Found this sub too late. Am stuck in Manulife SRS

As the title mentions I didn't do my due diligence and agreed to use my SRS contributions to the Manulife Readybuilder fund. At that point I wasn't aware that we could use our SRS for any ETFs. Hindsight 20/20 and all that, I should have just put it into DBS stocks at the time. Now I've checked out the policies and they are as follows: Manulife READYBUILDER (II) - SINGLE PAY (SRS) $43,500 08 Mar 2024 Net Surrender Value: $ 32,192.18 READYBUILDER (II) - SINGLE PAY (SRS) $16,700.00 21 Jan 2025 Net Surrender Value: $ 12,358.84 I think I should just bite the bullet, surrender both and then reinvest thru POEMS to Amundi and get a better return over the long run. Just wanted to see if my logic and math were correct.

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u/moonlight2099 1 1 day ago

How long more to breakeven? This might affect your decision to cancel the policy.
u/waruta OP 1 1 day ago

Breakeven is around 6 years and 7 years respectively for the two plans
u/DuePomegranate 1 1 day ago

Is this breakeven the guaranteed plus non-guaranteed returns, or purely the guaranteed?
u/Sunriseovermist 1 1 day ago

It depends on what your objective for investing the SRS is. Readybuilder is a participating plan so returns are dependent on the par fund performance and smoothening of bonus. It seems to generate close to 4%pa return if you hold for long enough https://dollarbureau.com/blog/manulife-re… so you can probably treat it as the bond component of your portfolio and divert future SRS funds to ETF?
u/waruta OP 1 1 day ago

Appreciate the insight. I think I might just do that as the breakeven surrender is still 6/7 years away.
u/laverania 1 1 day ago

Assuming you surrender now and invest the money without adding more money (since they are single pay policy, for apple to apple comparison) To turn $32192 to $43500, the breakeven time required is: - 4.5 years (7% pa return) - 5 years (6% pa return) - 6 years (5% pa return) Similar timeline for the other amount ($12358 to $16700). You can judge whether you want to surrender and DIY based on the expected return and timeline.
u/DuePomegranate 1 1 day ago

Where's the math for us to check? We don't know what configuration you chose, when they mature, how many years before you hit SRS withdrawal age and all that. I only note that 1) this is not ILP, 2) it's endowment plan with guaranteed and non-guaranteed payouts, 3) it's based on the participating fund i.e. mostly bonds and lower risk lower reward, 4) the surrender fee is not that evil. Basically, I would expect that the surrender fee would capture most or all of the future fees they would extract from you if you were to stay with them. These are single premium policies, so the good thing is, you can leave these alone and then just do something else with your future SRS contributions.
u/Comprehensive_Ad2417 1 1 day ago

Frankly, there are no strong incentives or reasons to sell now and lose money straight away. The amount is not a lot. Just keep them.
u/Ceyenne18 1 1 day ago

Keep. Surrendering now to solidify a real loss is just silly as it is an endowment that is capital guaranteed with some guaranteed payout. Please don't compare with DBS or other equities. Just because they had a good rally doesn't mean they won't crash tomorrow.