What sort of retirement vehicle(s)/ asset classes should one look into for one that is going into retirement?
Using life STYLE investment criteria as a guide.
What are the options available?
Annuity, private pension scheme, universal life investment linked plan, on/offshore investment product like capital protected product, fixed income & etc
Why do you suggest such vehicles/ asset classes?
Is not so much what you have, but is the continuous of liquid cash would allow you to enjoy your golden retirement life.
How would these allocations differ if the individuals are in their 30s, 40s an early 50s?
- Rule of 100 as investment guide.
- Asset Allocation Model: Volatility Reduces Over Time
- We suggest 30/70 assets allocation model for moderate risk appetite retirees. i.e. 30% (aggressive portfolio) & 70% (conservative portfolio)
4. For retirement investing alone, how often should this portfolio be reviewed?
How should the retirement portfolio be adjusted with the changing market conditions?
- It shouldn’t affect much with any changing in market conditions upon our retirement.
- Your retirement portfolio should offer you the peace of mind. Sufficient & consistency in generating the annual income at minimum risk should be your main consideration. After all, life is short & be happy!
5. In what circumstances, can the individual “dig” into their retirement investing account? (e.g. only in times of medical condition and running out of emergency fund…etc.)
- Disability & critical illness – immediate lump sum medical cost & long term nursing care. Buy enough comprehensive insurance plans when you are still financially & physically fit. So that, you can transfer the future unforeseen cost to insurance company. The most stupid financial decision to make is try to be your own insurance company.
- Live too long. Hence, annuity or private pension scheme is an ideal financial solution here.
6. What are the other factors that can one take note of if s/he wants to make her/his nest egg last longer?
Next Question would be “How much money do you think you need to retire happy?”
A comfortable middle class retirement implies the ability to:
- Maintain the lifestyle enjoyed while in full time employment.
- Spend on day-to-day items without having to pay close attention to a few dollar her or there.
- Repair or replace household items such as furniture and appliances.
- Treat yourself to the occasional luxury or vacation.
Above all a comfortable retirement implies having financial security. Not having to worry about maintaining your lifestyle throughout your retirement life is very important.
“Comfortable” also implies having enough capital to provide a reasonable standard of nursing care should it be required.
- To understand how money you need at your retirement age. Rule of thumb is about 70-80% of your current life style expenditure.
- To calculate how much is your total retirement fund value at present time & balance of short for to go. From here, we can help you to formulate your next investment strategies.
- Appoint a qualified & licensed independent financial planner (IFA) to provide proper financial advice to you. An IFA is independent of any financial product. They act on your behalf and recommend the most suitable financial products if any. Their independence enables them to research products from across the market. In contrast, some other types of advisers, such as ‘tied agents’ advisers who operate in high street banks, mutual funds and life insurance companies, have contractual obligations to one or more product providers which means the advice they give is limited to the products of these providers
- Again, retirement mean differently to different people. That’s why we need a plan.