SINGAPORE: A new report by Sun Life Singapore has revealed that many Singaporeans are inadequately prepared for retirement, with nearly half starting their planning too late. Despite retirement savings being a top priority for many in the coming year, a concerning 42% of Singaporeans begin planning just five years or less before retirement, while 15% do not plan at all.
The report highlights that while most Singaporeans save at least 10% of their income for retirement, a significant portion, 29%, do not save anything. This lack of preparation is exacerbated by an over-reliance on cash savings, which account for 32% of retirement funding. Many individuals miss out on maximizing returns by not investing in options that keep pace with inflation.
Another worrying trend noted in the report is that younger generations in Singapore, who are currently in the workforce, aim to retire at the age of 64, five years later than the current average retirement age of 59. This delay in retirement is also reflected in the 18% of non-retirees who have postponed their retirement plans, compared to just 11% of current retirees.
The primary reasons for postponement include the need to save more (60%), covering living expenses (56%), and managing healthcare costs (37%).
The report sheds light on the challenges faced by those unprepared for retirement, as well. The rising cost of living (64%) and healthcare expenses (43%) are the biggest hurdles. Many retirees have been forced to adjust by cutting spending (57%) and liquidating income-generating investments (50%).
Additionally, 14% of retirees expressed regret over past financial decisions, with the most common regrets being not saving enough (55%), not investing wisely (55%), and retiring too early (45%).
Sun Life Singapore gathered responses from 3,500 individuals across various countries, including mainland China, Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. The report highlights the need for more proactive and strategic retirement planning in Singapore, especially in light of rising living and healthcare costs.
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