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

Last updated on January 17th, 2019 at 06:56 am

If you are considering 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, retirement plans can help any individual who does not want to take on too much investment risk towards retirement. It is a conservative investment approach to building for 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 allows retail investors, like you and me, to leverage on professional investment management while having a reduced fluctuation in our returns.

A lot is said about the low running cost of an ETF but a PAR fund is also very efficient in that aspect.

 

How efficient is a PAR plan’s investment expense ratio?

0.171%p.a

Below is a snapshot of the NTUC’s PAR fund. It also achieved 4.49% in 2016.

I’m not saying that NTUC’s PAR fund is the best but this is very decent for a conservative investment approach.

 

Personally, I have investments that are directly into shares listed on the exchange.

However, I own a small allocation of my total investments to the insurer’s PAR funds with the whole life plan that I own.

Perhaps when I grow older, I may allocate more into such principle-protected solutions because there just isn’t much reason to take on risk and grow wealth.

 

4 popular retirement plans (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.

 

As of Nov 2018, new plan is Manulife RetireReady Plus: Click link for 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.

As of Nov 2018, new plan is AXA Retire Happy Plus. Click link for brochure.

(Look for 2018 updated retirement comparison post below)

 

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 if you want the payout to coincide with SRS withdrawal age and withdrawal duration.

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

Want a private discussion? Click to WhatsApp Josh Tan @ 90060446

How some of my private clients have used the TM Retirement @63

The unique part about TM Retirement @63 is you can do a recurring single premium for SRS investing.

That means this year’s SRS and subsequent year’s SRS can be in one plan. No need for a new plan for every year’s contribution.

The recurring single premium is optional and you can stop at any year. Very flexible.

 

Check this post below for an updated comparison and how what promotions are available now!

Want a private discussion? Click to WhatsApp Josh Tan @ 90060446

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

We are all expected to live longer. This kind of retirement plans allow you to control your cash-flows for retirement.

CPF has an Enhanced retirement scheme ERS for CPF LIFE but it has a cap and you need to plan for yourself.

The views and opinions expressed in this article are those of the author and do not represent the views of any other organisation.

Image credits: Respective brochures from AXA, NTUC, TM Life, Manulife (hyperlink above)

 

PS: This quick video below is on SRS and when you should choose a retirement plan with it.

 

 

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://www.josh-tan/wall-of-reviews. COMPANY: Promiseland Independent Pte Ltd. EXPERIENCE: 11years.

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