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CEO's reply letter to ST "Estate Duty puts retirees in a
dilemma" (ST 28 Dec 2005)
To The Editor
The Straits Times (Forum)
28 December 2005
I refer to the letter from Ms Janice Ong entitled "Estate Duty puts retirees in
a dilemma" (ST 28 Dec 2005).
Currently, estate duty is payable on liquid assets in excess of $600,000. Ms
Ong said that a retiree needs more than $600,000 to maintain a reasonable
standard of living.
I wish to give the following suggestions to a retiree with large savings on how
to avoid paying estate duty.
1. Invest a significant portion of your lifetime savings in a life annuity. It
pays an attractive monthly income which is guaranteed for a lifetime. As the
life annuity includes the gradual release of capital during the expected
lifetime of the retiree, it will be free of estate duty.
2. Invest in a participating annuity which increases with bonus in most years.
The increased payment will help to offset the higher cost of living.
3. Keep up to $600,000 in liquid assets. This gives you the flexibility to meet
unexpected cash needs, and is within the exemption limit.
4. Transfer any remaining savings to your children earlier, rather than on your
death. If you do not wish to make a lump sum gift, you can buy a term annuity
to transfer the money in annual sums over a certain number of years. You can
find more about life annuity from our website,
http://www.income.coop/insurance/glannuity.
NTUC Income has a market share of about 60 percent of all annuities sold in
Singapore. Nearly 30,000 people have bought an annuity from us. Most retirees
invest between $50,000 to $100,000. The largest investment in an annuity exceed
$1 million.
NTUC Income
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