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Monday, February 11, 2008

Investment Tips for a Retiree

Hi Mr. Tan

There are many articles written about retirement planning and the investment strategy to achieve the retirement goals. However, they do not discuss the appropriate investment and draw-down strategy for retirees like myself – persons who is now faced with what to do with the money accumulated from years of saving.

I have spoke to many independent financial advisers and most of them asked me to allocate the savings into equity, balanced or bond funds according to your risk profile. Some would suggest putting part of the money into annuity.

However, given that all existing annuity plans only achieve between a return of between 3.5% to 4% returns p.a. and payment out from 62 year old, one would wonder if it is advisable to do that?

Also, in reality, bond fund is different from bonds and does not provide fixed coupons for retirees with money to live on. Moreover, judging from current market price bond funds is just as volatile as the equity funds.

You would be doing us a great service if you would write a series of articles giving practical advice on investment strategies and instruments that would benefits a retirees with various amount of saving, say $500k, $1m, $2m, investable income with a goals of 6% to 8% return?

Some of these questions retirees need answers are:

· How should I allocate my retirement funds into cash [no of mth expenses?] and the various investment instruments?
· What are the various financial instruments [UT, ETF, Annuity, property etc] for investing and where can I find them?
· Would investing in index EFT better than UT?
· What financial instrument gives better return than FD, saving account and having similar liquidity need to meet monthly expenses?
· Where else can you find articles discussing this aspect of investment planning for retirees.

REPLY

Can you read the FAQs posted in my website,
www.tankinlian.com/faq

In particular, the following FAQs:
http://www.tankinlian.com/faq/seniors.html
http://www.tankinlian.com/faq/returns.html
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/retirement.html
http://www.tankinlian.com/faq/cpf.html

Let me know if you find them to be easy to understand and helpful to answer your questions.

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