FAQs
How much of my monthly income should be allocated to insurance?
Rather than starting with a percentage of income, it is more practical to begin by determining the coverage amount you actually need. This figure represents the financial protection required to sustain your family’s current lifestyle for the next 10 years should you pass on. Adequate coverage ensures, for example, that your child can continue with university education and your spouse will not be forced to take on multiple jobs due to the loss of income.
To calculate this coverage, we first assess your annual household expenditure (based on your financial contribution), and adjust it for inflation. Once the required amount is clear, we then identify the most suitable insurance solutions. This can be achieved through either a participating whole life plan or a term plan—both offer the same protection, but premiums differ significantly. Whole life policies provide long-term value accumulation, while term plans are more affordable, and the savings can be redirected into retirement investments.
The same approach applies to critical illness and total disability coverage. By quantifying how much protection you need in these scenarios, you can then decide how much of your monthly income to allocate toward the most appropriate products. A professional adviser can help you prioritize your needs and tailor solutions accordingly.
While some advisers use the income replacement method (allocating a multiple of annual income), our preference is the expense-based method, which we find more realistic and aligned with actual household needs.
The rule of thumb is:
- 10 X Annual Expenses as coverage in the event of Death and Total Permanent Disability.
- 5X Annual Expenses as coverage in the event of Late Critical Illness.
- 3X Annual Expenses as coverage in the event of Early Critical Illness due to early recovery.
What are the types of investments I can do to plan for my retirement?
- Deferred Annuities
- Portfolio of diversified funds
- Whole life Plans (you will be surprised)
- Exchange traded funds
- Wholesale Bonds (only for accredited investors)
- Supplementary Retirement Schemes
- Singapore Savings Bond
- CPF Top-ups to meet Full/Enhanced Retirement Sum
- Reits and Shares
- Investments in properties
How much of my monthly income should I set aside for emergencies?
A common guideline is to build an emergency fund equal to at least six months of income. This reserve is meant to cover unexpected situations such as accidents or outpatient medical expenses. Rather than leaving these funds idle in a regular savings account, we recommend 3 months of savings placed in short-term, ultra–low-risk money market funds that invest in government bonds and fixed deposits. These instruments generally offer more competitive returns while maintaining high liquidity, meaning the funds are easily accessible when needed. This way, your emergency savings remain safe while also working harder for you.
What are the types of investments I can do to plan for my retirement?
- Deferred Annuities
- Portfolio of diversified funds
- Whole life Plans (you will be surprised)
- Exchange traded funds
- Wholesale Bonds (only for accredited investors)
- Supplementary Retirement Schemes
- CPF Top-ups to meet Full/Enhanced Retirement Sum
- Investment linked Policies
- Singapore Savings Bond
- Reits and Shares
- Investments in properties
As we enter our golden years, our risk appetite naturally decreases. The focus should shift from chasing capital gains to building reliable income streams that support a comfortable lifestyle. The goal is peace of mind—being able to enjoy retirement activities without worrying about market downturns, insurance premiums, or ongoing liabilities. By establishing diversified income sources that outpace inflation, we bring greater stability to our portfolio, ensuring steady cash flow while reducing exposure to market volatility.
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