In the last article, we concluded that if you live forever and invest in a balanced portfolio, the prudent and long-term thing to do is to spend about 2.5% of the value of your portfolio and adjust your expectations to the rising and ebbing size of your wealth hoard.
But what happens if you do not live forever?
In most cases, people die at age 85 in Singapore and if you spend 2.5% of that wealth annually, it is highly likely that you will leave too much to your beneficiaries after you die and underspending in your life. Which is fine for married folks with kids but not singles.
The solution is to buy annuities, which allow you to buy a monthly cash flow that will pay you so long as you live. This will boost the amount of money you can spend safely
...
