SINGAPORE — About 46 per cent of Singaporeans expect their families to care for them in retirement amid declining birth rates and an ageing population, according to a survey by a wealth management firm.
The survey by St. James’s Place Wealth Management Asia (SJP Asia) also showed that 48 per cent of respondents forecast they would not have enough money to sustain the lifestyle they want in retirement.
Given their concerns over lack of savings, one in eight believe they have to work past retirement age, with two-thirds worried about being a financial burden to those closest to them, SJP Asia said in a statement on Wednesday (21 May).
More than half of the respondents who do not believe they could save enough for retirement are between the ages of 25 and 40.
Hence, it is not surprising that retirement planning causes significant stress for about 57 per cent of the respondents.
When it comes to an amount for retirement, the median expectation for the respondents’ monthly income was S$3,501 to S$5,000, with 51 per cent believing they would need more than S$5,000 per month. About 42 per cent of them are unaware of the level of retirement income that can sustain their aspired lifestyle.
A minority of the respondents are prepared to scale back their expectations in retirement. About 23 per cent are ready to cut spending on lifestyle services, luxury goods and travel, as well as downsizing their homes, while 27 per cent are prepared to reduce spending on family members.
A total of 1,045 respondents between 25 and 54 from households in Singapore with a minimum annual income of S$70,000 to over S$250,000 took part in the survey conducted in February and March. They held personal investments in stocks, property, shares and funds.
The survey findings highlight the growing challenges that Singaporean families face as they age and underscore the importance of financial planning for millennials, SJP Asia said.
“One of the greatest assets that the younger generation has on its side when either investing or saving for the future, is time. However, as Covid-19 has demonstrated, potential crises are never far away. It is important that people prepare for the unexpected and adopt good habits in starting financial planning early,” said Gary Harvey, CEO of SJP Singapore.
Almost a third of those surveyed say they plan to retire abroad, with Malaysia, Australia and Thailand being the most popular destinations. They were motivated by factors including cost of living, desire for a change in scenery, and better perceived benefits for seniors elsewhere.
The survey also covered questions about financial planning measures.
About 84 per cent of respondents have life insurance, with the majority of those without such a policy being under the age of 40.
Only 38 per cent have made a will while 60 per cent have not made plans to transfer wealth and assets to their families. Over a third of respondents plan to donate a part of their wealth or estate to a philanthropic cause.
A lack of a will or inadequate estate planning can have serious financial and legal impact on many families in Singapore, in addition to potential family discord, according to SJP Singapore.
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