Thanks for sharing your thoughts on this topic. As someone in their 60's, I think it's also worthwhile to bear in mind that at this age, you don't want to be spending your days analysing the market gyrations etc, so you tend to want to look for predictable, steady income. Growth would be nice but might not be a priority. Of course, you also have to recognize that events like covid etc are completely unpredictable and what was a predictable, steady income provider, can become a 'dog' in a very short time. So, diversifying is still the best way to mitigate that risk and avoid being overly dependent on one sector, when thngs turn south. Thanks again though. These types of discussions are stimulating and useful so keep them going.
By the time we grow older, our expenses will shrink too cos our appetite will be smaller and lifestyle much simple. Seniors in Singapore have also many discounts too. We probably will need enough savings for more travels. And also keep ourselves healthy and have the adequate health insurance so that we can keep our healthcare expenses low.
This video is very educational. Thanks guys! Like to hear from you about how you would budget your retirement expenses at 60, 65 and 70 year old. If possible, can we have some real life cases for a sense check. Thanks!
Very good sharing. Thanks. My own plan is simple. CPF ERS for both me and my wife, one condo for rental, and some dividend SG bank stocks and REITs (about 10 from STI components)
The correcr calculation should be, take 2025 FRS as 213k accumulate at 4% to 2035 will hit 315k. So at age 65 start cpf life standard plan, you get $1700 estimate monthly. Thereafter your retirement account all money will go into a cpf life account and 315k will deplete at age 85 which 20 years later. So meaning you draw down for 20 year is 419k for 1.7k per month your return us about 3% only. Moreover life expectancy in Singapore is 85. Only 10% of cohort can out live 85 . Unless you out live if not cpf life is just like private annuity
The $1,670 payout is at age 65, so it makes more sense to me to calculate the yield based on your FRS contribution to CPF Life at 65, which would work out to be around $305,000, and not using the FRS at 55 ($205,800). Based on this, the yield is closer to 6.5%.
I agree, I have the same thought, should compare at 65.. Btw the principal does not matter, unless if we talking about passing it down.. But in general, we dont care as much about principal in terms of CPF Life..
@@Jinsh0 Actually it does matter, when you want to calculate effective yield. The assumption is that the principal is not touched. But for CPF Life, the principal sum gets less and less as you draw down. Imagine someone passes on right at the point when the principal reaches 0!
The yield that rusmin is talking about probably is this. Assuming this person is 55 this year and set aside FRS ($205800) The monthly payout expected = $1650 Yearly payout received = $19800 So the 9%+ should be = 19800/205800 x 100% = 9.6% dont think he take into account the interest earned from 55 to 65 so it is just purely from the amount of money you put in.
Referring to Victor’s comments on moving to stocks which have a good and long record of paying dividends, can you please give some examples of SG stocks (apart from REITS and the 3 banks) which meet your criteria?
Thanks for the vid guys. According to The Intelligent Investor by Ben Graham, the purpose of bonds is not only to be used as income stream. Instead it is better utilised as a hedge against stocks as bonds can be seen as being inversely correlated to stocks. As such, your dividend stocks may not necessarily hedge against your stock portfolio. Would like TFP to do a more in-depth roundtable filtering which particular bonds to buy for Singaporeans, eg. China Bonds vs LQD vs TLT vs IEI.
Yes, that's correct. Bonds are often used to hedge against stocks because they usually have an inverse correlation with them. We are just comfortable with having a 100% dividend stock portfolio for retirement despite the higher volatility. However, this may change depending on life.
Before 40, I invested almost 100% in equalities. As years go by, I split into the popular 60/40 and eventually 40/60 (age >55) - equalities and fixed incomes/bonds respectively. For past 2-3 years, my average yield was over 5% p.a. In the coming years, I will be satisfied with average of 3.5% that still gives me passive income of more than S$10,000 per month. Also, i have been reinvesting my coupons/ interests and dividends collected to still ensure some growth from my portfolio. In this way, it’s unlikely that I have to touch my original capital sum…
Hello guys. Thanks for taking up my request. I manage to catch some good points. Just to share with others, recently AK make a good comment about Reits and Bank. Reits payout most of the profit and had to borrow money to grow. Bank on the other hand, don’t have to pay out all the profit but do keep some profit to grow.
FYI, not sure if u guys are aware, the interest for CPF Life is pooled, meaning the interest from yr FRS / ERS will form the payouts for not only yrself but the other CPF Life members So when u pass away, yr dependants will get nothing Better strategy will be to pivot to dividends as u guys mentioned
"Your dependents will get nothing" is technical incorrect. It depends on when you pass away, your dependents will get the remainder. It's called the bequest and it's a declining scale. CPF website has a bequest calculator.
Thanks for the video. From what Victor said, wouldnt it be too conservative, where the returns is sufficient to cover the expenses? But does not take into account peeling from the principal. i.e if i plan to “die with zero” is it too risky? How do we balance it?
To add-on: Currently, an online promo-marketing on listed Super Dividend Stocks. What's yours and today's panel take on such SDS investments? SDS are expensive or are they?
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Hi like to clarify. I understand that Individual can hold 200k max for ssb. Where does the another 400k come from if a million portfolio is 40/60? And any recommended broker to keep singapore dividend stocks for long term?
You can also invest in Singapore Government Securities (SGS) bonds. For Singapore securities, we prefer a Singapore broker with access to the CDP account. You can read more here: fifthperson.com/how-to-open-a-brokerage-account-in-singapore/
1. the 100 rule would work differently for us, because US has double taxation on dividend 2. Bond rates have dropped so much since the 100 rule was invented. When I was a kid, 10% or more govt bond was the norm. These days, bond rate barely beats inflation 3. Adam's question, what is the 1m portfolio drops by half? Answer: Have a 2m portfolio. 4. I have retired, 100% in broad based Index ETF, live off the dividend. Its less volatile too, gives peace of mind. No bonds.
It’s not true that bond returns are below inflation, I’m still holding bonds bought within the last year that pay above 7% to 9% dividends after taking away fees.
