A formula for retirement planning

A formula for retirement planning

SINGAPORE - Most financial planning discussions are likely to focus on saving and accumulation towards a retirement goal.

But with more Singaporeans getting older and approaching retirement, financial advisory firm Providend has turned its attention to decumulation strategies - that is, helping clients navigate the stressful decision of how much to withdraw at retirement, and how to still preserve some capital for bequests.

After two years of study and development, the firm has come up with a framework, which it calls "RetireWell".

Says the firm's chief executive Christopher Tan: "We realise there are three things retirees look for. One is assurance of retirement income. When you are retired there is less emphasis on returns, and more on the reliability of returns.

"Two, there should be some level of safety especially at the early stage of retirement. And, the plan cannot be static; there must be flexibility to change as circumstances change."

Asset allocation

RetireWell seeks to take into account major concerns such as longevity or the risk of outliving your assets; inflation; investment volatility and overspending.

The framework basically divides up an individual's pot of savings into a number of buckets, each with its distinct asset allocation, investment horizon and expected return.

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