[thoughts] Start thinking about retirement today

Background

My father retired end of June, and suddenly with more time and his fixed deposit maturing in a Low-interest environment. Was caught in a dilemma:

• money into fixed deposit (0.95% for 12 months), interest too Low
• Found the “higher” interest single-premium endowment, 2 years to be too Long
• Had too much time to run around, too little things to do

Current Situation 

Listening in to all his friends and my mother’s various advices, an elderly who has not been making much financial decision much was suddenly “forced” to make a decision. Or need to face up with losing out on “interest”. My father FOMO-ed and started to want to take action, he shared with me the possibilities:

• Use money to TOP up with retirement sum under my name so that i can enjoy some tax relief.
• Dump the money in SingTel shares 😑😑 and collect dividends.
• Just put money into one of the fixed deposit and wait till got better opportunity....

What We found out

• Topping up CPF retirement account, so that my siblings and i will enjoy some tax relief. The money will be distributed over 20 years... 20K will be  less than additional $100 a month. $20K liquid lump sum vs less than $100 extra seems pointless.
• Dumping into  SingTel Shares. Volatility in share price, over a shorter horizon (for my father)... dividend is not confirmed, and based on situation today, seems like will stagnate or reduce. Old man who cannot “regenerate” any capital loss, and maybe in a situation where he need to sell at a loss. The down-side is something he could not afford.
• Put money into fixed deposit. Simplest, acting now rather than wait. Earn some interest, better than nothing. However 0.95% of $20K get $95.... better than nothing..
• Voluntary contribution To CPF. I vaguely remember  AK, and other financial bloggers talking about voluntarily topping up CPF, to get a “higher” interest rate savings account for their parents. And did some probing, realised that voluntary contribution will allocate 84% of the money to Medisave, 8% to special account, the rest to OA. And in my father’s case where MA at the ceiling, it will go to the ordinary account.

What we eventually decide to do

As my father had been using the Medisave to pay insurance, he is a few hundred bucks away from his ceiling. we decided that:

• I TOP up my father’s Medisave till it hits ceiling ==> so that i get to enjoy some tax relief.
• My father does a voluntary contribution so that the money that earns OA & SA interest, and he can take it out when he needs it.

Lessons learnt

• Risk appetite does change significantly, and even if my father thought he could take on the risk of investing in equity, going through with him, showed otherwise.
• Retirement being a relatively extended period ~15years( retire at 67, and die at 82), we should plan for it not only financially, but also in terms of a routine to occupy this suddenly spared it time.

Do let me know any resources to help make his retirement more meaningful and enjoyable!