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Retirement Journey Update for November 2021

Updated: Jan 2

November started out well for equities in general. However, the emergence of a new mutated strain of the coronavirus known as Omicron sent stocks into a tailspin. This new strain is reported to be much more potent than any of the previous strains including the Delta variant. US treasuries surged, proving once again its safe-haven qualities. Below is the breakdown by assets and geographies of the multi-strategy model maintained with iFAST as of the end of November.


iFAST large account allocation

The multi-strategy model benefitted from the surge in US treasuries. However, the gains from US treasuries were offset by losses from equities and REITs. All this culminated in the overall portfolio losing 0.9% for the month.


iFAST large account performance

Let's see how our retirement heroes are faring at the end of November 2021.


John, 31 years old, looking to retire in 19 years


John invested USD 40K upfront at the beginning of November 2020 and he contributed USD 500 every month subsequently. As of the end of Nov 2021, he has contributed USD 46K and he is currently sitting on some comfortable profits of USD 8K. If he sticks to his plan, he can expect to withdraw USD 7.5K every month when he retires in 19 years without ever depleting his retirement nest egg. In fact, by the end of next year, John should have accumulated more in his retirement portfolio than in a typical annuity plan.


John Retirement

Paul, 51 years old, looking to retire in 9 years


Like John, Paul invested USD 40K upfront at the beginning of November 2020. However, he knows he has a shorter runway than John to compound his portfolio. The good thing is that he has a higher income than John so he contributes USD 4K every month subsequently. As of the end of Nov 2021, he has contributed USD 88K and currently sits on some comfortable profits of USD 10K. If he sticks to his plan, he can expect to withdraw USD 9.5K every month when he retires in 9 years without ever depleting his retirement nest egg.


Paul Retirement

Sam, 66 years old, already retired


Sam doesn’t have any runway to compound his wealth as he is already retired. Fortunately for him, he had accumulated USD 1M of savings which he invested upfront at the beginning of November 2020 and started to draw out USD 10K every month from this portfolio. As of the end of Nov 2021, he has already drawn a total of USD 130K but his portfolio is still worth USD 1.05M. In fact, he can expect to continue drawing USD 10K every month while his portfolio value remains about the same. This is a 12% withdrawal rate in a retirement account that never depletes.


Sam Retirement

 

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