As my main income comes from doing RU-vid, I hope this can be an added assurance to any one of you who needs help for Insurance Planning You can reach out to me here ➡ tally.so/r/wky9XJ My Story on Why I Became Certified ➡ demizhuang.com/life-updates-database/my-new-journey-and-you-are-included
I bought a 20y endowmt in my 30s. Back then, interest rates were higher. So when it matured 10y ago, it gave me a compounded interest of around 4.5%. Beat CPF SA 4% compounded for 20y! Not bad at all! But now, except for the last 2y where interest rate kinda gone crazy high, it’s generally low interest of 2% & maybe less. So maybe CPFSA makes more sense, regardless of the interest rate out there, it’s more predictable than endowmt. But instead of topping up your SA, you could consider topping up your MA instead. Why? For a few reasons: 1. Both give you tax relief of up to $8k contributn. 2. Both earn you 4% compounded interest. 3. You have the option to use MA for your medical expenses (hospitalizatn expenses not covered by insurance & paymt of hospitalizatn insurance premiums) - an optional medical safety net not offered by SA top-up, or if you can afford, choose not to touch the MA so that it will grow faster. 4. Once your MA reaches it max ceiling, that’s when the magic of SA “turbo-charging” starts. The annual interest earned from your MA will now overflow into your SA. The portion of mthly CPF contributn that’s supposed to go into your MA will now be channeled into your SA instead. So now, your mthly SA growth & your annual SA interest will grow at a higher rate than before your MA is maxed. Your SA will now compound faster year-on-year.
I did the same when I was younger and I regretted. Do not ignore the "non guaranteed" part. Cos it could really be achieved and out run SA at an earlier time. U don't have to choose between the plan and topping up SA. so there is really no need to stop it now.
same..... mine was $150/mth for 25 years... and the payout is quite pathetic.. but ok la lucky not much per month, and i can get back $1k now yearly so i can invest it somewhere else. now after watching your vid i am thinknig of cancelling also..
good sharing! The endowment is redundant if we already have CPF. Early finance literacy may prevent us from making bad decisions before engaging FA. Cheer!
Smart move! I have cleared most of ILPs, which have been nothing but a huge disappointment across most of the major insurers, with some resulting in losses! Nowadays, I rather manage my own investments and just make do with the minimum for mandatory one (for me at least), which would be to upgrade my CPF MediShield to Gold Max A with AIA (not the best in terms of pricing) for hospitalization coverage.
I would say I regretted buying. But then currently already at my 8th out of 25 year, and I have looked it at the way which I pay $2.4k/year with $1.5k being given to me annually since the end of my second policy year (Option: To re-invest back or spend). So in a way, I am paying $900/year. Still I find that Endowment plan doesn't make sense for anyone in Singapore.
Wa I hope it reaches the breakeven point eventually for your plan. But I actually do think it can be suitable for a certain group of people. It really depends on how they are with their money and the plans they have for retirement. But for people who knows how to invest / manage their money well enough, yeah its unnecessary.
Have you cancelled the endowment? I think one important thing to look at is the performance so far. However, I may kind of agree with you that you might be better off investing in other investments as you have a better knowledge.
The catch for CPF SA Cash Top Up is untouchable at all. Eg. If u top 20k and reached 230k and say u reach 55yo now, with FRS of 200k, u can only allow to withdraw 10k. The 20k + the interest it compounded over the yrs are locked and is not considered part of FRS. Do think twice again or check thoroughly with CPF. I only discovered it is not part of FRS at 55yo.
I was searching on this too and also have the same thoughts as you but some articles + cpf website example kinda indicated above 55 amounts above FRA can be withdrawn… to this I’m still not sure but I do have to do CPF top ups to reduce tax + build retirement funds since I’m ‘self-employed’ now so when it comes to this decision I think I’m more or less certain.
@@DemiZhuang it will be forever there till 65yo and then enroll to CPF Life Plan, so in another way, this amt is forever not withdrawable. Isnt it scary?
Hi Demi! I'm in a similar situation and have been considering and have a bit more time till my next premium since I pay my plan yearly. With the new CPF change and no more CPF shielding since SA closed after 55, do you think this will impact your planning and choice?
It's a no-brainer. Get your money out! The poor guy with the 1% interest actually lost money? He lost the buying power of his money and also inflation? You need to put it somewhere that keeps up with inflation somewhat? 1% is a disgrace keeping it in a checking account would yeald the same intrest? The company can come up with endless reasons not to pay you what you think you should get at the end? That company needs to be investigated! Don't lock your money away in that company! You could find better returns in an average savings account with your bank?
I cut my ILPs. Your calculation supposes that you can continue to top up your SA but there’s a cap of FRS. Top up your MA to full first then throw max to SA.
Have you tried to contact those 3rd party endowment plans reseller? See if they want to buy over your plan? Heard they offer slightly higher than the surrender value
