Category: Finance

Making the Best of Your Savings!

How Much Money Did CPF Make For You in 2018?

If you read social media, you may get the impression that CPF is a terrible scheme that is concocted to “steal” everyone’s money. Here is a different view of CPF. In Singapore, your CPF account is the safest investment you can make with the highest returns. Unlike savings account that are insured up to $50K, your entire CPF savings is backed by the full faith and strength of the Government of Singapore, which has one of the highest credit rating that any country can aspire to. In short, there is virtually no chance that CPF will default on its obligations. And it is politically untenable to let that happen!

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HDB Lease Buyback Scheme(LBS): Before you sign the dotted line ….

As Singaporeans age and live longer, the government is rightfully thinking of ways to help seniors cope financially, especially those who do not have enough cash either in the CPF or in the bank but owns a HDB unit. At the same time, it wants to support the policy of “ageing-in-place”. According to HDB, “through the Lease Buyback Scheme (LBS), you will be able to monetise your flat to receive a stream of income in your retirement years, while continuing to live in it. ” That idea sounds quite decent. Since January 1, 2019, about 130,000 HDB unit owners are now eligible for the LBS. Before you sign the dotted line, here are 4 things you should know.

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Part II: Retirement Portfolio in Trump’s 3rd Year — Taking Cover

In the past week, there has been a lot of pain in Wall Street with the Dow falling to levels last seen in September 2017. All gains for 2018 is completely obliterated as we move into Xmas/New Year week – falling by about 1655 points or 7% in just 5-days! This is not a jolly season for most investors. Unfortunately, this downward spiral is not limited to just the US – the ripples are felt in Europe, Japan and China. Here are some of the things you should do and things you should also avoid.

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Part I: Your Retirement Portfolio in Trump’s 3rd Year – Stormy

Since Trump became president, I am sure even the financial experts have been puzzled and frustrated by the volatility in global markets. Most retirees have seen their portfolio yo-yo up-and-down with huge swings even on a weekly basis. A wrong tweet can cause major market movements! Most of the stock market movements were mostly not driven by economics in 2018 but more so by the actions of the Trump administration.

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Life Insurance: A Gift To Your Kids That Keeps on Giving

Running out of ideas about what to give your grown up kids for the holidays?  Try something boring like a term life insurance policy.  Yikes! Who wants a term life policy as a gift anyway?  If your kid is a young adult  in school/university or just starting to work, this is a great time for this gift.  Here’s why:

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Golden Rule for Retiring – Never Run Out of Money

The most nasty problem about retirement financial planning is not knowing how long you will live.   Therefore, it makes perfect sense to adopt this golden rule: “Never Run Out Of Money”.  That means you may want to take the most conservative approach in managing your nest egg.  But it is not that easy.  Putting all your savings in a bank’s fixed deposit sounds logical but at the current low interest rate, you may be making reals losses in your purchasing power if your returns cannot keep up with the pace of inflation.  The key here is to make sure that your portfolio has a good balance between safety and returns that can outpace inflation.  

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5 Reasons You Should Max-Out Your CPF Life Contribution.

Since 1 in 3 Singaporeans will likely live past 90 years, one of the biggest challenge is to make sure you have the financial means to have a reasonable quality of life.  In reality, the biggest challenge that most older persons worry most is outliving their savings.   In simple terms, you can protect against the risk by using an insurance product known as life annuity.  Typically, you hand over a lump sum to the insurance company who then agrees to pay you a regular stream of payment (typically monthly) for the rest of your life.

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Must Read: “Ready for 100: Preparing for Longevity in Singapore”

The good news – living to 100 years old is within the reach of many of us  in Singapore retiring today.  Singaporeans will live longer than many nations in the developed world – a study in 2016 shows that HALE(Healthy Life Expectancy) at birth ranks Singapore #1 in the world.  Singapore must have done something right because HALE has improved a whopping 4.9 years from 2000 to 2016 – unmatched in any developed world.

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