Almost 60% of Singapore investors have neglected to plan for their retirements: Survey

SINGAPORE: A recent study by Fidelity International has uncovered a significant gap in retirement planning among Singapore investors, despite their active involvement in various investment areas.

According to the findings, only 41% of Singapore investors have started planning for retirement, leaving the majority without a solid financial strategy for their later years.

The study shows that retirement planning becomes more prevalent with age, with 64% of investors aged 45 to 69 having begun their retirement planning journey.

However, younger investors are increasingly recognizing the importance of early planning. The data reveals that 19% of investors under the age of 30 have already initiated their retirement plans, while 27% are seriously considering starting soon.

Despite growing awareness, over a quarter (27%) of Singapore investors admit to having only a basic understanding of what retirement planning entails. This lack of knowledge contributes to widespread concerns about financial security during retirement.

On average, Singapore investors anticipate needing approximately $5,300 monthly in retirement, which amounts to about 68% of their current monthly income. However, many are worried they might fall short of their financial goals due to various challenges.

Notably, 57% of investors express concern about potential investment losses, 54% fear being forced into early retirement, and 34% cite income shortfalls caused by time taken off work for family responsibilities or maternity leave.

To address these concerns, investors plan to take practical steps to secure their financial future. 44% of respondents indicate they will reduce expenses during retirement, while an equal percentage intends to continue investing throughout their retirement years.

In terms of post-retirement investment strategies, fixed deposits remain the most popular choice among investors, with 47% planning to allocate their money into these low-risk products. Stocks (46%) and bonds (45%) also feature prominently in retirement portfolios. The top reason for choosing fixed deposits is the guarantee of returns (26%), followed by attractive interest rates (19%) and a preference for safe financial products (16%).

Interestingly, among investors with fixed deposits maturing this year, the majority (63%) plan to reinvest in another fixed deposit, while stocks (33%) and bonds (26%) remain the next most popular options.

TISG/