Almost half are unaware of how much income they'll need to sustain the lifestyle that they want
Nearly half (46%) of Singaporeans expect their family to care for them in retirement, based on a new study.
The survey also revealed that almost half (48%) of respondents forecast they will not have enough money saved to sustain the lifestyle they want in retirement.
About 13% believe they will need to work past retirement age owing to a lack of savings, with two-thirds (66%) concerned about being a financial burden to those closest to them.
More than two-in-five (42%) are unaware of how much income they’ll need in retirement to enjoy the lifestyle they aspire to lead, according to St. James’s Place Wealth Management Asia (SJP Asia).
The median expectation among respondents was a monthly income of $3,501 to S$5,000, with over half (51%) believing they would need more than S$5,000 per month in their retirement.
Some of their concerns include having a lack of understanding around tax matters and having to make lifestyle sacrifices that all contribute to making retirement planning difficult, with over half (57%) saying that it was a significant source of stress in their lives.
However stressful, a lack of financial preparation earlier in their lives can lead to more serious consequences nearer to their retirement – less than half (44%) of respondents have discussed retirement with their family members.
Considering forecasted savings shortages, many respondents are prepared to make sacrifices in their twilight years to accommodate their retirement plans. This includes:
- reducing spend on lifestyle services, luxury goods and travel
- downsizing their home
- reducing spending on family members
Interestingly, more than half (56%) of those who don’t believe that they will have enough money saved for retirement are between the ages of 25 to 40. However, these are respondents with a longer time horizon and more earnings potential, which means they can do more to improve their financial situation over time.
A third of those surveyed said they plan to retire outside of Singapore, with Malaysia (25%), Australia (15%) and Thailand (13%) being the most popular destinations.
When asked why, 57% cited Singapore’s high cost of living. However, respondents were also motivated by positive factors including a desire for a change in scenery (43%) and better perceived benefits for seniors elsewhere (36%).
“One of the greatest assets that the younger generation has on its side when either investing or saving for the future, is time,” said Gary Harvey, CEO at SJP Singapore. “However, as COVID-19 has demonstrated, potential crises are never far away.
“It is important that people prepare for the unexpected and adopt good habits. By doing this, they can help to mitigate the impact of short-term financial headwinds and reap the full benefits over time.”