A Moderated Risk Approach
Client: Chin Kin Yong
Goal: Retirement planning
“Kok Chin provided excellent guidance for my wife and I to retire with confidence by ensuring well-structured passive income through our active and passive retirement periods.”
Chin Kin Yong was in his 50s and a lecturer in the School of Business at Singapore Polytechnic when he first met Soul Wealthy. He is married with two sons and a grandfather to two young grandchildren. Given his prudent nature, Mr Chin has been saving and investing whenever he can for years but he has never considered getting proper retirement planning.
As both he and his wife are conservative investors, they generally preferred capital-guaranteed products. Fixed deposits were one of their favourite wealth accumulation options because they did not have a proper retirement plan and they wanted to have the liquidity of their funds.
“My short-term goal was to maximise cash holdings with highest interest rates available whether through fixed deposits or endowment term policies. In the long term, I wanted to preserve my monetary assets with a view of offsetting inflation.” – Chin Kin Yong
When Mr Chin engaged Kok Chin for a full financial review and to conduct retirement planning for him and his wife, they were looking for the assurance of having a source of retirement income during their golden years.
After an initial review, Kok Chin was honest with them: fixed deposits were not generating the returns that they needed and their asset liquidity meant that idle savings were not working for them.
“As their independent financial advisor representative, my objective was to help Mr and Mrs Chin understand the problem with being overly conservative and keeping their savings only in fixed deposits. They had too much cash allocated to a fixed deposit and did not realise that they had endowment plans maturing in the coming years, which would result in further excess liquidity. After moderating his portfolio, we managed to increase his annual returns from about 0.8% p.a. to approximately 4% p.a.” – Ang Kok Chin, Financial Advisory Director
This is how he did it:
- Identify current sources of income which included his salary, passive income from rental, stock dividends, endowment plans, annuity plans, and idle assets such as cash in bank accounts and low-interest investments.
- Assess annual excess cash flow by offsetting his total expense from his income. The excess cash can be used for investments.
- Understand expectations for an ideal retirement to be able to start budgeting for retirement expenses. Typically, the client will need to weigh between spending more and work longer or spending less and retire earlier.
- Secure retirement by first ensuring adequate insurance to hedge against any expensive medical treatments that may be needed. By factoring in the cost of long-term care, medical and hospitalisation insurance, it’s possible to crisis-proof a retirement plan.
- Introduce Soul Wealthy’s 4 Taps Strategy after taking into account investment preferences and risk appetite.
- After putting retirement plans in place, move forward with estate and legacy planning with the grandchildren in mind.
While Mr Chin was always apprehensive about paying for advice, he found that he did benefit from Soul Wealthy’s comprehensive financial and retirement planning process. He gradually understood that there are other investment options that yield higher returns which do not necessarily include taking excessive risk. Mr Chin also came to better understand the value of time and became more open to invest idle savings for a longer-term period to earn higher returns.
“While I consider myself to have an above-average level of financial literacy, I recognised that my own research into financial products would be limited. Kok Chin was very diligent about sourcing investment products from various insurance providers. Compared to other independent financial advisor representatives that I’ve met, Kok Chin’s research and knowledge of the investment landscape gave me the confidence that I was presented with the best choices based on my needs.” – Chin Kok Yong
Today, Kok Chin has become a family friend to Mr and Mrs Chin. With Mr Chin’s retirement, Kok Chin introduced golf to him and they now bond over an occasional round of golf.
If you would like Kok Chin to assist you with your retirement planning needs, contact us now.