As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Thursday, 25 July 2019

How I likely to avoid sequence-of-returns risk from my investment portfolio

Read? Investment Portfolio Management : Know enough, Know your yield, Know your risk

Read? I Can Depend On CPF For Passive Income Upon Reaching 65 In 2021 To 85 in 2041

Spur21 July 2019 at 13:46:00 GMT+8

Usually any drawdown is taken from the least volatile asset i.e. cash then bonds.

Not ideal to drawdown from equities unless size of equities is >= 30X annual expenses.

We have to be realistic with retirement income for life as not every one can afford Fat FIRE or Fat retirement.

For Lean FIRE or Lean retirement; we have to be very cautious over sequence-of-returns risk. Like it or not; long-term investing for income is a Game of Capital size and investing strategies. For Lean FIRE or Lean retirement; there is little room to recover from any large draw-down at market low. 


  1. Uniquely Singapore way of retirement planning

  2. CPF is a unique retirement tool :)

    One way for those planning to retire at 55 or later is to start allocating more to CPF in your mid-to-late 40s to build up a bigger cash-over-BRS/MS value. Drawdown from this during your first few years of retirement so that negative sequence of returns risk becomes a non-issue.

    Problem for sinkies is that for the longest time we don't have safe bonds or deposits that pay good interest rates. SGS bonds may not be liquid when want to sell, and both SGS bonds & SSB pay rather low rates. CPF is the easiest option for sinkies, but of course many don't trust it or unable to hit BRS to really take advantage of it.

    Contrast to many other developed countries with mature govt bond markets. I also just read about a US fintech offering savings a/c with 2.69% interest rate and up to $1M insured per depositer.

  3. Hi Uncle8888,
    How would you define FAT and LEAN retirement?

    1. Your level net saving during FIRE or retirement. Can save more than 50% to invest is fat liao. Leanest FIRE is those passive income slightly exceeds expenses

    2. Fat or lean is usually defined by local expenditure-ability i.e. what real world people in your city or part of the world is spending based on socioeconomic status.

      This is tied very much to cost of living where you are staying, as well as the level of development of where you are staying.

      SingStat runs a quinquennial survey of Monthly Household Expenditure. The latest is 2016:

      You can see what amounts for HDB 1-rm flat with 1 person versus Landed property with 6 or more persons.

      So from retirement savings, estimate what is the realistic income that can be achieved on long-term basis, and compare with above different figures. You know whether is Fat or Lean :)

      And how much more you need to accumulate (or adjust downwards your expectations!). :P

    3. Oops sorry. Clarification: The latest available above is 2013 with additional updates till 2016.

      The latest HES was just done in 2018, but the data will take some time to become publicly accessible.

    4. 1. Spur,

      You're the statistics man!

      When others challenge you with "trust but verify", you can stand your ground :)

      No prizes on whether you did well in your academic studies ;)

      2. Rainbow girl,

      That's benchmarking with others to find what shoes would fit you best (extrospection) ;)

      What our big daddy and school system excel in!

      Then there's the "duh" alternative as in your own feet you don't know what shoes fit you best (introspection)?

      Define your CURRENT lifestyle - fat or lean - and you'll know what's fat or lean retirement is!


    5. The difference in lean and fat is to look at your tummy. How much is your spare? :-)

    6. Hi Uncle8888,
      LOL! Can't stop laughing... That's a new perspective to put it, and quite literal too!

    7. Thanks Spur for the statistics link!

      One very obvious pattern is that once Condo, no matter what household size, it produces a disproportionate spike up from the HDB counterparts. Hmm...

  4. Hi SMOL,

    I am not asking whether I am more suitable for FAT or LEAN retirement, I am just wondering how Uncle8888 defines them in the context of this post.

    I guess for the FIRE newbie, mostly will first target LEAN retirement (because it's the closer goal post). Then if they FIRE already but still decided to keep working and up their networth, eventually they could get FAT retirement (and perhaps a complementary fat spare tyre). :P


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