its share price doubled a few years ago.

I won't lose sleep over the fact that their share prices went higher after I sold half of my investment. 

I made good money and will probably continue to make money from these investments. 

To me, that is good enough.





If I had a working crystal ball and could see the future accurately, I would not be an investor. 

I would be a full time TOTO gambler. ;)

Anyway, to sleep better at night, we won't be wrong to avoid the phrase:

"If only I had known."

It has no practical purpose.
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Ten Experts On When The Next Recession May Hit, 20 August 2018.






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