Providing for kids should crisis hit

Ms Evelyn Goh and her husband Eddy Cheong with their children - Elyse, nine, Emmanuel (centre), seven, and Ebenezer, three. The couple work in the financial advisory sector and anticipate a fixed retirement income of $4,800 a month, to be supplemente
Ms Evelyn Goh and her husband Eddy Cheong with their children - Elyse, nine, Emmanuel (centre), seven, and Ebenezer, three. The couple work in the financial advisory sector and anticipate a fixed retirement income of $4,800 a month, to be supplemented by investments in a diversified portfolio of low-cost index funds.ST PHOTO: MARK CHEONG

Providend deputy CEO's goals are funding tertiary education of three kids and retirement income

As a mother of three young children, Providend deputy chief executive officer and chief advisory officer Evelyn Goh says income provision is vital should any unforeseen events befall her family.

"One of my top priorities is to look at replacement of income in the event of death. This is crucial as we are a dual-income family with young children aged three, seven and nine," she said. As such, the 43-year-old has a $2 million term insurance cover, as well as a critical illness cover of $400,000.

"We use low-cost term insurance such that we get the coverage we need at the lowest cost possible. I do not have early critical illness plans as we think it is a 'good to have' and not a 'must have'. The premiums are also generally about two times more than the traditional plans," she said.

When it comes to medical insurance, the entire family is covered for private-level hospitalisation.

It helps that Ms Goh's husband, Mr Eddy Cheong, 46, is also in the financial advisory sector and both work at Providend, a fee-only retirement financial advisory firm.

"We are clear about the goals that we are planning towards - providing for the tertiary education funding of our three kids and our own retirement income," she said.

"I believe in and enjoy what I do at Providend and do not see myself retiring in the sense of stopping work completely, but we plan for retirement income streams when my husband is 60."

As part of their retirement planning, they purchased a retirement income product that will pay $1,000 a month when Mr Cheong turns 60. That will supplement their Central Providend Fund Life payout of $1,900 a month each when they turn 65, based on the Enhanced Retirement Sum amount.

Ms Goh said that, at a total of $4,800 a month, they will be provided with a comfortable, safe retirement income floor, based on Providend's "RetireWell" methodology.

However, as this amount is fixed and is not hedged against inflation, the couple have a regular savings plan to which they contribute a monthly amount, to be invested in a diversified portfolio of low-cost index funds.

"We are happy getting market-like returns, as decades of academic research has shown that few active fund managers beat their benchmark consistently and those who do cannot sustain it for long," said Ms Goh.

A version of this article appeared in the print edition of The Sunday Times on March 12, 2017, with the headline 'Providing for kids should crisis hit'. Print Edition | Subscribe