Posted by ks55 > 2015-09-09 21:15 | Report Abuse

It is absolutely true for the retirees.

If you have to withdraw more than what your nest eggs can generate, you are effectively “selling on the dips and locking in all the losses” at present market environment.

Good to have 'minimum sum' placed under the safe umbrella of REITs to generate the amount of recurrent income via income distribution. You are at least need not worry about daily expenses. Singapore Government introduced 'CPF Life' which guarantee those above age 65 will receive certain minimum amount every month through out their life time.

What type of REITs that will subject you to minimum risk?
I believe you should cover as many retail REITs as possible. These REITs will have a total of few hundreds if not thousands tenants in tens of malls spread over the whole country. Losing 10% of the tenants will not hurt you very badly in terms of total income distribution. Try to have lesser exposure to office REITs right now.

REITs are safe bet if you think property replacement cost will be higher each year due to inflation. REITs prices may fluctuate like any other share, but to a lesser extent. However, rental earning especially for retail REITs will be rather stable. Forget about the daily price fluctuation. As a retiree, your main concern will be getting a steady dividend income. No matter what happen to the market, your REITs will appreciate over the years provided you don't cash out from your REITs portfolio.

Once you have established your 'minimum sum' under REITs, you may want to use your 'extra' to capitalize on the on coming market meltdown. Unless you are very sure you can make some extra 'pocket money', as a retiree, capital protection is utmost importance to make your retirement life care-free.

Happy retirement.......