SINGAPORE: The generational divide is evident in many aspects of life, including how financial success is defined.
While Boomers (born 1946-1964) see younger generations’ expectations as sometimes unrealistic, Gen Z (born 1997-2012) aims for much higher incomes than older generations, driven by rising costs and changing priorities.
But how much is truly needed to live comfortably in Singapore today?
In a YouTube video posted in January 2023, National University of Singapore (NUS) students were interviewed about their expected salaries. When asked how much they expect to earn when they start working, their answers ranged from S$5,000 to S$10,000.
In a November report this year, a poll from answers.sg, which surveyed 5,185 people, asked what they think is a liveable monthly salary in Singapore in 2024.
Nearly three in 10 (28%) responded with S$9,000 per month, while 34% chose between S$3,000 and S$3,999 as a liveable salary.
According to SmartWealth’s December 2024 report, Singapore’s average median income (inclusive of employer CPF contributions) is S$5,197 per month (S$62,364 per year). Without employer CPF contributions, the median income is S$4,550 per month (S$54,600 per year).
The report also found that the median salary is S$1,580 for the 15 to 19 age group, S$3,042 for ages 20 to 24, and S$4,680 for ages 25 to 29, where Gen Z (ages 12-27) belong.
Boomers (ages 59 to 78), on the other hand, have a median salary of S$4,351 for ages 55-60, while those 60 and over earn S$2,905 per month. While the salary gap between Gen Z and Boomers isn’t that wide, their spending habits and priorities are.
Changing priorities and rising costs
Traditionally, saving revolved around significant life events such as retirement, property ownership, and long-term goals. Younger generations, however, focus on “soft saving,” prioritising mental health, personal development, and “making the most of the present.”
At the same time, rising prices have made it harder for younger generations to save long-term.
Etiqa Insurance Singapore’s Retirement Insights Report 2024, which surveyed 1,009 individuals across generations, found that younger Singaporeans are worried about living costs, job stability, and insufficient savings. Many also find financial planning overwhelming.
Data from the Department of Statistics Singapore on the Household Expenditure Survey 2023, released Nov 28 this year, showed that between 2017/18 and 2023, average monthly household expenditure rose from S$5,163 to S$5,931—a 2.8% annual increase.
Over the same period, household incomes grew by 4.1% annually, from S$12,661 to S$15,473.
While household incomes grew and Singapore’s public housing was considered the most attainable in Asia-Pacific, according to an Urban Land Institute report, median private home prices hit S$1.75 million in 2023, topping the list and surpassing Hong Kong.
Salary growth
Salary increases in Singapore are also expected to see the least growth compared with its neighbouring Southeast Asian countries, according to professional services firm Aon.
Numbeo estimates monthly costs for a family of four in Singapore (without rent) are S$5,386.1, while a single person’s costs are S$1,491.4 (without rent).
Given that these figures exclude rent, which is typically the highest expense for Singaporeans, the results of answers.sg’s poll, where 34% of respondents said a salary between S$3,000 and S$3,999 is liveable, may be true, but it might not be sustainable in the long run, especially for those living alone without anyone to share the rent.
This may explain why 25% of Singaporeans have not started retirement planning, with common reasons being immediate financial concerns (38%), reliance on CPF savings (34%), and insufficient savings (30%).
Meanwhile, 63% of seniors remain most concerned about healthcare expenses.
While financial comfort is subjective, even frugal Singaporeans, boomers, and Gen Zs alike are finding it harder to navigate rising costs and costly priorities.
For younger generations, focusing on ways to increase income and managing finances wisely will remain crucial in achieving long-term financial stability. /TISG
Featured image by Depositphotos (for illustration purposes only)