With the increase in interest rate, a sudden thought flashes across my mind.

“What if I cash out from all my equities and just put them in T-bills, Fixed Deposits and Singapore Saving Bonds?”

The thought is interesting enough for me to spend some time on the spreadsheet and simulate how long the money will last if I do that. The following are the assumptions made for the simulation.

  • T-bills and fixed deposits interest rate is at least at 3% for the next 5 years.
  • Inflation normalises to 2-3% in a few years time.
  • Projection of expenses is correct.
  • No change in CPF interest rate and withdrawal age.
  • CPF shielding is still a viable option
  • Lease buyback is still a viable option

The outcome is actually not too bad. Based on the above assumptions, money will last me till 83. Putting in a rough buffer, it can last me for at least 30 years till I am 78. After which, I will be left with the payout from CPF Life.

It’s a feasible option but I won’t be doing it. Base on current projection, I would probably need more than what CPF Life is paying out. The main expense is likely to come from private healthcare insurance. Also since nothing is for certain, a bit more buffer is always welcome to cater for any unexpected expenses. The most important reason is that I still enjoy the investment process. Just like a plant lover who derives joy from tending to his garden, I get that from managing my portfolio.

So for the current moment, I am not going to sell out my equities.

But one day I still might.

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