New Endowment can buy ? No

Manulife Income-Secure - DBS agent quoted me the above Manulife policy yesterday.

In short (Pay 5, Collect 60 @60yo)

Pay $10k x 5 (Less Yr1 bonus $800).

Projected lifetime payout: $1,000 p.a. for 60 years, from Year-3; based on the BI 4.25% Par Fund Performance.

My Comment:

1. For me, this fixed income policy really cannot buy.

Compare with CPF OA 2.5% (Reference#1)

2. Putting into OA @2.5%, risk free, capital guaranteed,

$50,000×0.025 = *$1,250* p.a.

In fact, it won't be attractive for anyone above age 55 who already can withdraw from OA interest.

3. I got back to her that we don't need to meet. Besides the BI at 100yo:

At 4.25%, return is 2.84% p.a.

At 3%, return is 1.87% p.a.

Compare with DBS Stock (Ref#2)

4. lol. If I put into DBS $50k shares, I will have dividend $2k p.a. easily.

Compare with (T-bills & banks interest rate)(Ref#3)

For short term which these money market is still good, invest in them first.

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My takeaway

1. Tradition new endowment market is not so bright for retirement; (as we have two basic stable references: OA 2.5% & DBS stock yield 4%+.)

2.  Those age 55 and above can first topup to their RA for higher lifetime payout, if their RA is still not MAX MAX to ERS.

3. Higher yield higher risk ILP or Leveraged insurance products - For me, better stick to Local bank stocks & Resale Endowments.