Planning for your golden years doesn’t have to be a headache with WiseIncome, a multi-asset fund that provides a sustainable income stream to supplement CPF LIFE payouts in retirement. 

With inflation on the rise and economic uncertainties surrounding us, it’s only normal to feel worried about the future. This is especially so when surveys such as the OCBC Financial Wellness Index 2021 indicated that 8 in 10 Singaporeans underestimate the amount needed for retirement by at least 31 per cent.

Nobody wants to be caught unprepared, but how do you ensure your retirement plan is robust enough to tide you through? The first step is to get clear on your vision for your retirement. Some are contented to have a basic but comfortable retirement where they have a roof over their head and healthcare expenses covered. For others, they hope to enjoy their golden years by living the high life and travelling frequently.

No matter which category you fall into, there are certain risk factors associated with retirement you’ll need to consider, such as:

  1. Longevity – The risk of outliving your savings
  2. Overspending – The risk of running out of funds too quickly
  3. Inflation – The value of your savings eroding over time
  4. Healthcare – You’ll need sufficient insurance coverage to cover any medical needs so that a health crisis would not destroy your nest egg
  5. Investment risk – You’ll need to learn how to manage withdrawals for your retirement income while you continue to invest so you can further stretch your funds or beat inflation

While it may be daunting to think about managing the different risk factors, it helps to think about building your retirement income in incremental steps. At the base, your fixed expenses should be matched to the CPF LIFE or guaranteed payouts from retirement income plans. This income layer needs to be the most stable as it should pay out for as long as you live. The next level would be an additional retirement income stream – either from investments or dividends – to help finance lifestyle-related expenses such as travelling or dining out. Finally, you also need to factor in another layer of income, which comprise insurance plans intended to help you with your healthcare needs.

In this article, we’re going to explore why MoneyOwl’s WiseIncome could be a helpful tool for building that additional income stream for your retirement.

1. Diversified portfolio mix

Co-created by MoneyOwl and Fullerton Fund Management, this fund provides a mix of primarily Asian bonds, global equities and REITs, balancing between growth, income and stability. Even in today’s gloomy market outlook, WiseIncome is still a sound investment solution. Because the fund includes S-REITs, WiseIncome has done well in the inflationary environment as we have started to see rents increase as Singapore relaxes its Covid measures. At present, S-REITS is the best performing asset class compared to global equities and even global bonds. This has helped cushion the overall decline in WiseIncome compared to a typical 60/40 balanced fund.

2. Flexible payout options

As everyone has different retirement needs, this fund offers flexibility when it comes to how you want to receive your payouts. If you have enough cash to fund your current lifestyle, go for the no-payout option to reinvest your dividends for higher total gains. You can then cash out a more considerable sum of money upon retirement. If you prefer to receive passive income quarterly but still want to leave a little something behind for your loved ones, you can choose the 4.5% p.a. payout option. Finally, for those who believe in seizing the day and living in the now, go for the 8% p.a. payout option.

3. Low fund-level fees 

There is no lock-in period for payouts, no sales charge and no hidden trailer commissions. In addition, WiseIncome has one of the lowest fund-level fees for a multi-asset fund. So every dollar you save on fees is a dollar more for you!

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