To start up the key message as below important to have Retirement plan
"Don't Simply Retire for somethings, have somethings to retire to"
Always prepare for retirement as it is important for mid income group, as this group not entitle for government support also not rich enough to live freely.
some weird signs such as mid income group of people wish to retire early while rich group of people above 80's is still working especially those founder. think they can't give up or retire as it might impact a lots of parties.
So retirement plan shall not only consist of fund to retirement only also shall inclusive of activities and friends after retirement. shall have some hobbies after retirement so that the life after retire may not be so free, nothing to do and loss the focus of life.
It is important to have plan for both fund and life after retirement.
For the below table 1, do not earn dividend but loss the capital. can be seen based on below table 1 we can observe that all below blues chips is paying about 4-5% dividend yearly , but the price volatile is about 30 - 40% range. it means u may earn 4-5% but at a risk of losing 30 - 40% on capital due to pricing volatile based on 1 year. The only method to overcome this is buy at low price for blues chips, but blues chips always sell at discount when there is big crisis, which the company is seen to be in downtrend or might be in bankrupt. so it is rather difficult to justify if this crisis won't kill the company and it will revive after the crisis.
Table 1
As for insurance plan there is different type of insurance for medical, everyone shall evaluate and decide which medical plan suit them most. refer to Table 2.
Table 2
The key message bring out on this book is to create a longer trend of income to sustain your retire life. but it is more suit for those have some capital on hands. it suggest that to break the plan into first 5 years, 6 to 10 years and 10 years above.
1) First 5 years plan - have deposit fix or saving so that the money can be spend at emergency(low interest)
2) 6 to 10 years plan - have investment for mid term, can be either insurance or equities. (Mid interest 4 - 6% yearly)
3) 10 years above - have plan for investment for long term such as equities or bond so that the return is higher. this is important for longer term investment as equities always volatile and you can have more time and margin to hold stocks when the price is down. ( high return > 10% yearly)
with all this 3 method, the return and efficiency of the capital is increase and can sustain for longer retirement life.
Conclusion
Retirement plan is important especially for mid income group, as most of it is once stop working stop income, so it is rather important to plan and executed early.
Retirement is not only involve money but also life after retirement such as friends, families and hobbies.
also need to aware on the risk and reward on the investment type that have been choosing, do not fall for trap that earn dividend but losing capital.
