How to invest wisely if you have S$100 thousand to see you thru if you are already 60yrs old.?

Question

For experienced and professionals to answer only. Thank you. Asker seriously may use as guideline.

Answer 1

Invest the $100,000 in a diversified dividend stock and bond fund. With $100,000, some stocks pay a high enough dividend to live comfortably in retirement, but you'll probably not want to put the entire principal in one stock, so go with a fund with a basket of stocks that pay dividends and also allocates at least 40% to bonds. Dividend paying stocks tend to be more stable and thus are a bit safer.

Answer 2

The question really should be, how much will I need to see me thru if I'm already 60?

Once in retirement, if you invest in a diversified portfolio you can reasonably expect to take only 4% per year of the year end value out without ever having to worry about depleteing the funds and still leave a little excess to combat inflation.

So, if you invested your $100,000.00 on January 1, in a diversified stock & bond portfolio (funds most likely as the $ amount is relatively small and you'll be drawing on it). You could draw down about $4,000.00. Now, this is a rule of thumb, but I've done a lot of hypotheticals at work and it seems to hold true. The portfolio might decline in the first years and you might actually be forced to draw down less. But over time the 4% rule seems to hold true for a diversified portfolio.

As for what to invest in, or the actual allocations between classes I can't tell you. I, or any other professional, don't know you, your goals, your situation or risk tolerence. You should see a CFP, Certified Financial Planner in your area to assist you in getting you set up for your retirement years.