Experts recommend carefully assessing costs, income, financial goals, risk tolerance before allocating capital of VND 10 billion for retirement investment.
I am 54 years old, just retired. When I was young, besides working as a salary, I also made more money from personal loans, with excess money, I bought gold and hoarded it. In recent years, I have tried to invest in land. Up to now, I have more than 10 billion VND, excluding two plots of land in the province, the market price is about 3 billion VND each.
In the past, I have poured some money into stocks, but due to not enough knowledge and effort to monitor the market, I lost more than 50%. I was scared so I had to withdraw all the money. Now I really don't know what to do but deposit in the bank, but I find the interest rate too low.
According to experts, how should I invest 10 billion VND to have more money to enjoy a prosperous old age for the couple (both with pension and insurance). If I have extra money, I will use it as capital to support my two children when they want to start a business.
Dinhdinh1969
Two elderly people sitting at home watching tablets. Image: Freepik
Consultants:
The need to ensure financial security at retirement age is very important. The average life expectancy of Vietnamese people today is about 75, possibly higher. Thus, you need to prepare financially to enjoy a prosperous old age for at least 25-30 years.
We also need to define this as an investment for retirement, so it is necessary to consider and evaluate the situation and financial needs for retirement before allocating capital to the portfolio. Here are the factors to consider.
Cost
Expenses at retirement age will include: health care, travel - exchange, living. The cost of health care will depend on whether you already have life insurance with complementary products, whether you have health insurance to provide additional support, medical history and condition. When we have good health protection mechanisms, the amount of preparation for health will decrease and vice versa.
Travel and exchange costs will be higher. Because at this time, you will spend more time for yourself, have the need to connect with old friends, peers when the relationship at work decreases in retirement.
The normal cost of living in retirement will not be so high, since most of us no longer have to shoulder the burden of raising our children and going to school. However, it is still necessary to take into account lifestyle inflation, when the mentality of enjoying old age, wanting to spend for yourself better than before, will cause many additional expenses to increase at a higher level.
Income
When you retire, in addition to passive income from pensions, interest from savings deposits, house or land rental, you need to see what other sources of active income and how stable this income is? These can include active incomes from translation, consulting, teaching, book writing, online business or any job suitable for retirement age, while bringing joy to life besides generating income. import.
If the total income is stable, you do not need to allocate investments to asset segments with high yield or high volatility because it comes with high risk. Having a stable source of income will reduce the pressure on you when investing and also bring joy and increase connection when you retire.
Financial goals and legacy for children
You need to answer the following questions: What are your short, medium and long term financial goals? Are you planning to make a trip across Vietnam or travel abroad for a long time, every year? When you get married, give your children a husband or when your grandchildren grow up, what do you plan to give your children?
In addition, do you have different adjustments in terms of where you live, how you live compared to the present, such as changing your car or repairing your house? How do you plan to inherit your two children? Do you plan to financially support your children or grandchildren in their daily lives?
Level of risk tolerance
This is a measure to assess the willingness to accept risks and the benefits it brings of investors. This identification will help you quantify your investment decisions rather than emotional ones. High profit will go hand in hand with high risk and vice versa, when the investment is in the safe zone, the return will not be high.
Financial backup plan
Before investing, you need to set up a reserve fund for 6-12 months of living expenses, deposit one-month term savings to ensure unexpected needs in spending, medical examination and treatment.
The level of provisioning high or low will depend on income and income stability. If you do not prepare a reserve fund, when you need money, you have to sell assets quickly at cheap prices, investment efficiency is not as expected. In addition, you need to have contingency plans for negative scenarios when you have to adjust income and expenses accordingly (decrease or increase by 30%).
Based on the results of the above assessment, you will be able to do this capital allocation for a portfolio. Since there is not enough information about your financial situation and retirement needs to review and evaluate, I can only share a few tips on how to allocate for most retirement clients. as follows.
First of all, it is necessary to diversify types of investment products including savings, rental real estate, investment in open-end funds. This will help you to allocate risks and help your portfolio's return performance better.
I have some notes about investment properties. Deposits in small banks will have higher interest rates when deposited in large banks, the current interest rate ranges from 8,5-9,5% per year, good profit, low risk compared to other banks. other investment channels. The smaller the value of the apartment, the higher the rental efficiency, however, it is recommended to buy only apartments that have been handed over for less than 5 years, to ensure the price growth of the apartments. Townhouses for rent have lower rental efficiency than apartments, in return, price growth will be stable and better.
With open-ended funds active in the market, this is a form of passive investment in the stock market. However, only 10% of the total asset value should be invested and the investment cycle of this asset is medium-term, from 5-7 years.
In addition, before deciding to invest, you need to understand about the products, the investment cycle of each product, fluctuations in profits, their liquidity, investment procedures, taxes and fees involved. mandarin. Understand so that you do not invest according to feelings, but have a specific plan.
Finally, you need to create an overall financial plan for retirement, equivalent to the next 30 years, done by creating a cash flow over time, for the entire projected life. This plan includes sources of income over the years, taking into account the potential for income growth; the need to spend for yourself, taking into account the corresponding inflation and lifestyle inflation in specific periods; other related objectives; Monitor and update results, investment situation and asset growth.
When you have a clear understanding and a comprehensive picture of your financial situation for retirement, you will be more confident and enjoy your retirement to the fullest. You can also seek the help of a personal financial planner to create a detailed, detailed retirement plan together.
Tran Thi Mai Han
Personal Financial Planner at FIDT
