Don’t put all your eggs in one basket.
This is a good analogy for why you should spread out your investments. If anything affects one investment, your entire retirement income will not be in jeopardy. Doing this will also prevent you from reacting emotionally during downturns.
In retirement, your CPF LIFE monthly payouts forms the base layer of your financial security. However, the payout may only be able to pay for a basic standard of living.
To enjoy a higher standard of living during retirement, you can choose to contribute more to your CPF accounts during your younger days for higher CPF LIFE payouts. To diversify your income streams, you may also want to invest in other assets, including stocks, bonds and, if you are able to afford it, investment properties.
You can also supplement your retirement income with a retirement plan, such as AIA Retirement Saver (III). You can enjoy guaranteed monthly income for 15 or 20 years, starting from your desired retirement age. Regardless of how the economy fares, every dollar you contributed on yearly basis will also be guaranteed upon reaching your chosen retirement age. If the markets perform well, your retirement income stands to grow, cushioning you from the impacts of inflation and potentially enhancing your living standards in retirement.
Remember, if one income stream is affected, you need to be able to rely on other sources to continue receiving an income.