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Average Singaporean saves 9 years more for retirement than predecessor did, says report
THE average Singaporean starts saving for retirement at 32 and continues for another 29 years, nine more years than their predecessors who saved an average of 20 years and started later at age 39.
This was one of the key findings in HSBC's Future of Retirement: Generations and Journeys report, which sought the views of more than 18,000 people in 17 countries, including 1,008 Singaporeans who are either working or retired.
Despite the longer and earlier period of saving, 41 per cent of the Singaporeans of current working age wish that they had started to save earlier while 38 per cent have stopped saving due to various difficulties, the report found.
Said Matthew Colebrook, head of retail banking and wealth management, HSBC Bank (Singapore): "The unfortunate causality of a rising cost of living is that people nowadays are having to save further and for longer than their predecessors. Unfortunately in many instances, life events are also getting in the way from setting aside money earlier or in a consistent manner."
He added that the report released on Wednesday reveals a degree of tunnel-vision among Singaporeans with cash savings and property being the key investments of choice - often at the exclusion of almost any other asset class.
"But all asset classes' performance will rise and fall as the current softening of the Singapore property market and low deposit rate environment show us. This speaks volumes for why it is important to seek diversification in a savings plan," said Mr Colebrook.
Of the Singaporeans polled, the majority use cash savings, supplemented by day-to-day salary and a property downsize to fund their retirement.
Of the working age Singaporeans, 60 per cent expect to draw on cash savings to fund their retirement.
A further 40 per cent highlighted that they will continue to work, with 12 per cent saying that they rely on state pension schemes.
The report also finds that 21 per cent of Singaporeans (compared to the global average of 6 per cent) expect to downsize or sell a property to help them to fund their retirement.
HSBC said that the lack of information on retirement may potentially be one of the reasons that working-age Singaporeans have not started planning for their retirement.
More than a quarter of pre-retirees surveyed in Singapore say they have never received advice or information about retirement.
Findings also show that 23 per cent of pre-retirees have not started saving (on par with global average of 24 per cent), including 10 per cent who are aged 60 or over.
"While Singaporeans are savvy savers in general, they may not have the relevant knowledge to help them start saving or consider investment options in order to sustain the lifestyle they had before retirement. Getting professional help in setting a financial plan early will allow you to reap the fruits of your labour and fulfil retirement aspirations without compromising or changing your lifestyle," said Mr Colebrook.