What the expert says

COVERAGE: Young couples should consider more protection for homes, and endowment plans, says Ms Chen.


    Jun 04, 2014

    What the expert says

    WHILE it is never too early to start planning for retirement, it is wise to do a regular review of your investment portfolio at different stages of your life.

    Besides saving for the future, young couples starting a family should consider more protection for their homes, and starting endowment plans for their children, says Gwendolyn Chen, a financial planner with Manulife Singapore.

    After this, they should pay more attention to their retirement funds, and regularly take stock of these plans.

    Here is Ms Chen's advice for Eric Koh and Priscilla Tan:


    It is good that Eric and Priscilla started early in saving and investing for the future, and are also thinking about their retirement. They have also made the right decision to set aside three to six months of their salaries as an emergency fund for rainy days.

    For a start, a young family should ensure that their protection needs are taken care of, including for premature death, disability, critical illness and hospitalisation.

    At Manulife, we have PlanRight, a tool to assist us in assessing a client's priorities. The assessment is based on financial provisions required for the family in the event of death, disability, critical illness and retirement, for education, savings and investment, children and so on.

    A personalised financial plan will then be created to suit each individual's needs.


    As Eric and Priscilla are in a new stage of their life, they should review their insurance portfolio and consider increasing their coverage as their responsibilities have increased.

    They have an endowment plan in place for Travis' education needs. A comprehensive hospitalisation plan for him is highly recommended. After which, they should consider other protection plans for Travis.

    Their flat will be ready next year and this will likely incur more expenses.

    Thus, they need to be mindful of renovation costs and avoid straining their savings. They should take up mortgage loan protection as well as insurance to protect their home against fire and theft.


    After managing their home expenses, they should pay more attention to building their retirement funds, especially as they are thinking of becoming semi-retired at the age of 55.

    Taking into consideration their low risk appetites, they can consider ManuWealth Secure, an endowment plan that is 100 per cent capital guaranteed upon maturity.

    They can choose to pay premiums over two or five years, with a wide range of policy terms: 13, 15, 20 or 25 years.

    Starting from the end of the chosen premium-payment terms, they will receive a yearly guaranteed coupon equivalent to 5 per cent of the sum insured until the maturity of the policy.

    The yearly cash coupons can be used for a family holiday or for their son's needs. If they don't need the coupons, they can choose to deposit them with Manulife to earn an interest of 3 per cent. Whether they decide to spend or save further, the choice is theirs.

    Upon maturity, the lump-sum payout can help them to fulfil their aspiration of setting up a cafe or microbrewery.

    ManuWealth Secure also provides coverage for loss of life, terminal illness, and total and permanent disability. Should the above happen, whatever premiums paid will be returned with 1 per cent extra to the family, regardless of the number of coupons that have already been paid out.


    Eric and Priscilla should continue to save and invest to accumulate wealth and make their money work hard for them. I recommend they review their investment portfolios regularly, in view of their low risk tolerance.

    For more information on retirement solutions, visit www.manulife.com.sg or call 6833-8188.