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'Sizeable' gap between Singapore wealth aspirations and reality: StanChart study

FOR Singapore's wealthy, it seems that too much may never be enough.

Emerging affluent, affluent and high net worth individuals (HNWIs) in the Republic are projected to survive on an average monthly sum of US$6,666 each month after retirement, falling short of their average wealth aspiration of US$13,611, according to Standard Chartered’s new Wealth Expectancy Report 2019 released on Thursday.

In comparison, the nominal median income of Singapore residents on full-time employment stands at S$4,563, according to a Nov 28 report released by Singapore's Ministry of Manpower.

Only about half of Singapore respondents have crossed the halfway mark in reaching their wealth aspirations, but this still beats the global average of 44 per cent, the StanChart study found.

The report examines the saving and investment habits of 10,000 savers - the emerging affluent, affluent and HNWIs - across 10 markets, including China, Hong Kong, and Malaysia. Of these respondents, 976 were from Singapore.

The study defined the emerging affluent as those with a monthly income of US$3,692-7,850, the affluent as those bringing home US$7,851 and above, and the HNWIs as those with US$1 million or more in assets under management.

The average monthly sum of US$6,666 that the wealthy can expect each month after retirement is derived from the average wealth expectancy of US$2.4 million and a projected life expectancy of 91 years.

Wealth expectancy is calculated as the wealth that individuals expect to accumulate by the time they are 60 years old, assumed as the age at which they reach their highest point of affluence, but does not include state pension provisions such as the Central Provident Fund.

The financial goals of the three segments of respondents also differ. For Singapore's emerging affluent, saving for retirement was the top priority for 42 per cent of them, roughly double the affluent (23 per cent) and HNWIs (21 per cent).

The affluent ranked their children’s education as their top priority (31 per cent) while the HNWIs ranked investing in property (29 per cent) as their top financial goal.

For Singapore respondents, savings accounts, property investment and fixed deposit accounts were their top three financial tools of choice to achieve their wealth goals.

According to the report, the affluent (40 per cent) and HNWIs (38 per cent) in the Republic are more likely to use digital investment tools and online investment portfolios, compared with 24 per cent from the emerging affluent.

Among the 10 markets surveyed, Singapore’s emerging affluent are the least likely to use real estate investment trusts (23 per cent) to grow their wealth and the second most likely to focus on savings accounts (73 per cent).

Dwaipayan Sadhu, head of retail banking Singapore at StanChart, noted: “It is not easy, even for the affluent, to plan and achieve one’s retirement goals.”

For individuals to reach their financial goals, he suggested that they start by developing a better understanding of their retirement aspirations, risk appetite, and the market outlook.