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Risk profile of investments

 As I approach the special age of 55 (that's why CPF changes happens)...my tolerance for risk in financial investments expectedly dwindles. It's funny, because like most folks, when I was younger in my 30s/40s, my thoughts are I will be ok to take risks even when I am 60s. 

Now I am in 50s, I changed. lol

Wiser I guess?

At this age, what I have accumulated is precious, and I certainly do not wish to go back to slogging for income if my investments turn so bad that I need to top it up via my work income. 

I feel this is why risk tolerance drops. 

So, while I still want to be invested in the stock market, I will certainly start to gradually pivot the components of my portfolio. 

Plan is to pivot to more ETFs, specifically STI ES3 and S&P 500. So my investments will depend on SG and US economies.

Not that I think these will be the best countries, but these are places which I am very familiar with over many years of working and investments.

Will I still own individual stocks? Yes. But they should not take up more than 40% of my portfolio. Likely I will aim for around 30% and in fact I may reduce to 20% when I am well into my 60s, when my aim is to sustain and draw down to enjoy, vs trying to take risks to grow fast.

Also, I will likely try to max out my SSB to $200k, as a solid base. And if I do have more funds, I will even consider Tbills.

Couple this with CPF Life and SRS drawdowns, I think this is a good plan.

Invested:

25-30% equities of individual stocks (SG and US)

60-70% equities of ETFs (ES3 and S&P 500)

5-10% in SSB/Tbills

Cashflow:

Dividends from ETFs and stocks

SRS drawdown (age 62 onwards), 10 year run

CPF Life (age 65 onwards)

Gradual drawdown of funds to enjoy life. 

Cash Buffer:

12 months of cash in savings/CPF OA (after 55)

Home equity:

Hopefully fully paid up by 60-65. But I am of the type who prefer to stretch my mortgage on my live in home as I don't see the need to lock my money up in the home I live in as it doesn't generate income.

So, perhaps this should be more about the positive equity (value of home subtract mortgage outstanding)

The home equity provides a flexible option to fund more retirement spending, by allowing me and wife to downsized and unlock the equity. If there is no need to, then this just becomes our legacy 

Insurance:

Some of my policies are life+investments, and those could be taken out as I well into my 70s, so I need the cash. If not, these will just be my legacy. 

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