FINANCIALPLANNING

FOR THE

Author MoneyOwl Solutions Team

MERDEKA GENERATION

CONTENTSSYNOPSIS

CHAPTER 1 YOUR HOME

CHAPTER 2SHOULD YOU RETIRE NOW?

CHAPTER 3CPF PAYOUTS- YOUR SAFE RETIREMENT INCOME FLOOR

CHAPTER 4ADDITIONAL INCOME IN RETIREMENT

CHAPTER 5A MEDICAL SAFETY NET

CHAPTER 6ESTATE DISTRIBUTION

3

4

8

11

15

20

28

SYNOPSISWe all know someone from the Merdeka Generation perhaps a parent, neighbour, colleague or even yourself. Born in the 1950s, each has a story to tell - stories of how one lived through the independence struggle of the nation, joined the workforce early and experienced serving National Service as one of the earliest batches. These are men and women who contributed to the early nation building of Singapore.

As a tribute to our nation builders, MoneyOwl has put together this e-book to help you better prepare for retirement. A common worry you may have is retirement adequacy, i.e. whether there is enough money for living expenses and medical needs in your golden years. The question of “enough” is a subjective one and is dependent on your financial situation and expectation. However, regardless of your expectation, a good retirement plan should provide you with these 3 Must-Haves:

A home to stay in Medical safety netMonthly retirement income for life

In this e-book, we will explore each of these Must-Haves, as well as highlight the planning considerations you may face. In line with MoneyOwl social mission to help the man on the street achieve greater financial security to live fulfilling lives, we consciously integrate national schemes into our planning approach. Hence we will also discuss national schemes like CPF LIFE, MediShield Life, ElderShield/CareShield Life, Lease Buyback Scheme and how they can support your retirement needs. We wrap up with how you can distribute your estate to your loved ones according to your wishes upon demise. This is an important step as it will end your financial journey on a good note.

$$

CHAPTER 1 | YOUR HOME 5

1.1 A FULLY PAID HOME

We all need a place to stay, a place we call home, where lives and memories are built. All thanks to our housing policy, most households here (more than 90%) owns a property. A 3-room flat in Toa Payoh in the 1970's was only around $8,000. Even with one's meagre salary, he/she will be able to fully repay the home loan quite easily. Some, however, continue to upgrade their houses and added more to their loans in the process. The guess is most of the Merdeka Generation would have repaid their mortgages by now, but if for some reasons one has not, the immediate goal is to review the finances and try to pay it off as soon as possible in preparation for retirement. There is psychological bliss, a peace of mind, from being debt-free.

What if there are difficulties in clearing the loan? Or if one is caught in an asset-rich, cash-poor dilemma? What should you do?

There are no easy answers but suffice to say that you need to review your assets, optimise your savings, CPF and estimate how much is needed for your retirement. We will cover more of that in the next chapter.

1YOUR HOME

One option is to monetise your property, i.e. unlocking it to supplement your retirement needs. There are a few ways to go about it and the ultimate decision boils down to personal preference.

1.2 MONETISE BY RENTING OUT SPARE ROOM OR WHOLE FLAT

Do you have a spare bedroom or have alternative accommodation arrangement such as staying with your children? If so, renting out the excess space for income is not a bad idea. Renting out excess space rewards them with the extra money to enjoy their retirement. A spare room can typically fetch about $600 to $1,200 in rental income depending on location and condition.

The benefits of this option include keeping your property (and your neighbours), receiving rental income and continuing to participate in the appreciation of your property value.

CHAPTER 1 | YOUR HOME 6

1. Source: HDB data dated 24 Apr 2018, https://www.hdb.gov.sg/cs/infoweb/various-options-for-seniors-to-monetise-hdb-flats2. Source: http://www.hdb.gov.sg/cs/infoweb/img/top-up-worked-example.jpg

How can Mr & Mrs Lim unlock the value of their flat with the Lease Buyback Scheme?

Couple profileMr & Mrs Lim both 65 years oldJoint owners of fully paid 5-room flat

Mr Lim $20,000Mrs Lim $5,000

1.3 MONETISE BY DOWN-SIZING

But what if you do not wish to share your property with others? Or find that the current house is now too big to upkeep as your children or family members have moved out. In such cases, perhaps down-sizing or right-sizing is a consideration. This option allows you own the entire unit, albeit a smaller one, but with extra money from the exercise.

One affordable option of a smaller flat is the 2-room flexi unit from HDB. You can select how long a lease you need. The shorter the lease, the smaller the property price.

Seniors who are aged 55 and above can take up a lease of between 15 and 45 years as long as it must cover the age of the applicants up to 95 or more.

Such a flat is quite attractively priced. According to HDB as of April 2018, such a flat is priced around $150,000 in the matured estate and $90,000 in the non-matured estate for a 40-year lease1. These flats are getting quite popular in recent years and HDB has been ramping up supply of such units to meet demand.

Besides receiving extra money from down-sizing, you could also save on running cost from lower conservancy charges, property tax and lower upkeep of a smaller unit.

1.4 MONETISE BY LEASE BUYBACK SCHEME (LBS)

Finally, what if you prefer to age in place, because you love the neighbourhood or you just cannot accept the idea of renting out your rooms? In that case, there is the Lease Buyback Scheme (LBS).

In LBS, you are essentially selling the tail-end lease of your flat back to the HDB for money. In this way, the lease of your flat is now shortened. There are conditions on the sales proceeds, which requires one use the money to first do a top up into your CPF Retirement Account (RA); any remaining balance would then be available for cash spending. The whole idea of the top-up is for you to join CPF LIFE which will then provide a stream of income for your retirement for life.

Perhaps the following example from HDB website2 can help us understand how the LBS works.

Flat value: $520,000Lease left: 65 years

CPF RA

CHAPTER 1 | YOUR HOME 7

In this example, Mr & Mrs Lim, both age 65, own a fully paid 5-room flat, valued at $520,000 with a remaining lease of 65 years. Their CPF-RA savings stand at $20,000 and $5,000 respectively. With such low CPF savings, their combined CPF LIFE payout (assuming Standard plan) is about $1603 monthly. This is obviously insufficient for their retirement needs if that is all they have.

Suppose they decide to participate in LBS, this is how it works:• Sell off 35 years of their flat’s lease to HDB for $219,300• Sales proceeds to top-up their respective CPF-RA up to the

Basic Retirement Sum of $88,000• $151,000 is required to do the top up; ($88,000 – $20,000 + $88,000 – $5,000)• Net proceeds left after CPF top-up is $68,300 ($219,300 – $151,000)• Receive a $5,000 LBS Cash Bonus, since the CPF top up is more than $60,000

Benefits of LBSThe couple could now receive a lump sum cash payout of $73,300(LBS cash proceeds $68,300 + LBS cash bonus $5,000) and a monthly income stream from CPF LIFE of $1,000. Not bad considering that before this, the couple could only enjoy about $160 monthly from their CPF LIFE.

The key drawback of LBS is the once in the scheme, you are not allowed to sell the flat in the open market or rent out the whole flat. In other words, you are not able to participate in the potential appreciation of the property value.

What if you outlived the lease period, e.g., beyond age 95? HDB assures you that in such a situation, you will not be left without a home. HDB will review your circumstances on a case-by-case basis taking in factors such as family support, health conditions and financial status and work out an appropriate housing arrangement with you.

For more info on LBS, please check out https://www.hdb.gov.sg/cs/infoweb/residential/living-in-an-hdb-flat/for-our-seniors/lease-buyback-scheme

Source: This amount is estimated from the CPF LIFE Estimator. Mr Lim is estimated to receive $$126 to $133 monthly and $29 to $31 monthly for Mrs Lim.

Total value unlocked by Mr & Mrs Lim

LBS Cash Proceeds

$68,300

LBS Cash Bonus

$5,000

CPF LIFE Payout (per month, for life)

$1,000Based on $151,000 top-up to the couple's CPF RA account

Mr & Mrs Lim both 65 years old, retains their flat with 30 years of lease remaining.

2SHOULD YOU RETIRE NOW

CHAPTER 2 | SHOULD YOU RETIRE NOW 9

It is no coincidence that those belonging to the Merdeka Generation are at one of the important milestones of their retirement planning – crossing the statutory retirement age of 62, CPF payout eligibility age of between 63-65 and re-employment age of 67.

But before we talk about retirement income, let us talk about whether one should seek to retire in his or her 60s.

You’ve worked and saved hard for most part of your life and finally, retirement is in view. But retirement is not a destination but rather another phase of your life. Retirement can stretch for as long as 15-20 years in view of today’s average life

3. Based on MOM’s Labour Force Survey, 2018 (Table 4)

2SHOULD YOU RETIRE NOW?The second Must-Have in retirement is a monthly retirement income for life to cover our expenses.

IMAGINATION

6 to 15 years prior to Retirement Day

HESITATION

3 to 5 years prior

ANTICIPATION

2 years prior

REORIENTATION

2 to 15 years after

RECONCILIATION

16 years or more after

REALISATION

Retirement day and the year following

expectancy of 84 years – that is as long as half our economically productive years!

In 2018, more than 53% of those aged 60 to 69 are employed.4 Some may continue working due to lack of choice, but perhaps many do so to remain physically, mentally and socially active. If you have ever taken a gap year in your work, you would realise how quickly one runs out of things to do after a few months and the emotional and psychological complexities of that.

Indeed, what is often underestimated is the emotional journey of a retiree. According to the New Retirement Mindscape II study (Ameriprise Financial Inc), there are six stages in this journey:

CHAPTER 2 | SHOULD YOU RETIRE NOW 10

Example of sources of income

CPF

Savings/Investment

Work

Age

Payo

ut

4. Manulife 3-Gen Survey, Nov 2018

As a member of the Merdeka Generation, you may be either in the Imagination stage, where you might feel unprepared for retirement or the Hesitation stage, when you are actively seeking advice and the ability to cover your healthcare costs becomes a particularly important concern for you. This is also why the Merdeka General Package focuses on help for medical expenses, the coverage of which is our third Must-Have, of which we will write more in a future part of this series. Or, you might be in Anticipation, which is the happiest stage of the six stages. A few might have just retired and the Realisation or feeling of being a little let down can be hard, the most difficult being the loss of income, and this emotional stage improves only upon some Reorientation.

Retirement is thus not all sun, sand and laughter, emotionally or otherwise. Retirement can only be truly fulfilling if you are active and doing something that is of meaning to you. Financially also, you need to consider if you would benefit from delaying retirement. As you are your Most Important Financial Asset , don’t discount how you can still contribute to your own well-being monetarily or otherwise. With the $100 top up to your PAssion Silver Card from the Merdeka Generation Package, don’t miss out on the various courses and activities that you can sign up for at your local community centre.

The Government has been improving the infrastructure to help those who are able and willing, to work longer. The statutory retirement age in Singapore is 62 years old.

What this means is that your employer can choose to terminate your employment without compensation when you turn 62 years old. But in view of our tight labour market, decreasing fertility rate and increasing life expectancy (60 is the new 50), the Re-employment Act was passed in 2012. With this in place, your employer will need to offer you (subject to eligibility criteria) re-employment beyond 62 years old, on an annual basis, up to age 67. There are also recent policy changes to increase CPF contribution rates and an additional 1% interest rate is now paid on CPF savings for workers aged 55 and above.

In addition, the government also announced that the Tripartite Workgroup on Older Workers will be looking into further changes to the CPF contribution rates. As announced in Budget 2019, the Workfare Income Supplement Scheme will also be enhanced from 2020. The qualifying income cap will be raised to $2,300 and the maximum annual payouts will be increased by $400. So, if you continue to work, you can potentially get up to $4,000 per year in income supplements.

Nonetheless, whether you choose to continue working, knowing that you have a retirement plan in place will provide you with a peace of mind. Based on a recent survey of baby boomers, the top three sources of retirement income are CPF (78%), savings/investments (55%) and work (37%)5. We will explore these sources of retirement income in our next few chapters.

3CPF PAYOUTS: YOUR SAFE

RETIREMENT INCOME FLOOR

CHAPTER 3 | CPF PAYOUTS: YOUR SAFE RETIREMENT INCOME FLOOR 12

Arriving at the Payout Eligibility Age comes with a list of decisions. These are:• Should I join CPF LIFE if I am on the Retirement Sum Scheme?• Should I start my CPF LIFE payouts now?• Should I make a lump sum withdrawal from my Retirement Account (RA)?• Which CPF LIFE plan should I choose?

To answer these questions, it would be useful to have a gauge of what percentage of your retirement needs would be funded by your CPF savings and consequently, how much you may need to supplement with other income sources.

At MoneyOwl, we advocate that all retirement plans comprise an annuity as a base. An annuity is a stream of income that pays for life and hedges against longevity risk, i.e., the risk of outliving one’s assets. CPF LIFE is the best annuity in the Singapore market, all else being equal, in terms of payout versus capital, return and risk. It is thus well placed to form the Safe Retirement Income Floor for all Singaporeans. This Safe Retirement Income Floor is a “die die must have” level of income to fund a basic level of retirement lifestyle.

The age at which you can start your CPF monthly payout is based on your year of birth.

3CPF PAYOUTS: YOUR SAFE RETIREMENT INCOME FLOOR In this third chapter, we explore how CPF, specifically, CPF LIFE forms the foundation of your retirement plan by providing you with a stream of income for life. A retirement income that covers daily expenses is the second Must-Have in retirement, alongside a home to stay in and a medical safety net.

Year born 1950 - 51 1952 - 53 1954 and after

Payout eligibility age 63 64 65

CHAPTER 3 | CPF PAYOUTS: YOUR SAFE RETIREMENT INCOME FLOOR 13

Based on the Household Expenditure Survey 2012/13, we know that a retiree household in the second quintile of expenditure spends on average $518 per month in 2013 on food, transport and other goods and services excluding accommodation. This is enough to support a basic standard of living (excluding rental of a place to stay) and is the basis on which the Basic Retirement Sum (BRS) under CPF LIFE is set – the BRS provides for a payout under CPF LIFE that is close to $518 in 2013 dollars, adjusted for inflation. This is also the reason why you can choose to set aside the BRS only if you own a property as the payout corresponding to BRS assumes you do not need to rent a place to stay.

*Payout figures are estimates, based on the CPF LIFE Standard Plan and computed as of 2019. If you choose to top up to your RA, the top up limit is the current Enhanced Retirement Sum less your RA savings excluding interest earned and government grants.

You can use the CPF LIFE Payout Estimator on the CPF website for your own projection based on your current RA balances.

Now that you have a sense of how much your CPF savings will contribute to your retirement income, we can start to address these questions.

3.1 SHOULD I JOIN CPF LIFE IF I AM ON THE RETIREMENT SUM SCHEME?

Before CPF LIFE, CPF members receive their monthly payouts from the savings in their Retirement Account until it is depleted under the Retirement Sum Scheme (RSS). With Singaporeans living longer, the risk of retirees outliving their savings is becoming very real. Hence, CPF LIFE, our national annuity plan, was introduced in 2009 and made mandatory in 2013 to protect against this longevity risk. If you are born 1958 or later and have at least $60,000 in your RA when you turn 65 years old, you will be placed on CPF LIFE instead of the RSS.

If you are on the RSS, you can also choose to join CPF LIFE before your 80th birthday. The question is, should you? Ideally, you should have a retirement plan that pays you for life because the last thing you want is to go back to work when you are in your 80s or hope that your children can support you when they are already in their 60s. It would be better to age with dignity with assurance of a lifelong income. Nonetheless, there are scenarios that CPF LIFE is not suitable, i.e., very old members or those with very low RA balances, as you may end up with a very small monthly payout that is not meaningful. In comparison, the RSS gives a minimum payout of $250 per month.

Monthly lifetime payout from 65 years old $600 $1,100 $1,600

RA balance required at 65 years old

$100,000 - $110,000

$200,000 - $210,000

$300,000 - $310,000

For Merdeka Generation members who turn 65 this year and start their payouts, the amount you need to have in your RA to generate a corresponding monthly income today is shown in the table below:

If you do not own a property, you should have the Full Retirement Sum (FRS) that is double of BRS, because the need to rent a room on top of paying for basic necessities can cause monthly expenses in retirement to double. For those whose Safe Retirement Income Floor is even higher, there is the option of topping up your RA to the Enhanced Retirement Sum (ERS) which provides an even higher level of payout.

For CPF members who turn 55 in year 2019 (who are not Merdeka generation), the current BRS, FRS and ERS are $88,000, $176,000 and $264,000 respectively. In 10 years’ time, these would provide payouts that are, in today’s dollars, roughly $600+, $1,100+ and $1,600+.

CHAPTER 3 | CPF PAYOUTS: YOUR SAFE RETIREMENT INCOME FLOOR 14

3.2 SHOULD I START MY CPF LIFE PAYOUTS NOW?

Since 2016, you can choose to defer your payout start age up to 70 years old. For every year you defer, your monthly payout will increase by 6 – 7% more. For example, if your payout is $600 per month if you start at 65 years old, delaying the payout till 70 years old will increase it to about $800 per month for life. If you are still working or have other sources of income, this is one way for you to increase your payouts without having to put more money in your CPF.

3.3 SHOULD I MAKE A LUMP SUM WITHDRAWAL AT PAYOUT ELIGIBILITY AGE?

If you were born after 1957, you have the option to make an unconditional withdrawal of up to 20% of your RA balances (excluding top-ups and grants) when you reach your Payout Eligibility Age. While such a withdrawal option provides you with flexibility to fulfil some lifelong wish upon retirement, the effect of this withdrawal reduces your monthly payout.

All CPF LIFE plans comes with a bequest feature, which means the monies used to join CPF LIFE which was not paid out to you in monthly payouts by the time you pass on, will be returned to your loved ones. The payouts, while stable, are not guaranteed as it is subject to changes in CPF interest rates6 and mortality experiences.

Perhaps the easiest way to decide between the three plans is to check if the $100 per month difference in payout between the plans is important to you, as the main objective in any annuity is to provide an income stream. If yes, you may want to consider the Standard plan to maximise your payouts today or the Escalating plan to maximise your payouts in future. If no, the Basic plan could be more suitable as it would leave behind a larger bequest for your beneficiaries.

What if you do not manage to actively take any of the above decisions? Have no fear. If you do nothing, you will by default start your payout when you turn 70 years old on the CPF LIFE Standard plan. This combination will give you the highest payout for life based on your RA balances.

*Payout figures are estimates, based on a male member and computed as of 2019.

5. Interest on your Special, Medisave and Retirement Accounts is either the current floor rate of 4% p.a. or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is higher. The floor rate of 4% is reviewed annually by the government. Current(2019) average yield of the 10YSGS plus 1% is 3.38%.

Standard Basic Escalating

Based on $150,000 in RA at age 65 years old $860 $780

$680 @ 65 $830 @ 75

$1010 @ 85

Based on a current payout of $600 a month, making a 20% withdrawal will reduce your payout to $490 per month on the Standard plan. It is important to decide if the reduction of the monthly payout is worthwhile and would lend to a more meaningful life. In addition, you don’t have to withdraw the 20% in a lump sum, it can be done so in parts and even after your Payout Eligibility Age. So, if you don’t have immediate use for the money, why not treat this as some sort of emergency funds instead?

3.4 WHICH CPF LIFE PLAN SHOULD I CHOOSE?

There are currently 3 CPF LIFE plans you can choose from – the Standard, Basic or Escalating plan, each catering to those with different priorities. For those who want to enjoy the highest payout, Standard plan is for you. For those who are more concerned with leaving behind a legacy, Basic plan could be more suitable. Lastly, if you are concerned about rising cost of living, you can also consider the Escalating plan which starts with a lower payout but increases by 2% per year.

Here is a comparison of the payouts across the three plans.

4ADDITIONAL INCOME IN

RETIREMENT

CHAPTER 4 | ADDITIONAL INCOME IN RETIREMENT 16

THE 5 RISKS FACED BY RETIREESRetirement planning for retirees is more complicated than for accumulators because of the combination of 5 risks that retirees need to deal with:1. Longevity risk – living too long2. Inflation risk – things becoming more expensive3. Investing risk – assets value rise and fall4. Over-spending risk – unsustainable spending5. Healthcare risk – huge medical expenses

4ADDITIONAL INCOME IN RETIREMENTStrategies a Merdeka Generation senior can employ in building a second layer of retirement income.

The combination of these risks poses a conundrum for retirees. While an annuity like CPF LIFE takes care of longevity risk to some extent, rising costs (inflation risk) mean that a much bigger retirement fund is required to maintain your current standard of living. Leaving your money in the bank to earn fixed deposit interest rates is unlikely (going/able) to support your retirement spending and hence there is a need to invest for higher returns on your savings. However, investing carries risk (investing risk) and too much volatility on your investment might become uncomfortable for retirees to accept. At the same time, if left unchecked, excessive spending (over-spending risk) especially in the early years of retirement could deplete their savings faster. Finally, as we age, our medical cost (healthcare risk) increases and this will put further strain on the retirement funds.

A good retirement plan needs to try and reconcile these 5 risks for the retiree. Here are some instruments you can consider using to build an additional layer of retirement income, on top of CPF payouts:

CHAPTER 4 | ADDITIONAL INCOME IN RETIREMENT 17

4.1 INVEST IN SUITABLE LOW-COST, WELL-DIVERSIFIED, MARKET-BASED PORTFOLIOS TO STRETCH YOUR SAVINGS, WHILE SETTING WITHDRAWAL RULES

Contrary to popular intuition, you can still invest in markets during your retirement years. Your investment decision should be a combination of the need to take risk (what return you need), your ability to take risk and your willingness to do so.

The need to take risk includes your need for income and your need to overcome longevity and inflation risks. As for your ability to take risk, consider your financial situation, such as whether you have an emergency fund and the time horizons that are relevant to you. Given that an average retirement can span 15 to 20 years today, you certainly have the time horizon to invest at least a portion of your savings that you do not immediately need. However, you need to be willing to accept some volatility because staying invested is key to capturing market return.

Unless you have a large enough pool of capital to be able to spend only the return, you should also set a retirement withdrawal rule at between 2.5% to 4.0% of initial invested capital, to help mitigate the negative impact of sequence of returns risk in investing. This is the risk of experiencing negative market returns at the beginning of your drawdown, such that you would deplete your capital base quickly if you are drawing down a fixed amount (or an amount that is adjusted for inflation yearly), compared to a situation in which the returns are positive at the start of your drawdown period. Alternatively, you can bucket your investments according to different time horizons and invest later “buckets” into higher risk portfolios earlier “buckets” into low-risk instruments.

Sequence of returns matter in retirement

ACCUMULATOR

No withdrawals / Starting value: $100,000

Age Annual Return

Portfolio A Year-End Value

Annual Return

Portfolio B Year-End Value

41 -12% $87,695 29% $129,49142 -21% $69,426 18% $152,28143 -14% $59,707 25% $189,59044 22% $72,984 -6% $178,40445 10% $80,136 15% $204,27246 4% $83,595 8% $221,18347 11% $92,707 27% $281,12448 3% $95,210 -2% $274,93949 -3% $92,155 15% $315,35550 21% $111,507 19% $375,27251 17% $130,129 33% $498,73752 5% $137,026 11% $554,09753 -10% $123,597 -10% $499,79554 11% $137,316 5% $526,28455 33% $182,493 17% $614,17456 19% $217,167 21% $743,15057 15% $249,091 -3% $719,30558 -2% $243,611 3% $738,72659 27% $309,629 11% $819,24760 8% $335,262 4% $854,60261 15% $383,875 10% $938,35462 -6% $361,226 22% $1,147,02263 25% $449,727 -14% $986,43964 18% $528,878 -21% $780,94165 29% $684,848 -12% $684,848

8% $684,848 8% $684,848

RETIREE5% annual withdrawal of starting value

($684,848) inflation-adjusted

Age Annual Return

Portfolio A Year-End Value

Annual Return

Portfolio B Year-End Value

66 -12% $566,337 29% $852,57167 -21% $413,086 18% $967,35568 -14% $318,927 25% $1,168,02969 22% $352,432 -6% $1,061,69870 10% $348,431 15% $1,177,10571 4% $323,772 8% $1,234,85572 11% $318,176 27% $1,525,61473 3% $284,653 -2% $1,452,87174 -3% $232,143 15% $1,623,06675 21% $236,215 19% $1,886,77176 17% $194,417 33% $2,461,50077 5% $194,417 11% $2,687,32778 -10% $126,543 -10% $2,375,14879 11% $90,304 5% $2,450,74680 33% $68,219 17% $2,808,22681 19% $27,833 21% $3,344,60682 15% $0 -3% $3,182,33883 -2% $0 3% $3,211,66484 27% $0 11% $3,503,44085 8% $0 4% $3,594,59286 15% $0 10% $3,885,01787 -6% $0 22% $4,685,52788 25% $0 -14% $3,963,71089 18% $0 -21% $3,070,39890 29% $0 -12% $2,622,984

8% $0 8% $2,622,984

No difference Big difference

CHAPTER 4 | ADDITIONAL INCOME IN RETIREMENT 18

Retirement income plans

4.2 CONSIDER RETIREMENT INCOME PRODUCTS

For those who prefer not to make portfolio investments, you may wish to consider retirement income products offered by local insurers. When CPF LIFE was introduced, it effectively killed off the private annuities market as it was close to impossible to match the returns, all else being equal. Nevertheless, the insurance companies have reinvented this product range as retirement income products which now offer themselves as a complement to CPF LIFE, especially if you have already hit the CPF top-up limit.

4.3 PARK YOUR LIQUID FUNDS IN SINGAPORE SAVINGS BONDS (SSB)

Singapore Savings Bonds are more savings than investment instruments. For retirees (or anyone, actually), they can be a very good place to park your liquid funds. They are flexible alternatives to fixed deposit accounts, but without penalty for redemption. These bonds are backed by the Singapore government and principal is guaranteed.

The SSB has a full tenure of 10 years and its interest is tied to that of Singapore Government Securities (SGS). You get a coupon every 6 months. You receive less interest at the start, but the interest steps up over time. The coupons and effective interest rates you will receive are all announced prior to your investment. If you hold your SSB for the full 10 years, your return will match the average 10-year SGS yield the month before your investment.

The difference between SSBs and SGS is that you have the flexibility to redeem the bond at any time, with a maximum waiting period of one month, without price risks. You always get back your full principal even if you sell before the 10 years is up. In this regard, SSBs are unlike Singapore Government Securities (SGS), which have to be sold on the secondary market if you want to redeem them early. The price at which you can sell the SGS is dependent on market factors. If the interest on newer issues of SGS has gone up, buyers will ask for a lower price to compensate for the opportunity cost. If market forces move the other way, the price of SGS can go up as well. Not so for SSBs. You get back what you invested, no more, no less, and of course you keep the coupons you have already clipped. In terms of overall return, an investor who holds an SSB for a given number of years would

To compare the different retirement income plans in the market, try MoneyOwl’s Insurance Robo.

Retirement income plans provide a monthly payout over a fixed period. The payout comprises both a guaranteed and non-guaranteed portion depending on the performance of the underlying fund. It is important to take note that a portion of the return is not guaranteed. Compared to portfolio investments, Retirement income products generally present less visible volatility as the payouts depend on the insurer’s ability to make the different threshold of investment returns in the insurance fund. In terms of disadvantages, you may find the capital outlay large relative to the return.

Retirement years

Yearly income payouts

Payout age Age

Non-guaranteed amount

Guaranteed amount

CHAPTER 4 | ADDITIONAL INCOME IN RETIREMENT 19

have an average return similar to that of an SGS of the same tenure. You even know what this return is ahead of time!

SSBs deal with the risk of investing loss (given that they are not really a traditional investment), but not inflation or other risks faced by retirees. They can complement your retirement plan in two ways. The first is to receive the coupons, but these are not high. The coupon rate for March 2019 issues are 1.95% in the first 12 months and step up to 2.55% for a 10-year period. Assuming you buy into $100,000 worth of these SSBs and hold it till maturity, you can expect to receive an average of just under $1,100 in coupons every 6 months. The second way is to draw down your SSBs by redeeming them gradually over set time intervals or when you have unforeseen emergencies.

You can buy SSBs through one of our three local banks – DBS/POSB, OCBC or UOB, via the ATM or internet banking. You will need either a CDP account or an SRS account and there is an administrative charge of $2 per application. The minimum investment amount is $500, capped at a maximum holding level of $200,000. In months when the SSBs are oversubscribed, you may not get your full allocation.

4.4 OTHER SOURCES OF INCOMEIn an earlier chapter, we had talked about monetising your home for additional income in retirement. In the event of severe disability in retirement, there may be payouts from ElderShield or the upcoming CareShield Life to help in long-term care expenses, in addition to what you may have from CPF LIFE/ Retirement Sum Scheme and investments. We will cover this in our next chapter.

The saying goes that the journey of thousand miles begins with a single step. So does a 20, 25 or 30-year retirement. We’ve listed down several ways you can supplement your income for a more secure and purposeful retirement. We hope you are encouraged to take them.

INTEREST FOR $100,000 INVESTED IN MARCH 2019 SSB

Years

25000

2000

1500

1000

500

0

Ann

ual I

nter

est (

$)

1

1950

2

1950

3

1970

4

2050

5

2130

6

2200

7

2300

8

2390

9

2480

10

2550

5A MEDICAL SAFETY NET

CHAPTER 5 | A MEDICAL SAFETY NET 21

Ageing is inescapable and as we age, our body’s healing ability declines significantly, especially in the silver years. We become more susceptible to illnesses and injuries which may eventually lead to some forms of disability. The Ministry of Health (MOH) estimated that one in two healthy Singaporeans age 65 could become severely disabled in their lifetime and may need long-term care. Furthermore, 3 in 10 severely disabled persons remain disabled for 10 years or more. With rising medical costs and longer life expectancy, it is no wonder that healthcare cost is an increasing concern among the seniors.

The cost of healthcare can come from 3 areas;

Retirees should have a strong medical safety net in the form of savings and medical insurance that can support their healthcare needs without compromising their standard of living.

With the generous benefits under the Merdeka Generation Package, Merdeka Generation seniors can now be more assured of their healthcare funding. Let us look at how Merdeka Generation seniors can manage their healthcare funding in the following areas.

5A MEDICAL SAFETY NET The third Must-Have for Retirement – a strong healthcare safety net that takes care of your healthcare needs.

Outpatient treatments Hospitalisation Long-term care

CHAPTER 5 | A MEDICAL SAFETY NET 22

5.1 FIRST SAFETY NET – OUTPATIENT TREATMENTSThese are treatments for common ailments (e.g. cough and colds), dental care as well as chronic conditions like hypertension and diabetes. The cost of treatment at GPs or even specialist clinics are generally manageable but the on-going follow-ups for chronic conditions can be a burden.

There are affordable options. Pioneer Generation (PG) and Singaporeans with low to middle-income can enjoy subsidies at clinics participating in the Community Health Assist Scheme (CHAS). With Budget 2019, this scheme is now extended to all Merdeka Generation Singaporeans regardless of income:

• Special CHAS subsidies at CHAS GP and dental clinics, which are higher than CHAS Blue subsidies (the more subsidised of the two CHAS tiers, for persons whose per capital household income is <=$1,100 and living in HDB flats) but lower than CHAS for Pioneer Generation; and

• Extra 25% off the subsidised bill at polyclinics and public specialist outpatient clinics.

With this as a reference, the Merdeka Generation seniors might be able to enjoy outpatient benefits, such as:

• Treatment for common illnesses at GPs could enjoy a subsidy of somewhere between $18.50 to $28.50 per visit.

• Simple outpatient consultation for chronic conditions (such as diabetes, hypertension) could enjoy a subsidy of somewhere between $80 to $90 per visit, up to a cap of $320 to $360 per year.

With these subsidies, outpatient treatments for the Merdeka Generation become more affordable and with many clinics participating in CHAS, it is not difficult to find one nearby.

5.2 SECOND SAFETY NET – HOSPITALISATIONThis is a key area where huge healthcare cost can arise. Big hospital bills pose a serious strain on retirement savings. Fortunately, every Singaporean and Permanent Resident is now covered under the compulsory MediShield Life scheme, which helps to defray the cost of huge medical bills at restructured hospitals for B2/C wards and selected outpatient treatments such as dialysis and chemotherapy for cancer.

MediShield Life is a good and affordable medical safety net and Merdeka Generation seniors can look forward to these benefits to help pay for the premium.

• Extra 5% discount on MediShield Life premium will be given and this will increase to 10% when a Merdeka Generation senior turns 75.

• MediSave top-up of $200 per year from now till 2023.

The amount of subsidy the Merdeka Generation gets depends on their citizenship (Singaporean or Permanent Resident), the Annual Value of their property and the household income per person.

CHAPTER 5 | A MEDICAL SAFETY NET 23

The overall discount on the MediShield Life premium for the Merdeka Generation is quite significant especially for the lower income. You can estimate your MediShield Life premium by using the Premium Calculator on MOH’s website12 (before the 5%/10% Merdeka Generation premium discount).

Is MediShield Life adequate for you?MSHL is catered for those who will stay at Class B2 or C wards at restructured hospitals. These are heavily subsidised wards with basic amenities and no flexibility to choose your preferred doctors.

Those who prefer amenities such as air-conditioning, attached TVs and toilets or choice of own doctors, may upgrade to an Integrated Shield Plan (IP) for:• Restructured hospital in B1 ward• Restructured hospital in A ward• Private hospitals

Interestingly, more than 6 in 10 people in Singapore own an IP and about half of them are catered for private hospitals. With rising IP premiums, some may find it no longer affordable.

Age next birthday

MediShield Life Premium

before subsidy

Estimated MediShield Life Premium (2019 rates) after existing subsidy based on household income and additional 5/10%

discount for the Merdeka Generation

Lower income8 Lower middle income9

Upper middle income10

High income11

61-65 755 453 491 528 717

66-70 815 489 530 570 774

71-73 885 531 576 620 841

74-75 975 585 634 682 926

76-78 1130 565 622 678 1017

79-80 1175 588 647 706 1058

81-83 1250 625 688 750 1125

84-85 1430 715 787 858 1287

The table above is applicable for Singaporeans living in residences with an Annual Value of $13,000 or less, which covers all persons living in HDB flats.7

6. Refer here for subsidies rate for Permanent Residents and those living in larger properties. https://www.moh.gov.sg/MediShield-life/medishield-life-premiums-and-subsidies/premium-subsidy-tables

7. Lower-income refers to individuals with a household monthly income per person of $1,100 or less.8. Lower-middle-income refers to individuals with a household monthly income per person of $1,101 to $1,800.9. Upper-middle-income refers to individuals with a household monthly income per person of $1,801 to $2,600.10. High-income refers to individuals with a household monthly income per person of more than $2,600.11. https://www.moh.gov.sg/MediShield-life/medishield-life-premiums-and-subsidies/medishield-life-premium-calculator#

Private hospitals A/B1 ward

WITH IP NO IP

CHAPTER 5 | A MEDICAL SAFETY NET 24

Age next birthday

MediShield Life Premium

Premium range of IPs in the market(MSHL premium + Additional Insurer premium)

Restructured B2/C ward

Restructured B1 ward

Restructured A ward

Private hospitals

61-65 755 1063 - 1235 1229 - 1528 1874 - 2712

66-70 815 1292 - 1534 1727 - 2102 2639 - 3589

71-73 885 1610 - 2036 2163 - 2691 3337 - 4635

74-75 975 1834 - 2316 2519 - 3082 3744 - 5376

76-78 1130 2156 - 3042 2877 - 3868 4602 - 6503

79-80 1175 2337 - 3099 3132 - 4143 4924 - 7166

81-83 1250 2525 - 3800 3443 - 4974 5237 - 7780

84-85 1430 2897 - 4001 3884 - 5216 6176 - 8579

(Source: MOH website. The range of premium pertains to IP plans currently available for purchase. The premium does not include any plan rider.) The MediShield Life Premiums shown above are before any subsidy given based on household income as well as the 5%/10% premium discount for the Merdeka Generation (refer to the previous table for reference). With these subsidy and discount, the IP premium will be lower than reflected above.

Note that you can pay the MediShield Life premium fully using Medisave. For IP, you can only use Medisave to pay the additional insurer premium up to these caps:• $300 if you are 40 years old or younger on your next birthday.• $600 if you are 41 to 70 years old on your next birthday.• $900 if you are 71 years or older on your next birthday

If you must upgrade or downgrade your IP, the golden rule is to make changes within the current insurer. If you switch to a different insurance company, the new insurer could impose exclusion on pre-existing conditions that you may have. What this means is that you cannot make any claims on the IP that is related to the excluded pre-existing condition.

5.3 THIRD SAFETY NET – LONG-TERM CAREMany will require long-term care due to severe disability in old age. A person is severely disabled if he or she is unable to perform at least 3 Activities of Daily Living (ADLs) independently, namely, feeding, dressing, toileting, washing, mobility and transferring. When it happens, caregiving is needed.

Compare IP plans here: https://www.moneyowl.com.sg/#/direct

Upgrading or downgrading your IPBefore making changes to your MediShield Life or IP, you should consider the following.

AFFORDABILITYThe premium for MSHL/IP increases over time. Consider the current and future premium.

CHAPTER 5 | A MEDICAL SAFETY NET 25

Read our commentary on CareShield Life here https://advice.moneyowl.com.sg/a-singaporeans-help-singaporeans-scheme/

Estimated CareShield Life Premium Table for selected Merdeka Generation ages (currently with ElderShield 300 and staying in an HDB flat)

Additional total premiums payable for 10 years - Female

Age Without subsidies

SC - With all subsidy and incentives^ PR - With subsidy

$0 - $1100

$1101 - $1800

$1801 - $2600

Above $2601

$0 - $1100

$1101 - $1800

$1801 - $2600

Above $2601

62 9699 3125 3554 3983 5699 8412 8627 8841 9699

67 10,200 3608 4040 4472 6200 8904 9120 9336 10,200

ElderShield was launched in 2002 to address the financial concern of long-term care. Being a non-compulsory scheme, a significant number of people chose to opt-out especially when it first started. The benefits of ElderShield are kept low for affordability. Monthly payouts are either $300 for up to 5 years or $400 for up to 6 years.

CareShield LifeFrom 2020, CareShield Life (an improvement from ElderShield) will be launched. Not only does it provide higher payouts of at least $600 (which increases till age 67 or when a claim is made, whichever earlier), the payouts are for life as long as severe disability persists. Severe disability can be due to a physical injury, illness or even severe mental impairment.

Merdeka Generation seniors who are not severely disabled can join CareShield Life in 2021. To encourage Merdeka Generation seniors to join CareShield Life, an additional participation incentive of $1,500 is given to join the scheme. This is on top of a previously announced $2,500 sum, making it a total of $4,000 discount to offset CareShield Life premium. This is in addition to current means-tested premium subsidies.

Your CareShield Life premium is dependent on several factors including your age, gender, citizenship, monthly per capita household income, residential property and whether you are currently on ElderShield plan or not.

Source: MOH website ^ Incentives include both Participation Incentive and Additional Participation Incentive for MG

Additional total premiums payable for 10 years - Male

Age Without subsidies

SC - With all subsidy and incentives^ PR - With subsidy

$0 - $1100

$1101 - $1800

$1801 - $2600

Above $2601

$0 - $1100

$1101 - $1800

$1801 - $2600

Above $2601

62 7313 1374 1697 2020 3313 6344 6505 6667 7313

67 7490 1594 1910 2226 3490 6542 6700 6858 7490

For a male, age 62, Singaporean, whose monthly per capita household income falls within the $1,101 to $1,800 range, his CareShield Life premium is estimated at $1,697 after subsidy and incentives for ten years. This works out to less than $170 per year. Premium without subsidy is estimated at $7,313, or about $731 per year.

For full details on CareShield Life and estimate your premium using the CareShield Life Premium Calculator, you can refer to https://www.moh.gov.sg/careshieldlife/about-careshield-life.

12. https://www.moh.gov.sg/careshieldlife/about-careshield-life/careshield-life-premium-calculator13. If you have ever opted out and re-joined ElderShield, have a single or 10-year ElderShield premium payment plan or have a paid-up policy, your personalised

premiums will be available closer to 2021.

CHAPTER 5 | A MEDICAL SAFETY NET 26

Source: ElderShield Review Committee Report, 25 May 2018

Those who opted out of ElderShield can either wait till 2021 to sign up for CareShield Life or get immediate coverage by first applying for ElderShield provided they are not older than 64 and are not severely disabled.

Should I switch from ElderShield to CareShield Life?Monthly payouts of $300 to $400 under ElderShield are insufficient to meet long-term care cost, especially as severe disability is likely to last longer than the 5-6 years after occurrence.

While you may have income from CPF LIFE payouts, it can be a strain to pay for long-term care costs out of these payouts.

Long-term care options include staying in a nursing home, being looked after by a helper or family member at home, or a combination of day care and homecare. The cost can easily range from $1,000 to over $3,000 per month before subsidies. Even after means-tested subsidies and CareShield Life payouts of $600, there will still be a cost that has to be borne out of one’s retirement income.

5.3 ESTIMATED COSTS OF LONG-TERM CARE OPTIONS FOR LOWER-MIDDLE-INCOME SINGAPOREANS AFTER SUBSIDY AND CARESHIELD LIFE PAYOUTS

CHAPTER 5 | A MEDICAL SAFETY NET 27

Source: ElderShield Review Committee Report, 25 May 2018

Given the high probability of severe disability, the duration of disability should it happen and the strain of long-term care costs on the family, Merdeka Generation seniors who are not yet severely disabled should consider joining CareShield Life early to take advantage of the Participation Incentives, if they are able to afford the premiums. This will provide a better safety net for long-term care.

You can further enhance the payouts by adding a supplementary Long-Term Care Plan (or ElderShield Supplement) from a private insurer.

Compare long-term care plans here https://www.moneyowl.com.sg/#/direct

6ESTATE DISTRIBUTION

CHAPTER 6 | ESTATE DISTRIBUTION 29

Estate planning concerns the loved ones left behind upon your eventual passing, how you can provide them with your hard-earned assets – leaving a legacy for your family and loved ones, a final act of love.

So, what happens to our assets when we pass on? How would these assets be distributed and who gets what? These are important questions that should be decided by none other than you – the owner of your assets – and distributed in accordance with your wishes. Without proper planning, we could be leaving a financial mess for our loved ones to pick up after our passing.

Distribution of assets upon death – or estate distribution – need not be difficult. A better understanding of the estate rules governing common assets such as property, CPF savings, life insurance, and the benefits of having a will, and taking action thereafter, can ensure that our assets will go to our intended beneficiaries without unnecessary hassle.

6ESTATE DISTRIBUTION In this sixth and final chapter in the Merdeka Generation series, we will be exploring estate planning – one of the most important aspects of financial planning that may often be overlooked by seniors and younger people alike. Indeed, everyone needs to plan ahead and take actions while they still have mental capacity, as one never knows when something may happen. For seniors in the Merdeka Generation, there may be a heightened sense of urgency as one starts to age.

CHAPTER 6 | ESTATE DISTRIBUTION 30

(Source: CPF)

Take, for example, Mr and Mrs Tan who are joint-tenants of a property, and if, say, Mr Tan passes on, the surviving spouse (Mrs. Tan) will inherit and become the sole owner of the property. As the property is under joint-tenancy, Mr Tan cannot create a will to distribute away his share. However, if the property is held under tenancy-in-common, Mr Tan could write a will to distribute away his share to others.

What if yours is a HDB flat?HDB flat can only be retained if the beneficiaries fulfil certain eligibility criteria including Singapore Citizenship or Singapore Permanent Residency and are at least 21 years of age; otherwise, it must be sold.

6.2 CPF SAVINGSYou should make a CPF nomination to specify how your CPF savings should be distributed. In the absence of a CPF nomination, your CPF savings will be transferred to the Public Trustee’s Office for distribution to your family under the Intestate Succession Act or the Inheritance Certificate (for Muslims).

Your CPF savings cannot be distributed via a will.

The process of disbursement via CPF nomination is swift, and I have personal experience in this regard. When my father passed on a few years ago, the CPF Board disbursed the CPF monies to my mum (the nominee) very quickly within 3 weeks because my late father did a CPF nomination. To my mum, it was not so much the money she inherited, but the expediency of settling such matters did help to bring about a closure sooner.

What does a CPF Nomination cover?Not all assets involving CPF are covered by a CPF nomination. Those assets not covered must be addressed separately.

6.1 HOME PROPERTYHow your share of the property gets transferred upon death depends on how it is being held, whether joint-tenancy or tenancy-in-common.

How your property will be distributed upon death

Joint-tenancy(Most common)

When one of the joint tenants dies, the decease's interest in the property will automatically be transferred to the

remaining surviving owners.

Tenancy-in-common

Each tenant holds a separate and distinct share of the property and can transfer his or her share of the property

to others via a will or, in the absence of a will, according to Intestate Succession Act.

Cover under CPF Nomination Not covered under CPF Nomination

1. CPF savings* in your Ordinary, Special, MediSave and Retirement accounts

2. Unused CPF LIFE premiums,

3. Discounted SingTel shares

*CPF savings cannot be included in your Will. They also do not form your estate and are protected from creditor claims on any outstanding debts.

1. Properties bought using your CPF savings

2. Payouts from Dependants' Protection Scheme (DPS)

3. Cash and investments held in the CPF Investment Account under the CPF Investment Scheme-Ordinary Account (CPFIS-OA)

4. Investments held under the CPF Investment Scheme-Special Account (CPFIS-SA)

Most properties are held under joint-tenancy. You can find out your property ownership status here.

CHAPTER 6 | ESTATE DISTRIBUTION 31

6.3 LIFE INSURANCE POLICIESIf there are no beneficiaries named in your insurance policies, the proceeds can be distributed by way of a will or, in the absence of a will, by Intestate Succession Act.

With effect from 1 September 2009, you can make a revocable nomination or a trust nomination on your insurance policies for your beneficiaries.

• A trust nomination – it is irrevocable and is meant to benefit your spouse and/or children.

• A revocable nomination – can name any person as a nominee and can be revoked anytime by you.

If there are beneficiaries named in your insurance policies before 1 September 2009, there could be some potential issues:

• If the named beneficiaries are a spouse and/or children, your policy is now under Section 73 of the Conveyancing and Law of Property Act, essentially you have created a statutory trust. This cannot be revoked unless the named beneficiaries give their consent.

• If the beneficiary is anyone other than spouse or children, there may be issues regarding its validity. Hence it may be prudent to remove the named beneficiary and do a revocable nomination or distribute it by way of a will.

What are the different types of CPF Nomination?

Before making a CPF nomination, do note there are 3 types to choose from depending on your needs.

1. Cash Nomination – this is the default option. In this nomination, your nominees will receive the CPF savings in cash. Download the form here (URL: https://www.cpf.gov.sg/Members/Schemes/schemes/other-matters/cpf-nomination-scheme).

2. Enhanced Nomination Scheme Nomination – Your nominees will receive the CPF savings in their CPF accounts. You can decide to transfer your CPF savings to their:

• MediSave account – for their healthcare needs; or• Special account – for their retirement needs.

Visit any of the CPF Service Centres to make this nomination.

3. Special Needs Savings Scheme Nomination – this allows parents to nominate their special needs children to receive the CPF savings on a monthly basis. To make this nomination, you would need to work with the Special Needs Trust Company (SNTC) and the CPF Board. More information on this scheme here.

CHAPTER 6 | ESTATE DISTRIBUTION 32

6.4 HAVING A WILLOther than most circumstances as explored above, the decease's estate of a non-Muslim will be distributed either by way of a will or, in its absence, according to the Intestate Succession Act.

Death without a Will – Intestate SuccessionWithout a will, the distribution of a decease's estate will follow the priority as set out by the Intestate Succession Act (ISA).

Deceased dies intestate leaving: Distribution

Spouse(No parents or issue*)

Spouse 100%

Spouse, Issue (With or without parents)

SpouseIssue (To be shared equally)

50%50%

Issue (No spouse)

Issue (To be shared equally)

100%

Spouse, Parents(No issue)

SpouseParents (To be shared equally)

50%50%

Parents(No spouse or issue)

Parents(To be shared equally)

100%

Siblings(No spouse, issue or parents)

Siblings(To be shared equally)

100%

Grandparents(No spouse, issue, parents or siblings)

Grandparents(To be shared equally)

100%

Uncles and Aunts(No spouse, issue, parents, siblings or grandparents)

Uncles and Aunts(To be shared equally)

100%

None of the above Government 100%

Under the ISA, spouse and children take precedence over parents, siblings and other family relationships. While it may seem logical with some, such a distribution order can be problematic, such as:• A married person with children hopes to leave behind something for his or her parents.

Under ISA, the parents are excluded.• A single person wishes to provide for both his or her parents and siblings. Siblings are

excluded in this case.

These issues can be easily solved by having a will.

Benefits of a willWith a will, you can decide who your beneficiaries are and how much they get. Equally important is the control you exercise to choose whom you trust to be your executors, trustees and guardians. Having a will can also avoid the potential conflicts and disharmony among loved ones who may dispute how the estate should be distributed. Lastly, the process of administrating the estate is generally faster with a will than without one.

*”issue” – includes children and the descendants of deceased children.

CHAPTER 6 | ESTATE DISTRIBUTION 33

Lasting Power of Attorney (LPA)Finally, do consider making a Lasting Power of Attorney while you have the mental capacity to do so. An LPA basically allows you to appoint one or more people [‘donee(s)’] to manage your personal welfare and property should you (‘donor’) lose mental capacity one day.

A donee can be appointed to act in 2 broad areas, whether separately or jointly:• Personal welfare – such as, where and who should donor live with, healthcare matters,

what to wear and eat.• Property and affairs – such as dealing with the donor’s property, managing bank

accounts, investing and making purchases of equipment for donor’s needs.

To make a LPA, you need to:• Fill up a form from the Office of Public Guardian. Till 31 August 2020, the LPA

application fee is waived for the more common LPA option (Form 1).• Engage a certificate issuer to sign as a witness and certify that you understand the

implications of an LPA. A certificate issuer could be an accredited medical practitioner, a practising lawyer or a registered psychiatrist. The average fee charged by an accredited practitioner is about $50.

• Send the form and certificate back to the Office of Public Guardian for registration. If there are no valid objections in the six-week waiting period, your LPA will be registered. The stamp of the Office of Public Guardian will be impressed on the registered LPA. The Office of Public Guardian will send it back to you for safekeeping.

Start writing your will here More info on Why Write a Will?

Interestingly, many people do not have a will. Common reasons being the high cost of writing a will, not knowing how to begin, and perhaps the time is not right.

With MoneyOwl’s online will writing service, which is complimentary with a promotional code, there is no reason to put off will writing any further. The guided will writing process will help you draft out your will in no time. Get it printed and signed before two witnesses (who cannot be a beneficiary or the spouse of a beneficiary) and your will is legally binding. If you need to make further edits, just come back and use the service again.

THANK YOU!