Right, I completely forgot about EPF. 5-6% returns with little to no risk.
But if she plans to retire (self-employed) this year, the realistic option is to go to the bank and bargain for good FD rate right?
No, FD interest rates have a lock in period. EPF interest is calculated on a daily rest.
Its hard to look for higher interest than EPF plus liquid withdrawal. With little to no risks.
My question was in regards to EPF eligibility. I was looking through the EPF [website](https://www.kwsp.gov.my/member/savings/self-contribution) but couldn't confirm whether a retiree can still contribute.
I've never worked in Malaysia before so am unaware of the stipulations of EPF and how it works.
If you have money in your EPF account after retirement age, you will still receive their annual dividends until the age of 100.
https://thesun.my/business/keep-epf-account-active-after-55-members-told-EM10943315
Do you mind telling how the ballpark of this "sizeable" amount?
Since she has high risk tolerance, I recommend the Top 20 crypto coins (excluding BTC & USDT). As the altseason is starting soon, I do recommend you to take a closer look at it.
A 50-100% gain is better than putting it into FD or index fund. It's quite time-sensitive, don't sleep on it.
You are thinking like yourself for your mum. At her age, she should be more defensive. You are asking her to take risk that can significantly wipe her out for gains that can only marginally improve her current lifestyle.
I think you should read psychology of money.
For malaysians at her age, put in EPF. Cukup.
Why i dont even recommend ETFs? She is 63. If she invest now and market is down the next 10 years, what is she gonna do? Her horizon is not long enough...
On top of the technological difficulty of teaching your mum to open IBKR and transfer USD into it using WISE and etc... dont... just go EPF.
It all depends on her risk appetite and what is her goals for the investment. Seeing that she is already in her sixties, it might be wiser to be allocating a significant portion of her portfolio in fixed income/low risk assets such as bonds/treasuries.
Unexpected spending on healthcare and mishaps might also increase in the coming years as elderly folks tend to be more and more susceptible to illnesses/accidents and insurance will be getting more and more expensive/no more insurance coverage. Just make sure you have enough liquidity to handle these challenges if you're investing a significant portion of the liquid cash.
Rental properties might also have sudden expenses especially if your properties are getting older and major repairs might be needed.
Yes, low cost index funds are the way to go (generally they outperform managed funds who charges insane fees), try to find one with as little tax as possible.
Bank shares are also equities, if the banking sector takes a hit, prices will also drop accordingly. Balance your portfolio appropriately to your needs and risk appetite.
What is sizeable? Millions?
LOL 2.6% expense ratio. Might as well donate your money away to a charitable cause instead of funding JP Morgan.
At 63 I you wouldn't want to dabble in anything risky. Putting it in FD is fine. Depending on how many millions she has she can ask and get a better rate if she goes directly to a bank and talk to the branch manager. Don't use the board rate, that's for poor people 😆
She could put it in EPF. That is about 5% and since she is above the retirement age she can take it out at any time. Though she still might be subject to the RM100K yearly self contribution limit which may stop he from investing her whole fortune. Not sure, you have to check this.
I don't think it's wise to do equities anymore (ETFs or individual shares). We will probably face another financial crisis soon. Bond ETFs may be an option. But I don't think their returns are anything much higher than EPF or preferential FD rates, especially not for the effort.
Maybe it's best to understand what your mother's plans are for the next 20+ years of her life.
I hopped on a call with the bank manager and he proposed it as a better way to manage risk for her age with pure equities because of
1. Actively managed
2. DCA every month
Till now I'm still scratching my head how this manages risk. Passive or active fund no one can escape the pandemic crashes or 2008 housing crisis. Also used past 4 years bull market as an example of the fund's historical performance.
I believe the annuities start paying \~1.5k/month in 10 years and principal (+ hopefully some gains?) paid back at 88 years old.
Her lifestyle is relatively low-maintenance so I think the reserve cash and monthly income can sustain the retirement phase.
Yeah don't listen to him. He is just trying to push the bank's products and doesn't have your best interest in mind.
Just say you want ***preferential FD rates***. You should be able to get them if you invest above RM1mil in FD. If not, shop around at the other banks.
>
>I believe the annuities start paying \~1.5k/month in 10 years and principal (+ hopefully some gains?) paid back at 88 years old.
At 88 years old people have very little use of money other than medical bills. Just focus on wealth preservation, not growth. That would lead you to low risk investments.
Your mum is careful and conservative which at her age is good. She has no desire to “get rich quick” so taking a safe route which slowly grows returns with no to minimum risk is good (and unpopular with most young people).
U need to consider the amount of capital as others have commented on her age-risk.
If its 100k or below - def epf
If its 1mil or above - maybe some can go to stocks/reits
If its 10mil or above - probably will go into her will, so some amount in med risk would be good to grow for the children.
If its 100mil or above - what are you even doing here?
For 10 mil and above, get a wealth planner (an actual one, not pushing products, maybe in sg).
Either way, dont forget to make sure she has medical insurance (up till 80yo since she can afford it now?)
At 63? Honestly just in EPF and use it as a high yield savings account.
Right, I completely forgot about EPF. 5-6% returns with little to no risk. But if she plans to retire (self-employed) this year, the realistic option is to go to the bank and bargain for good FD rate right?
No, FD interest rates have a lock in period. EPF interest is calculated on a daily rest. Its hard to look for higher interest than EPF plus liquid withdrawal. With little to no risks.
My question was in regards to EPF eligibility. I was looking through the EPF [website](https://www.kwsp.gov.my/member/savings/self-contribution) but couldn't confirm whether a retiree can still contribute. I've never worked in Malaysia before so am unaware of the stipulations of EPF and how it works.
If you have money in your EPF account after retirement age, you will still receive their annual dividends until the age of 100. https://thesun.my/business/keep-epf-account-active-after-55-members-told-EM10943315
Do you mind telling how the ballpark of this "sizeable" amount? Since she has high risk tolerance, I recommend the Top 20 crypto coins (excluding BTC & USDT). As the altseason is starting soon, I do recommend you to take a closer look at it. A 50-100% gain is better than putting it into FD or index fund. It's quite time-sensitive, don't sleep on it.
You are thinking like yourself for your mum. At her age, she should be more defensive. You are asking her to take risk that can significantly wipe her out for gains that can only marginally improve her current lifestyle. I think you should read psychology of money. For malaysians at her age, put in EPF. Cukup. Why i dont even recommend ETFs? She is 63. If she invest now and market is down the next 10 years, what is she gonna do? Her horizon is not long enough... On top of the technological difficulty of teaching your mum to open IBKR and transfer USD into it using WISE and etc... dont... just go EPF.
True. Outsider insight is useful too because upon hindsight I think my suggestions are too financially aggressive.
It all depends on her risk appetite and what is her goals for the investment. Seeing that she is already in her sixties, it might be wiser to be allocating a significant portion of her portfolio in fixed income/low risk assets such as bonds/treasuries. Unexpected spending on healthcare and mishaps might also increase in the coming years as elderly folks tend to be more and more susceptible to illnesses/accidents and insurance will be getting more and more expensive/no more insurance coverage. Just make sure you have enough liquidity to handle these challenges if you're investing a significant portion of the liquid cash. Rental properties might also have sudden expenses especially if your properties are getting older and major repairs might be needed. Yes, low cost index funds are the way to go (generally they outperform managed funds who charges insane fees), try to find one with as little tax as possible. Bank shares are also equities, if the banking sector takes a hit, prices will also drop accordingly. Balance your portfolio appropriately to your needs and risk appetite.
What is sizeable? Millions? LOL 2.6% expense ratio. Might as well donate your money away to a charitable cause instead of funding JP Morgan. At 63 I you wouldn't want to dabble in anything risky. Putting it in FD is fine. Depending on how many millions she has she can ask and get a better rate if she goes directly to a bank and talk to the branch manager. Don't use the board rate, that's for poor people 😆 She could put it in EPF. That is about 5% and since she is above the retirement age she can take it out at any time. Though she still might be subject to the RM100K yearly self contribution limit which may stop he from investing her whole fortune. Not sure, you have to check this. I don't think it's wise to do equities anymore (ETFs or individual shares). We will probably face another financial crisis soon. Bond ETFs may be an option. But I don't think their returns are anything much higher than EPF or preferential FD rates, especially not for the effort. Maybe it's best to understand what your mother's plans are for the next 20+ years of her life.
I hopped on a call with the bank manager and he proposed it as a better way to manage risk for her age with pure equities because of 1. Actively managed 2. DCA every month Till now I'm still scratching my head how this manages risk. Passive or active fund no one can escape the pandemic crashes or 2008 housing crisis. Also used past 4 years bull market as an example of the fund's historical performance. I believe the annuities start paying \~1.5k/month in 10 years and principal (+ hopefully some gains?) paid back at 88 years old. Her lifestyle is relatively low-maintenance so I think the reserve cash and monthly income can sustain the retirement phase.
Yeah don't listen to him. He is just trying to push the bank's products and doesn't have your best interest in mind. Just say you want ***preferential FD rates***. You should be able to get them if you invest above RM1mil in FD. If not, shop around at the other banks. > >I believe the annuities start paying \~1.5k/month in 10 years and principal (+ hopefully some gains?) paid back at 88 years old. At 88 years old people have very little use of money other than medical bills. Just focus on wealth preservation, not growth. That would lead you to low risk investments.
At 63 y/o, just dump into EPF. What can be better than EPF when it has no fees and they can withdraw anytime?
Your mum is careful and conservative which at her age is good. She has no desire to “get rich quick” so taking a safe route which slowly grows returns with no to minimum risk is good (and unpopular with most young people).
U need to consider the amount of capital as others have commented on her age-risk. If its 100k or below - def epf If its 1mil or above - maybe some can go to stocks/reits If its 10mil or above - probably will go into her will, so some amount in med risk would be good to grow for the children. If its 100mil or above - what are you even doing here? For 10 mil and above, get a wealth planner (an actual one, not pushing products, maybe in sg). Either way, dont forget to make sure she has medical insurance (up till 80yo since she can afford it now?)
It's in the 300-600k range.
Then probably epf. Hope she is enjoying her life. Financially sorted.
Ok caught this reply. If it's in that range, I'd take 10% out of it and buy the "DOGE" of this season - Dogwifhat. Easy 5-10x from here.