Saving too much for rainy day can dampen retirement

At an estimated annual inflation rate of 2.5%, S$50,000 saved in banks over 20 years would lag inflation by 35%; investors should focus on a diversified mix of financial solutions

Published Mon, Jul 19, 2021 · 05:50 AM

Singapore banks

Singapore

THE oft-repeated piece of advice handed down for generations is to save for a rainy day. While no one is disputing the importance of having emergency funds, the question is - just how much is enough? And is there such a thing as too much?

Bankers told The Business Times that either extremes are concerning, with excess amounts of savings potentially resulting in a delay in retirement.

The general guideline stands at about six months' worth of expenses in case of unexpected expenses or job loss.

Evy Wee, DBS…