Expect the National/State pension system to support me
Expect my employers pension system to support me
Invested in Personal Retirement funding.
Expect my children to look after me.
Nothing, what is retirement ?
0voters
All of us at some point in the future are likely to have to stop working. At that point our ability to live in the way we want to live will depend on what planning we have done during our working lives.
What if anything have people done to ensure that they will be able to continue living in the style and manner that they have come accustomed to.
More and more National/State pension systems are becoming over burdened as the original model that they were setup on is no longer valid. People are living longer, and a number of western countries are seeing a demographic shift upwards in the average age of their populations.
Investing monthly and saving; education IRA for the boy. I don’t plan on depending on anyone or any government institution to save and/or provide for me, that way, if they do, cool.
The Hen and I put about a quarter of our income into different index funds; we’re not good stock pickers and can’t really be bothered with following individual stocks. We keep the money spread around in index funds covering different markets, mostly in N America and Asia. We should be braver about picking some individual stocks and maybe some industry specific funds.
We also get tapped for 10% of our monthly pre-tax income by a Mandatory Provident Fund here in Hong Kong. That really pisses me off since a.) the investment options are way too limited; and b.) the stupid HK government allows the fund managers to take a 2% annual management fee for doing no managing whatsoever. I don’t expect to get anything more than the original capital out of that at retirement. I don’t expect to get anything from Social Security in the US if I happen to retire there. We are basically saving so that we can be semi-retired by the age of 55. A house in the US and one in HK would be nice, too. After reading MT’s advice about tax-free education saving funds, we’ll probably start putting money into that as soon as the next turkey joins the flock in August.
If you are in HK then I would reccomend you take a look at Pru Wealth sold through Prudential via Standard Chartered’s Branches. Because it is an insurance product it is tax free and typically returns above 5% from memory…which is pretty good tax free.
FYI I work for Pru (currently in Taiwan) so may be considered to have a vested interest but HK business is none of my business I just believe it is a good product.
Sounds like you are mostly doing the right things. Try getting on some of those HK IPOs while you are there though, always good for 10-15% return.
One word: annuities.
You put your money in over a 20-year period and start collecting when you turn 60 on an annual basis, all the way until you check out. So the longer you live, the better the deal. And no fluctuating performance to worry about.
[quote=“Incubus”]One word: annuities.
You put your money in over a 20-year period and start collecting when you turn 60 on an annual basis, all the way until you check out. So the longer you live, the better the deal. And no fluctuating performance to worry about. [/quote]
Why only over a 20 year period, i started paying towards my retirement when i first started working.
If you start early, the cost is not expensive, but the additional advantages are not to be considered lightly.
Most youngsters when first starting work, do not even think about 5 years down the road, never mind the 40 - 45 when they retire, perhaps more should be done in school to educate them.
If you are in HK then I would reccomend you take a look at Pru Wealth sold through Prudential via Standard Chartered’s Branches. Because it is an insurance product it is tax free and typically returns above 5% from memory…which is pretty good tax free.[/quote]
That’s not especially good for HK since there is no capital gains tax here and the income tax is so low. Having said that, though, I need to do more investing in HK stuff to avoid paying US capital gains taxes on it. That’s the main problem I have in my current pile of stuff.
The problem with the MPF in HK is that we have no choice for who manages our contributions; that is decided by your employer. They basically go with whoever gives them a bundled deal on other banking/financial services. Since institutions don’t have to compete to manage our retirement funds, they predictably do a shitty job and then charge that outrageous 2% annual management fee. Even Stalinist Singapore has a freer mandatory retirement fund scheme than the one we have here. :fume:
Personally I spend a considerable amount of time learning as much as I can about the (i was going to say art) science of investing. The reason for this is that after about 10 years of significant investment, I can look forward to earning more from my investments than from my regular income. Yep… done right I could retire in 10 years. This is because the more capital you have, your investment decisions have a much larger impact. This whole topic probably belongs in the business section anyway…
Aaaaaah someone said the word annuities. Come on, the Insurance companies (and remember I work for one) make a fortune on this. It is basically a bet on how long you will live, if you beat the average then you win, and if you die young the insurer wins…except of course the product is priced so that they win anyway.
Better system is to put your money into income generating assets, stocks with high dividend policies, property that you can rent etc. This means that you get your income as long as you need it and still leave assets behind for your chosen few …whether that be kids, cats, or a big party.
DRIPs are popular in the US because the government taxes Dividends. Which is dumb, because effectively the government is taxing the company twice. In Australia dividends are taxed according to your income tax level. In some cases the government is even required to give you money back because you are required to pay less tax than the company has already paid. So not only is the individual entitled to a dividend yield that could be 8%, you could even get tax credit back from the tax department.
I own a number of different companies that are paying 6-10% of the principle back to me every year (This kind of yield also protects the stock from going down to low)… thats much better than DRIPs
