Dear Mr. Tan,
I am in my mid 20s. I need your advise on planning for retirement, savings and life protection. Frankly speaking, I have checked many products and are confused with what I need. I do not have much spare cash in the past as I have dependants.
My current pay allows me to set aside about 20% for savings. If I have $500 a month, what are the insurance/ savings I should save? Can I plan for a comfortable retirement at 50 years old?
My agent recommended me Vivolife, limited payment for 10 yrs. But I am also not sure if the critical illness portion is guranteed. Based on my savings, should I buy Vivolife? Or go into endowment? Or save up as cash? Or medical?
REPLY
Please read these FAQs
http://www.tankinlian.com/faq/fptips.html
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/choice.html
1. take up term policy to cover for your dependents (10 X annual salary).
ReplyDelete2. Get a Personal Accident
3. Private shield plan if you prefer hospital ward higher than B2
4. regular investment with low charges. example no advisory fee & mortality charges.
RETIREMENT SAVINGS INTERACTIVE CALCULATOR:
ReplyDeletehttp://www.cpf.gov.sg/multimedia/
retirement/retirement.html
MAKING AN INVESTMENT CALCULATOR:
http://mycpf.cpf.gov.sg/Members/Calculators/mbr-Calculators.htm
DIY FOC !
Did the agent do a needs analysis before arriving at conclusion that you should buy vivolife? How did he conclude to a 10 years limited payment?
ReplyDeleteDo you intent to have insurance protection for your whole life?
Ask your agent term policy alternative to vivolife?
Don't buy vivolife. What can it give you? protection and saving? insure you for whole life? What for ? It is the most expensive way and it deprives you of the much needed protection and saving for your retirement or for other needs.
ReplyDeleteI assume you are single and no dependents NOW.
What you need is income protection in the event of critical illness, disability income insurance and medical insurance. You DON"T need other insurance NOW.Don't listen to those bullshit about buying insurability and the craps. Don't preempt your future. Take a step at a time.
For medical insurance upgrade to a as charged private shield to be paid with CPF medisave.This is to take care of treatment in case of CI.
#1. Buy a disability income insurance with a 6 month deferred period and monthly payout of $2500 until 65 years old.
Premium for this is about $1200 per year or $100 a month.
#2. For CI coverage buy $150000 sum assured to cover for 5 years of your income.Buy a 10 year guaranteed renewal term for $185 a year or $16 a month.(cheap or not?)
#3. Your total EXPENSES (emphasis intended) on insurance is $116 per month. You are left with $384 for regular saving and investment to accumulate for your retirement in 25 years time.
#4. Assuming a 8% return pa , your investment in well a diversified asset allocation portfolio should give you about $340,000 when you retire at 50 years old.
The advantage of this plan is you are in control and not the insurance company.See the overall benefit; adequate protection and high return.... But the first step is to get a an HONEST AND COMPETENT ADVISER WITH CFP QUALIFICATION and not an insurance salesman who is only interested to sell you a product, like vivolife which is NOT suitable for you but carries a high commission for the agent.
I hope you study my proposal carefully and get someone qualified to implement for you.
Dear Zhummeng,
ReplyDeleteIn summary what you recommended is avoid all the bullshit participating and investment-linked type of products and consider only the cheapest protection types. I TOTALLY agree with you.
Zhu, we have to find a way on how to advise the public to ignore all forms of particpating and investment-linked bullshits being sold in the market.
THis is another form of National Service.