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Most working adults not financially ready for retirement
THE majority of working adults in Singapore are financially unprepared for retirement, with one in three saying that they do not invest and see investing as a form of gambling.
In particular, half of those among the sandwiched generation - people who are supporting both ageing parents and their own children at the same time - struggle to cope, with significantly greater worries about their financial status compared to the average Singaporean.
These are some of the key takeaways from OCBC's inaugural Financial Wellness Index survey, which polled 2,000 working adults in Singapore between the ages of 21 to 65 for the state of their financial health.
Overall, Singapore received a score of 63 out of 100, indicating that Singaporeans have started taking care of their financial health, but are still behind on most indicators.
There are 26 indicators altogether, which include factors such as regular rate of savings, investments, financial retirement planning and having enough funds in times of crisis.
The study found that most Singaporeans have good basic financial habits; they save an average of 26 per cent of their salary, with 82 per cent who proactively got insurance coverage.
But they fared more poorly when it came to growing their wealth through investments. About a third do not invest and think of investing as a form of gambling, while almost half have no passive income. Passive income refers to income from rental, dividends, interest income, royalties, payout from annuities and so on.
Among the two-thirds who do invest, more than a quarter speculate excessively for quick gains (27 per cent).
Most are neither equipped for financial emergencies nor well-prepared for retirement. Only about half have enough savings to last six months, while almost three-quarters are not on track with their retirement plans. Some 65 per cent said they are not accumulating enough funds to maintain their lifestyle after retirement.
In particular, the sandwiched generation was found to have more financial worries compared to the rest, with half of them finding it tough to support both their parents and children at the same time. Out of the half who find it difficult, some 63 per cent are concerned that they are not able to spend comfortably beyond the basics, compared to the Singapore average of 51 per cent.
About half of those who find it hard-going say they do not know the best way to grow their money, compared to the average of 37 per cent.
The survey also found contrasts in how different categories fared in their financial health, notably in terms of marital status, gender and age.
Women were found to be more averse to investing, with 39 per cent of them having no investments compared to 31 per cent of men. Similarly, those who were married also tended to invest and make financial plans compared to singles.
In terms of age, it was revealed that young people save more conscientiously and stick to their budget more than other age groups, but are far less savvy about how to grow their wealth.
Interestingly, respondents' ideal retirement age went up with age. Among those in the 20s age group, the average age that they want to retire is 56. In contrast, people who are 55 and older wish to retire at 67.
According to Koh Ching Ching, OCBC's head of group brand & communications, the financial wellness survey is a first in Singapore in terms of comprehensiveness of scope.
Going forward, the survey is expected to be conducted annually, with eventual plans to roll it out across OCBC's markets, she said.
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