Contrary to their expectations, Singapore’s up-and-comers may not be able to retire with as much money in the bank as they’d hoped.
In fact, 73% of these professionals, identified as Emerging Affluent (EA) individuals in a survey by DBS, said they plan to retire between 55-65 years of age with an average savings of $571,715. Even more – over 85% – expect to live on a retirement income of $3,500 per month for the next 15 to 20 years, or more.
Plus, most EAs expect CPF, cash savings, insurance, investment and annuity plans to be their key sources of retirement income.
But the survey found the average EA’s retirement fund will actually only last them 13 years, falling short of their average life expectancy in Singapore. Plus, while 76% said their retirement fund is a priority, only 49% have some sort of financial plan for this in place.
An EA is identified in the survey as an adult living in Singapore aged 18-29 with personal monthly income over $2,500, or an adult living in Singapore aged 30-59 with personal monthly income over $5,000.
The main reason the survey identified as the reason why people put off retirement planning is that it is “complicated”, and other financial priorities – such as housing or children’s education – becomes a priority.
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Of those who do invest in retirement planning, the “established” respondents (aged 35-49, single and working) allocate 51% of their income towards savings and investments. At the other end of the scale the “family focused” EA’s (aged 25-62, married, working or not working) put aside 43%.
“Climbers” (aged 18-34, single, working) allocate 44% of their income to savings and investment, but are least likely to set this aside for retirement.