02 June 2014

Golden Harvests for Golden Years

The weekend papers on 1 Jun 2014 carried a couple of interesting advertisements.  Thought it was interesting to compare and contrast each offering ...


Manulife

The advertisement from Manulife suggested 4 ways to fund a retirement income:
  • Insurance with Income Payout Facilities.  Provides a regular income stream during retirement.
  • Dividend-Paying Stocks and Unit Trusts.  Dividends are used as an additional source of passive income during retirement.
  • CPF Life.  Provides monthly payouts of $1,200 (less for women).  
  • Unlock Property Value. Renting out in full or in part, reverse mortgage or HDB Lease Buyback Scheme (LBS) so as to capitalise on our property.

Aggregate Asset Management

On the other page, an advertisement from Aggregate Asset Management featuring Teh Hooi Ling explained the Rule of 72.  It illustrated the returns via various means of investments:

  • Bonds/Unit Trusts @ 3 to 5% p.a. Over 24 years, $100,000 would have become $200,000.
  • Index Funds/ETF/Blue Chips @ 6 to 7% p.a. The same $100,000 would have become $400,000.
  • A Basket of Value Stocks @ 10 to 12% p.a.  $100,000 would have become $1,600,000.

The 2-3% spread from Unit Trusts compared to ETF probably accounted for the management fees of such actively managed funds compared to index funds.

Related:
CPF - A Lifeline for Retirement or Till Death Do Us Part