Why Manulife RetireReady and TM Retirement(SP) are Winners For Retirement Plans NOW!

There is a wide range of retirement plans in the market. This post is to compare between 4 of the popular plans in the market namely:

  1. Manulife RetireReady
  2. TM Retirement (SP)
  3. NTUC SAIL
  4. AXA Retire Happy

Before you read further, these plans are targeted at individuals who do not like to take on too much investment risk towards retirement i.e. you are conservative in your investment approach when approaching your golden years.

Retirement plans strength lies in protecting your initial investment and any non-guaranteed returns should be viewed as an upside.

Before you conclude that retirement plans are only for the faint-hearted folks, read further…

Retirement plans are for everyone! Do you know why?

A retirement plan, in essence, is an endowment that uses a participating, aka PAR, fund of the insurer. It is similar to a whole life plan. It allows retail investors, like you and me, to leverage on professional investment expertise while having a reduced fluctuation in our returns. It is a cheap and easily accessible option for us.

I personally invest directly in the financial markets through shares listed on the exchange, making me an active investor. However, I still allocate a small portion of my total investments to insurer’s PAR funds with the whole life plan that I own. Moving forward, my strategy is to allocate more into such principle-protected solutions as I grow older.

Having said that, the 4 popular plans which I have done up are as follows (Click to have a blow-up picture of it):

Comparison of Retirement Plans Funded by SRS or Cash
The table compares for someone aged35 and investing $15,000 lump sum. Plans can be funded by SRS or Cash.

Brief description for Manulife RetireReady: Click link for Manulife RetireReady brochure

Brief description for NTUC SAIL: Click link for NTUC SAIL brochure

Brief description for TM Retirement(SP): Click link for TM Retirement @70 brochure.

Brief description for AXA Retire Happy: Click link for AXA Retire Happy brochure

 

If you are looking for Highest Guaranteed Return
-> Manulife RetireReady is a winner! (For NOW)

In the above comparison, Manulife RetireReady had the highest guaranteed IRR of 2.25%p.a. This is vastly higher than the rest of the plans analysed. I’ve worked out for other age groups and the conclusions are similar.

In addition, the plan pays out 2 times of the guaranteed monthly income if you experienced a loss of independence (LOI). This is actually a FREE long term care insurance embedded into the plan.

There is also flexibility in deciding the payout strategy upon reaching your payout age!

You can choose to accumulate your payout with Manulife, compounding at prevailing interest rate or choose to receive the monthly cash benefit. The downside is that the minimum qualifying amount for the plan may be higher than the rest of the plans.

 

If you are looking for Highest Projected Return
-> TM Retirement (SP) is a winner!

TM Retirement (SP) plan has the highest projected rate of return! Just in case you do not know, Tokio Marine has a reputation of maintaining bonuses in their PAR funds till date.

For example, a $15,000 single premium investment will yield an annual cash payout of $4,820 for  10 years, from age71 to age 80 (Total of $48,200).

There are 3 payout age for TM Retirement(SP) i.e. @63, @65 and @70.TM Retirement @63 is a great solution for investments using SRS funds. This is because payout coincides with SRS withdrawal age and withdrawal duration.

TM Retirement @63 is a great product for investments using SRS funds. This is because payout coincides with current SRS statutory withdrawal age at Age 64 and allowable withdrawal duration of 10 years.

Note: Tokio Marine uses age next birthday. SRS will terminate 10 years after first withdrawal.

 

Last words

You can invest in any of the 4 retirement plans analysed with SRS or Cash.

In my opinion, adequate cash flows in retirement planning should be the focus during a later stage in your life, such as from age65 or 70 onwards. It is because we are all expected to live longer. These retirement plans allow you to control your cash-flows for retirement and complement your CPF Life payouts.

Josh Tan

I graduated with an Accountancy degree in from Nanyang Technological University but did not join an audit firm. Being keen on investing and personal finance matters, I started a journey in the financial planning industry and have been blessed to share what I am passionate about for the last 10 years. Currently, I practice in Promiseland Independent Pte Ltd, one of the reputable independent financial advisory firms in Singapore As a dad now, I have a new found perspective on financial matters concerning parents. I share many of the concerns that you have and as I search for answers myself, I'll share them through my articles.

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