How Should I Invest My SIS Pension Money?
The answer to that question depends on a lot of things. How soon you will use the money is related to how young you are and how soon you will retire. How sensitive to risk are you? How much will you be relying on your SIS Pension money to supplement your retirement income? This writing cannot give you the individual attention that might really be necessary to tailor investments to your individual needs. Nevertheless, the SIS Pension Fund can be an important, even critical part or your financial security in retirement.
In general, the younger you are, the longer it will be until you will need to begin spending your SIS Pension money and the more risk tolerant you are, the greater exposure to stocks you should have in your investment mix.
The SIS Pension Plan uses the idea that the younger an individual is, the greater exposure to stock investments should be in the Age Based Investment program.
That program works well for many, but is it right for you?
Choose one Life Stage Fund.
The SIS Pension Fund provides you with five investment choices, each of which is already well diversified. There is little reason to choose more than one of the five Life Stage Funds. While you are allowed to choose two or more of the Life Stage Funds, doing so does not give you better diversification. For example, each of the five Life Stage Funds has 5% of the money invested in Real Estate. The Real Estate investment is with a pool of over 100 commercial, industrial and multi-family residential properties (all with fire protection) worth more than $6 billion in total. By choosing to put a portion of your money in each of the five Life Stage Funds, you still end up with exactly 5% of your money invested in that same pool.
The primary difference between the Life Stage Funds is the exposure to the stock market. You still do not get greater diversification by putting your money into two of the Life Stage Funds because, for example, the pool of Large Company Value Stocks in the Maximum Growth Fund are exactly the same as the Large Company Value Stocks of the Wealth Building Fund. Its just that the Maximum Growth Fund has a larger percentage of those stocks than does the Wealth Building Fund.
I got a late start in the industry. What can I do to maximize my benefits?
Back to Planning for Retirement