Jun 16, 2019

Cory Diary : Asset allocation 2019 Jun

In my plan for retirement, if it happens, there could be draw-down in my net worth. Next question will be how fast. So I decided to do a rough update estimate based on what I have today.

Roughly, I could see return generation of 113 K annually. This could be generous on the property. Never mind. Just ignore me on that one. However, to meet short-medium term needs, FCF is more important. Which left me with 51.5K annually after removing Insurance, Property and Pension. And this is assuming I have surrendered my Insurance policy. I still have loan to pay up, which implied even with my net worth today, I could not afford to retire for the lifestyle I want to maintain after, without draw-down.

First thing to do is to tackle my most unproductive asset which is Saving. With Gov securities that can double up as Emergency and Housing loan support, there is no need to have such a high saving % allocation which has been my constant issue with saving rate from salary and bonus. This needs to cut down by a third of which I would have my SSB max. and then remainder to war chest.   This saving category includes cash management account which is giving reasonable interests. 

Secondly, my backup plan is to sell my property after 7 years and would switch to further OCR region to increase the psf when I retired for at least same amount. This is not impractical from current caveats logged. However, my wish is to have another property instead and this will required environment to be conducive enough such as removal of ABSD, and my saving rate and investment are reasonable to generate growing dividends.

In a not so good scenario, where I decided to retire immediate,  and my investment returns turn sour. I would estimate 5% draw down after paying up all my loans from the start, will last me for at least 17 years. After which, I am left with Pension and Property. Then the option is to down-grade .... to finance more reasonable lifestyle and my daughter education. At 67 then, maybe is still ok. Still cannot tahan, then I will ask my wife to chip in (my last buffer of buffer which is to clean tables lol ... ) . ha.

Someone said : What about legacy ?

Uncle Cory : Simi lah. Down grade liao still want legacy. You only have one life to live.
...  Legacy is for the rich. Don't act rich if you are not.



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