Monday, June 30, 2008

Investing to get a retirement income

Dear Mr. Tan,
You have always talked with much sense & wisdom. I would like to seek your views.

I have been told by my insurance agent that with my impending retirement, it is good to invest in Investment Linked Policies (ILPs). Let the investments grow and sell little bit by little bit, when I need money.

But with market turbulence and falling equity prices, I have a feeling that this may not be the way to invest. What is your opinion here. Please help out with your opinion.
E

REPLY

Please read these FAQs and see if they are helpful in your decision:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/seniors.html

If you are investing for the long term, say 10 years or longer, it is all right to invest now. You can ignore the market turbulence in the meantime. It is difficult for you to catch the right time to invest anyway. In a turbulent time right now, you have the chance to buy the equities at a lower price and make a bigger gain when the market recovers.

It is all right to invest in a ILP and have a monthly withdrawal to get your retirement income. You should choose a single premium ILP (where the upfront charges are 2% or less, and the annual fee is less than 1%).

Wish you all the best.
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2 comments:

Khiat Han Hwee Adrian said...

If you can get an investment with 2% bid-offer and a fund with expense of less than 1%, it means you must do your own research and DIY your own investments.

Planners in Singapore will unlikely find such fund for clients unless they work for a charity organisation, paid by government or are given an advisory fee for giving advice. (Because such low cost means no adviser get paid, except the fund houses)

June 21, 2008 1:48 AM
Wayne said...

I don't think it is advisable for a person nearing retirement to go into ILP.
Get another agent or adviser who really cares, preferably an IFA.

July 05, 2008 10:04 AM

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