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Retirement Plan To Complement Your CPF Payouts| Vivowealth Solitaire

How does Vivowealth Solitaire work?

NTUC Income's Vivowealth Solitaire is a single premium wholelife plan that pays you passive income from start of 6th policy year till age100. These are some highlights

1) Lifetime monthly cash payouts starting from the 6th policy year till age 100

You’ll receive monthly cash payouts. Over a year, these cash payouts can add up to 4.2% of your net single premium (1.56% is guaranteed and 2.64% is non- guaranteed).


2) Special cash benefits at the start of the 21st and 31st policy year

On top of the monthly cash payouts, a guaranteed special cash benefit2 equivalent to 1.56% of your net single premium will be paid out at the start of the 21st and 31st policy year.


3) Spend or accumulate back with NTUC Income for interest

Choose to receive your cash payout and spend it however you’d like or accumulate with us to receive interest at a rate of up to 3.25% p.a.


4) Centennial maturity benefit at age 100

Receive a centennial maturity benefit of 105% of the net single premium and a non-guaranteed terminal bonus, at the point of policy maturity when the insured reaches 100 years old.

From brochure, a $2m investment at age40 will have a centennial maturity benefit of $4.218m!


5) Exclusive treats for Income’s Solitaire policyholders

Gain access to Income’s Solitaire Club – an exclusive rewards programme. Privileges include discounts to will and trusts. Find out more.

Where does Vivowealth Solitaire fit in your retirement portfolio?

Vivowealth Solitaire (although classified as a wholelife plan) is mainly a retirement income solution.

Hence, I would classify it under the "retirement plan" category.

This means it gives you consistent income and does not require you to actively manage.

LayerRetirement assetsConsistent incomeNeeds managementRisk of mistakesLiquidity
FifthProperty (investment)NoSomeYesNo
FourthSharesNoSomeYesYes
ThirdInvestment portfolioSomeNoSomeYes
SecondRetirement planYesNoNoSome
FirstCPF LifeYesNoNoNo

It can be your second layer of retirement income. More details in next section.

Vivowealth Solitaire to complement your CPF Life payouts

Do you know that there is a maximum you can put to CPF Life?

There is a cap you can put into CPF LIFE which is the Enhanced Retirement Sum (ERS) level. 

The ERS for year2020 is $271,500 which will pay you (from age65) about $2,100/m in guaranteed income depending on which plan type you choose.

From it, you can further choose the Basic Plan, Standard Plan (default choice) and Escalating Plan so to learn more, click on the video.

But CPF Life is designed to support a basic level of retirement expenses and a hedge against longevity risk.

Even the Enhanced Retirement Sum (ERS) which is 50% higher than the Full Retirement Sum (FRS) is not sufficient for a luxurious retirement.


That is where Vivowealth Solitaire comes in to let you build additional cashflows in retirement.

Each $0.5M investment will bring you $1,750/month in cashflows($650 monthly guaranteed cash benefit and $1,100 monthly non-guaranteed cash bonus).

Two more reasons to build income in Vivowealth Solitaire

1) Full Control Over When To Get Payouts

CPF life currently pays out at age65 but rules can change.

If you are some years away from age65, the payout age when you are older could be very different.

To solve that, have some invested in a "retirement plan" like Vivowealth Solitaire whereby your payouts are guaranteed to begin from start of 6th year.

If you do not need the cashflow, you can re-credit back with NTUC Income at 3.25% as explained at the start of the post.


2) Gives you some liquidity

You may surrender at any point in time (though not preferable before the breakeven years). Disclaimer that "You may not get back the full premium if your surrender the policy early. Please refer to policy wording."

You may also use policy loans to draw out cash if you need.

Vivowealth Solitaire as a legacy tool for you

The plan pays out a death benefit that increases. The illustration below is for a plan size of $0.5M (entry age50) and if you withdraw out the cash benefit from the plan.

This complements CPF Life whereby the bequest amount (death benefit) declines over time.

In the Standard plan (default by CPF), bequest amount (death benefit) becomes $0 at around age85 in most instances. Hence, having a "retirement plan" like Vivowealth Solitaire in your portfolio serves as a legacy planning tool for you.

With the plan in place, you can consume the cashflows and know that there is something still left behind for your family.

Vivowealth Solitaire VS other alternative "retirement plans"?

These are 4 other alternatives that some of my private clients have used for planning retirement income.

The list is not exhaustive of all the possible plans but it is sufficient to meet planning requirements.

Conclusion

For Vivowealth Solitaire, plan matures at age100.

A possible strategy is to use the Escalating CPF Life plan with it. The escalating plan has a low starting amount cashflow but escalates as you age.

By age100, it would have escalated to a sizeable amount which comes in handy as cashflows from Vivowealth Solitaire stops then.

If you would like to read further, click this link for the plan brochure and the policy conditions here.

Last updated on November 5th, 2019 at 02:30 pm

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://www.josh-tan/wall-of-reviews. Practising financial planner with Promiseland Independent Pte Ltd. EXPERIENCE: More than 12years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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