How to plan for a sabbatical leave – 5 tips to make it a success

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I came across an article recounting a woman’s experience with taking a unpaid sabbatical, in which she expressed regret due to feeling financially strained and falling behind her peers in achieving milestones after. However, despite such challenges, a sabbatical can offer valuable respite from the daily routine, providing an opportunity for personal growth. Particularly in the Asian context, where work culture often emphasizes long hours and high stress levels, embracing a sabbatical and embracing a slower pace can promote mental well-being and overall health.

So how can you have your cake and eat it too? This is part 1 of a 2 part series – 5 simple tips to make your sabbatical leave a roaring success!

5 Tips not to miss!

  1. Start your sabbatical from mid year.
    If you are considering a 1 year sabbatical leave, it is better to do it from the mid of the year than start of the year. This is due to the way income tax is calculated, which assesses income earned over a full calendar year. By initiating your leave in the middle of the year, your chargeable income—and consequently your income tax liability for the preceding year—would be lower
    Additionally, you may not have to contribute to SRS for tax savings, thus reducing your financial commitment.
  2. Utilise passive income instead of drawing down on capital fully.
    I have come across many people who drawdown on their savings during their sabbatical. However, watching your hard-earned savings diminish can evoke feelings of unease rather than the desired sense of rejuvenation and contentment. 
    Rather than risking insecurity, anxiety, and a rushed return to the workforce, consider living off passive income streams. If you don’t already have passive income sources, focus on building them before embarking on your sabbatical journey. This proactive approach can ensure financial stability and peace of mind during your time away from traditional employment.

    You may not be able to fund your expenses fully, but even a partial amount is good.
  3. If you have a mortgage, always leave a float in your CPF OA Account.
    Never wipe out your CPFOA when purchasing a property. Whenever possible, leave at least 18-24 month’s worthof mortgage repayment in your OA (example: if your monthly mortgage is $2K. Keep at least $48K in your CPF OA). 
    This ensures that you do not have to fork out additional cash for loan repayment when your monthly CPF contribution ceases.
  4. Set clear intentions & set boundaries
    Define your goals and objectives for the sabbatical. Whether it’s for rest, personal development, travel, or pursuing a passion project, the clarity will guide your journey to be a more fruitful one.
    If you are returning to the same job, inform clients, colleagues & partners about your sabbatical plans well in advance. This will help to set clear boundaries regarding communication and work expectations during your absence.
  5. Conduct a thorough review of your finances post-sabbatical. 
    Assess any changes in income, expenses, or financial goals, and adjust your financial plan accordingly. It is not bad to take a break but it is bad when taken irresponsibly.


That’s all for now. Look out for the next article on the step by step process to planning for it!

Yvonne Lim is a Certified Financial Planner & Estate Planner with Financial Alliance – Singapore’s largest IFA. Contact: yvonnelim@fapl.sg

How to claim from your medical insurance (shield plan)

Note: This first appeared in the monthly newsletter (Pinnacle Wealth series) to my clients. 

(1) How/Where should I submit my claim?

For Singaporean & Permanent Residence, you are advised to do it via electronic filing, commonly known as E-File. You may request the admission office of the hospital you’re admitted in to do the electronic filing. This process only facilitates a direct billing to your insurer. It must not be mistaken as an approval of the admission claims.

For Foreigners, unless your health insurer provides a direct billing facility, you’re required to pay the bill on your own and, subsequently submit the claim for reimbursement.

(2) How may I request for a Letter of Guarantee if the hospital requires one?

Most Insurers provides electronic Letter of Guarantee, kindly speak with the hospital admission officer and they shall check and advise you on this. Most insurer works directly with hospitals for eLOG issuance. Please be aware that eLOG is by no means a claimsubmission or approval. It is simply a letter to reduce the upfront cash deposit by patients during admission and/or surgeries.

(3) Who should I submit my claim first?

While MOH FAQs recommends that you claimfrom your employer benefit insurance first before your ISP personal medical plans, based on our experience, e-filing under your ISP first often provides a seamless claim process.

(4) When should I submit my claim?

Upon discharge from the hospital. For day pre & post hospitalisation treatment or day surgeries, you can submit the claim after the procedure is done. However, it is best to do it within 3 months.

(5) What documents do I need to keep/submit?

Minimally, you should submit/keep the following documents:

  • Discharge Summary Letter
  • Hospital/Clinic’s Invoices & receipts
  • Duly signed Claim Form, if any
  • Duly signed Doctor Report, if any

Lastly, if you hold multiple health insurance policies, do note that:

  • You may claim from multiple policies as long as the total amount of reimbursement across all insurers shall not exceed total bill paid.
  • In the event there is any overlapping claimreimbursement across insurer, the insurer with first payor status shall reimburse the insurer with last payor status.
  • Medishield Life, Integrated Shield Plan reserve the last payor status, while company health insurance has the first payor status.

If you’re unsure about your entitlement/insurance benefit, do reach out to me via whatsapp/email.

Shield Plans: NTUC Income Incomeshield, Singlife Myshield, HSBC Shield, AIA Healthshield, Raffles Shield, Prushield, GE Supremehealth.

Yvonne Lim
Representing IFA, Financial Alliance
https://engage.fa.com.sg/yvonnelim/

what to do with your children red packet?

As we conclude the festivities of the new year, an intriguing question has been raised by many of my clients: What should be done with children’s Ang Bao Monies? Our recommendation? Invest it. And for those without children, consider investing for your own future if you haven’t already done so.

Benefit 1: Providing a Head Start

One of the greatest advantages our children possess is time, and investing their Ang Bao or birthday money could prove to be one of the most prudent decisions. While money can be replenished, time is finite. Albert Einstein famously remarked, “Compound interest is the eighth wonder of the world.” By initiating investments at an early age, there is the potential to significantly augment their wealth. Even with conservative estimates, the power of compounding over time can yield substantial returns.

What to do with your children Angbao Money? — Engage

Benefit 2: Fostering Financial Literacy and Exposure to Market Dynamics

Financial markets are inherently volatile. Introducing children to investment early on exposes them to the realities of market fluctuations, instilling in them the understanding that the path to financial growth is seldom linear. This exposure cultivates resilience and equips them with the mindset to make informed, rational decisions, devoid of emotional biases. Moreover, discussions surrounding investments open avenues to explore various businesses and industries, igniting curiosity and potentially uncovering their passions.

What to do with your children Angbao Money? — Engage

Benefit 3: Cultivating a Positive Relationship with Wealth

For many children, money is synonymous with immediate gratification – a means to acquire possessions or experiences. By introducing the concept of investment, we shift the paradigm from scarcity to abundance. Through prudent financial decisions, we demonstrate the potential for sustainable growth and the ability to create value not just for oneself, but for others as well.

If you wish to find out more about starting an investment account for your children (or for yourself if you haven’t), do drop me a whatsapp/email.

Yvonne Lim
Certified Financial Planner
Representing IFA, Financial Alliance

Original Post here:

What to do with your children Angbao Money?

The importance of having a will in singapore~

It is easy to overlook certain essential aspects of financial planning. One area that I find people procrastinating would be to set up a will + lasting power of attorney.
 
A will is a legal document that states your wishes for the distribution of your assets after your passing. While people of all ages can benefit from having a will, it holds particular importance for singles (with joint assets), parents with young children, and the elderly.
 
For Singles: Protecting Joint Assets and Ensuring Preferred Distribution 
Singles often think they don’t need a will, but this is far from the truth, especially if they share joint assets with someone else. For example, if you co-own a property with a family member or a partner, a will can help ensure that your share goes to the right beneficiary. Without a will, your assets may not be distributed according to your wishes and this can potentially cause disputes and financial stress for your loved ones. In the worst case scenario, it may leave your partner without a place.
 
For single individuals, a will allows you to pass on your assets to close friends/family members who may not be considered legal beneficiaries. It also provides the opportunity to donate to charities and support causes you care about.
 
 
For Parents with Children: Appointing Guardians and Providing Financial Security 
Parents, more than anyone else, would understand the importance of planning for their children’s future. A will would allow you to appoint testamentary guardians for your minor children, ensuring they are taken care of and living with your most trusted.
 
Additionally, a will enables you to provide financial security for your children. You can specify how your assets should be managed for their benefit, ensuring that their education and well-being are adequately funded.  
 
 
For the Elderly: Efficient Estate Planning and Minimizing Taxes
As one grows older, estate planning becomes increasingly vital. Singapore has specific laws (ISA) regarding the distribution of assets. With a will, you have more control over how your assets is divided. 
At the end of the day, Equal may not be Fair or Ideal. Imagine the case where you have an unmarried child staying with you and a married child with his/her own place of residence. Simply selling the property and splitting the proceeds may not be the best method of distribution. 
Similarly, you may not want to gift equal share to a child who is a vulnerable party or whom you are estranged from.
 
A will can also streamline the probate process, making it easier for your loved ones to access and distribute your assets after your passing. This simplifies an already emotionally challenging time for your family.
 
In conclusion, having a will is essential, regardless of your age or family situation…
Feel free to drop me a note if you require assistance with your estate planning matters. Cheers and be well!

Do you need a shield plan covering private hospital?

A recent ST article stated that More than half who buy Integrated Shield Plans (ISP) covering private healthcare opt for subsidised wards when hospitalised. I am unsurprised as I have also started to see this trend with claims in the recent years.
 
So the big question is – Is it really necessary to have an Integrated Shield Plan Covering Private Hospitals in Singapore?
 
Here are the pros and cons, so you can make an informed decision.
 
Waiting times
If you’re looking for the quickest possible treatment, then a private hospital is the way to go. Waiting times for non-emergency procedures are typically much shorter in private hospitals than in public hospitals. Also, in times of need (especially in the diagnostic stage), waiting can be daunting.
Advisor’s Take: I highly recommend a private coverage for young kids because there are more instances of non-emergency treatment required (think HFMD). Based on experience, private hospitals are more willing to admit young kids even at earlier onset of symptoms.
 
 
Doctors
Private hospitals are able to attract top talent with higher salaries and better working conditions. So there is a perception that you can find better doctors in the private space. However, whether this still holds true is a tough question to answer.
 
Facilities
Private hospitals typically have newer and more luxurious facilities than public hospitals. This includes private rooms, better food, and more amenities. The quieter/calmer environment can also make a positive difference during times of sickness – not just for the sick, but also for caregivers. 
 
Bills
All the pros of a Private Hospital translate to a higher bill size than public hospital bills. When co-payment is involved or when long term medication is needed, we would need to think twice about the choice of treatment.
Advisor’s Take: Co-payment is not too much of a concern if you also have employee benefits covering for private hospital. The insurers should be able to work hand in hand to cover the bill (including copayment) in full.
 
Premiums
And obviously, for insurers to cover the larger bills, they would have to charge a (much) higher premium.
 

In summary, whether or not it’s worth getting an IP covering private hospitals in Singapore depends on your individual circumstances & preferences. And it’s just like all other choices we make in life: Private vs Public Housing. Affordable Japanese cars vs the pricier continental cars. Mass public transportation vs Taking a taxi. Eating at the Hawker vs Fine dining. 
So my personal take is that having an integrated shield plan is a necessity, but having a shield that also covers Private Hospitals is a choice.
 
If you have the money and you’re willing to pay for the convenience and peace of mind, then a private hospital may be the right choice for you.
But if you’re on a tight budget or you’re happy with the care that you’re getting at a public hospital, then you may be able to get by without an ISP covering private hospitals.
 

Personally, I have a private ISP coverage. Simply because healthcare is something that I am willing to pay for (though hopefully never). Of course, I do keep my options open to downgrade it in my elderly years, if the need arises.

If you have any questions regarding your ISP, feel free to drop me a WhatsApp/ fill up the contact form here. Cheers.