How wealthy S'poreans are preparing to live to 100

SINGAPORE'S millionaires need to re-think their long-term financial plans as they expect to live far beyond average life expectancies. It seems that the link between wealth and health has never been stronger.

A recent survey by UBS Investor Watch found that the majority of affluent Singaporeans believed that they could live to a 100. This compares to Singapore's average life expectancy of 83.1 years, the third-highest behind Switzerland and Japan, according to statistics from the World Health Organization (WHO).

While this sounds like good news, the extra years are raising concerns about costs, particularly spending on healthcare. This is forcing many wealthy individuals to change their assumptions about their lifestyles, spending patterns, and long-term investment and legacy plans.

Our survey of nearly 5,000 millionaires across 10 markets showed that the outlook for longevity varies by country, region and wealth level. In Singapore, 415 millionaires participated in the survey.

Almost half of Singapore's wealthy believed they would live to 100, compared to 30 per cent in the US. The wealthier an individual, the higher the expectation of living to 100.

We also discovered that high net worth individuals (HNWIs) prioritised living well over having money, and are prepared to sacrifice wealth for better health. While a large majority of those we surveyed thought they were in good health today, around three quarters were worried about their health deteriorating in the next decade.

As such, it was no surprise that healthcare costs ranks as a key concern amongst millionaires around the globe. This same trend is present in Singapore, where two-thirds of the millionaires are worried about rising medical costs.

In Singapore, a vast majority of millionaires (92 per cent) believed that investing in their health was more important than growing their wealth, similar to their counterparts in Hong Kong and Taiwan. As a result, wealthy Singaporeans plan to allocate 30 per cent of their wealth in retirement to healthcare costs. The average wealthy Singaporean is even prepared to sacrifice around a third of his wealth if it can guarantee another 10 years of healthy life.

That said, they appear to be doing a good job of living well. According to WHO, Singapore is second in the world in terms of healthy life expectancy - or the number of years people live in full health - at 73.9 years. This was only behind Japan at 74.9 years.

Many of these millionaires also believed that work was essential for their well-being. Some 85 per cent of Singapore millionaires believed being engaged in work was beneficial for their health, while 68 per cent were working beyond the traditional retirement age, or planned to do so.

But many also thought that working too much could backfire, and be detrimental to their health. In this regard, more Asian investors are trying to strike a better work-life balance by taking weekends off, respecting holiday time, and turning off phones and e-mail more often.

Interestingly, many wealthy Singaporeans are keeping healthy not just for their own benefit. Some 87 per cent of the Singaporean millionaires we surveyed said they felt a sense of duty to help less fortunate members of society stay healthy - 65 per cent had invested in an area of health in order to generate a positive social impact, a higher level than in any other market surveyed.

Living to 100 also means reassessing one's investment and retirement plans. Investors who expect to live longer are the most likely to make financial changes.

It is heartening to note that almost 80 per cent of Singaporeans surveyed already had a financial plan in place, and were adjusting their investment portfolios in preparation for a longer lifespan.

We recommend that investors start wealth planning early, and ensure that they have a well-diversified investment portfolio.

In Singapore, some 45 per cent are already planning to adjust their long-term financial plans, while 46 per cent are tweaking their spending patterns. In addition, 41 per cent have or will make more long-term investment decisions, with equities, bonds and real estate seen as strong places to invest long-term.

Living to an advanced age is even impacting the way wealthy investors plan their legacy, as they kick-start this process earlier. Just over half of Singaporeans surveyed planned to give away more while they're alive.

In terms of investments, Singapore's HNWIs unsurprisingly picked healthcare as their top choice for long-term investments. Asset classes such as equities and real estate were also favoured, as was cash, which was picked by 40 per cent of respondents.

The world's wealthy are likely to be the biggest beneficiaries of the trend of longer lifespans. To deal with this new reality, many have to start planning early to ensure that they can maintain the quality of their lifestyles as they age. The good news is, many have already started on this.