Three in five or 61% of Singaporeans aged between 25 and 34 are confident of having enough funds to support themselves and their family during retirement.
This optimism comes as millennials are diversifying their savings across multiple financial instruments such as fixed deposits, life insurance, health insurance, real estate and other investment products.
In fact, millennials are more tolerant of risk in their financial strategies than their older peers, with 72% saying they will need more investments to ensure their savings will be adequate to last for their lifetime. In contrast, 58% of individuals aged between 55 and 65 felt this way.
It is no surprise then that only 47% for those between the ages of 35 and 44, and 49% for those between 45 and 54 years old feel they have enough funds for retirement.
Meanwhile Singaporeans aged between 55 and 65 were the most confident with 67% noting they have enough savings to support living till they pass on presumably, as they near Singapore’s statutory retirement age.
These were some of the results highlighted in the recent “Saving for 100: Funding longevity in a time of uncertainty” report produced by The Economist Intelligence Unit and commissioned by Prudential Singapore. The results are based on the saving and investing attitudes reflected by the 1,200 Singaporeans surveyed.
Dennis Tan, CEO of Prudential Singapore, is heartened by these findings.
“We know that while Singaporeans are ardent savers, many will struggle to retire at 62 with enough savings to last another 30 to 40 years. It is important to start financial planning earlier in life so you have a longer runway to build your retirement nest egg, and can be better prepared to weather economic uncertainties and disruptions, such as the Covid-19 pandemic”.
A major push for these individuals comes from having adequate costs to fund possible ailments, especially in an era of medical inflation and exorbitant healthcare costs.
Still, as prepared as they may be, millennials acknowledge that their savings may also be needed to support their ageing parents, children and eventually grandchildren.
Nearly nine in 10 or 89% polled noted that they foresee themselves caring for their parents’ needs while 71% said they were looking to provide for their children and grandchildren.
Conversely, only 30% expect their children to provide for them in their old age. This is not a surprising response as the strawberry generation moves towards being child-free or having fewer children.
Meanwhile, respondents also noted that they were saving to fulfill personal aspirations such as taking a career break for travel, study, skills training and caring for a family member.
Speaking at a panel discussion at the launch of the report, Dawn Cher, a financial blogger who goes by the name Budget Babe noted that more people – particularly millennials – have been taking career breaks.
“People want the flexibility to take a career break and having the financial ability to do so is a huge decisive factor,” she noted.
Fellow panelist, Abel Lim executive director and head of wealth management advisory, personal financial services at UOB agrees. He, along with Prudential’s Tan reckons that society should do away with viewing life in the traditional three-stages of study, work and retirement.
Instead, they recommend a multi-stage life where individuals can have three or more occupations that are interspersed with career breaks.
These breaks will allow employees to upskill – to remain relevant to the workforce, say Tan and Lim.
“This begs the question: can millennials have it all? Can they take care of their family, fulfil their passion, have some fun, and at the same time, save enough to be financially independent at old age? Good financial planning is of course key. But investing in health, skills [and family] is just as important to ensure one can be better prepared for longevity," stressed Tan.
