A few days ago, I came across this Capital Guaranteed Saving Plan by Prudential called Pru-Retirement something. May be this kind of plan is suitable for those who cann't stand recent market crashes ...
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Basically this example is like this :
1. You save $500 every month for 20 years. So you have save a total of $120,000
A - if market drops
2a. If market crashes and your investment value is less than $120,000 then the Guaranteed value is $120,000
3a. This particular plan adds some extra value to the $120,000 so what you get is actually slightly more than what you have saved, ie. $139,200
4a. As a result, the Minimum you will get back is $580 every month for 20 years !!
B - if market is good
2b. If market is good and your investment value worth more, ie. $230,000 or 6% increase every year.
3b. Calculation is the same except your capital is now higher.
4b. In this case, you will get $1,111 every month for the next 20 years - comparing to your initial saving of $500 only.
The good things about this kind of plan are :
. You will NEVER lose less than what you have put in !
. Better still, you will at least get back slightly more than what you put in !
. In good time, you still get to Earn More with the up trend !
Super Great and Perfect isn't it !? Well, do your homework, future post will re-look into this kind plan with its pros and cons.