SINGAPORE (May 22): Almost half of Singaporeans are expecting for their family to care for them in retirement, according to the findings of a survey conducted by St. James’ Place Wealth Management Asia (SJP Asia).
Of the 1,045 respondents, 48% of them predict that they will not have enough money saved to sustain the lifestyle they want in retirement.
Beyond retirement woes, the findings also show the growing challenges Singaporean families face as they age. The findings also underscore the importance of robust financial planning for millennials, the first generation that will reportedly earn less than their parents.
The survey also found that 13% of respondents feel the need to continue working past the retirement age as they might not have enough savings, while 66% are afraid of being a financial burden to those closest to them.
A concerning 42% of respondents are unaware of how much income they will need to enjoy the lifestyle they want to lead upon retirement. About 20% of respondents believe a monthly income of $3,501 – $5,000 will suffice, while some 51% feel they would need more than $5,000 per month in their retirement.
Some of the respondents’ surveyed feel a lack of understanding around tax matters and having to make lifestyle sacrifices contribute to making planning for their retirement difficult. About 57% of them say that it is 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 (or 44%) of respondents have discussed retirement with their family members.
Of those surveyed, 32% plan to retire outside of Singapore, with Malaysia (25%), Australia (15%) and Thailand (13%), being the most popular destinations. When asked why, about 57% attributed their decision to the high cost of living in Singapore.
Interestingly, some 56% of those who do not 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.
The report also finds that life insurance uptake is very high at 84%, but only 38% have made a will. This was more concerning when examining the breakdown of the respondents by age. While it is understandable that 58% of respondents that do not have a will are under the age of 40, the majority (72%) of those who do not have life insurance are under the age of 40.
When looking at generational wealth transfer, some worrying trends were revealed. Three-in-five respondents (60%) have not made plans to transfer wealth and assets to their family and only two out of five respondents (40%) intend to do so over the next five to ten years.
Gary Harvey, CEO of SJP Singapore says, “One of the greatest assets that the younger generation has on its side when either investing or saving for the future, is time. 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 in starting financial planning early. By doing this, they can help to mitigate the impact of short-term financial headwinds and reap the full benefits over time.”
“Generational wealth planning is one of the most important but often under-looked aspects of personal financial management today. We urge Singaporeans to strongly consider the impact that a lack of planning may have, not just on their financial independence in their future lives, but also on their families and loved ones,” Harvey adds.
