SINGAPORE: A recent survey conducted by Etiqa Insurance Singapore has revealed that 25% of Singaporeans have not yet started planning for their retirement. The 2024 Retirement Insights Report sheds light on various trends and attitudes towards retirement, especially among younger generations, such as millennials and Gen Z.
The survey shows that 71% of millennials and Gen Z expect to retire by age 60, with many projecting their monthly retirement expenditure to be less than $6,000. Specifically, 57% of millennials and 74% of Gen Z are forecasting this spending limit.
Despite this optimism, experts have raised concerns that many may underestimate the costs of sustaining their desired lifestyles in retirement.
Raymond Ong, CEO of Etiqa Insurance Singapore, commented on the findings, saying, “While it is heartening to see more Singaporeans take proactive steps towards preparing for retirement, many still underestimate the time horizon and funds needed to sustain their desired lifestyle. This could lead to a potential retirement gap.”
The report highlights that 75% of millennials and 69% of Gen Z are confident in achieving their retirement goals.
However, the financial strategies of younger Singaporeans lean towards low-risk options. Gen Z and millennials primarily rely on savings accounts (61% and 65% respectively), CPF contributions (56% for Gen Z and 54% for millennials), and fixed deposits or savings bonds (44% for Gen Z and 52% for millennials).
Experts are encouraging younger Singaporeans to rethink their approach to retirement planning. Given today’s volatile economic environment, there is an increased emphasis on maximizing investment returns and leveraging the power of compounding to grow their retirement funds over time.
Notably, the desire to provide for future generations is significant among younger Singaporeans. The report found that 78% of millennials and 68% of Gen Z prioritize wealth transfer as part of their financial goals.
The report also revealed broader trends across all age groups in Singapore.
Approximately eight in ten Singaporeans plan to retire between the ages of 50 and 70. Moreover, 75% of Singaporeans have prioritized planning for retirement, with the average person starting at age 35.
However, a significant portion of the population has not yet started this process, with common reasons being immediate financial concerns (38%), reliance on CPF savings (34%), and insufficient savings (30%).
Investments are also becoming a key element in retirement planning for many, with 41% of Singaporeans considering them an essential strategy.
However, a third of investors lack confidence in their approach, citing fears of losing money (57%), lack of financial knowledge (53%), and the risks involved (45%).
Healthcare expenses remain a central concern for many, particularly seniors (63%) and Gen X (51%), who are increasingly aware of the financial burdens associated with ageing.
Additionally, insurance is gaining importance in retirement planning, with about 38% of Singaporeans prioritizing coverage for their later years.