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Are you saving enough to retire?

SINGAPORE (Dec 19): Not saving enough to retire? You're not alone in believing so.

Some 18% of investors in Singapore feel that they don’t have enough money saved up to retire, according to the Global Investor Study 2019 published by global investment manager Schroders.

Even then, this is better than the global average, where 24% of people are concerned that they are not saving enough ahead of retiring.

The study also revealed that baby-boomers are least comfortable with the amount they are saving for retirement.

The study – which surveyed over 25,000 investors across 32 locations around the world – found that about 29% of non-retired baby-boomers in Singapore were significantly more apprehensive about the amount they are saving for retirement when compared with 16% of millennials.


Despite these misgivings, Singaporean investors believe that they can withdraw 10.1% out of their total retirement savings each year and not run out of money. This indicates that a mismatch exists between people’s current retirement provisions and what they are expecting to spend in retirement.

On a global scale, people expect to draw 10.3% on average yearly out of their retirement savings and not run out of money. But according to the study, this withdrawal rate could deplete a retiree’s savings in about a decade. This could be because many people are underestimating their own lifespans or they may be more bullish about the amounts they plan to withdraw because they have other sources of income or wealth to rely on.

Sangita Chawla, Schroders’ Head of Retirement Savings says, “Singapore has the mandatory Central Provident Fund (CPF) scheme, which is a good foundation but may not be sufficient for most individuals, especially if they have invested most of their CPF savings in their property. Our study found that in order to sustain their retirement lifestyle, non-retired investors in Singapore expect to top up an average of $1,600 per month, while retired investors expect to top up an average of $1,100 per month. This is in addition to their CPF payouts.”

“This disconnect is worrying and implies that people globally are not being realistic about the lifestyle they want to enjoy when retired. People are living increasingly longer in retirement and should be able to enjoy their lives after work, safe in the knowledge that their retirement savings will sustain them. However, this study suggests this may not be the case for many,” adds Chawla.

Although local investors may be worried about their retirement savings, non-retired investors are currently saving about 18% of their salary for retirement – well ahead of their counterparts in Asia (15.9%).

Encouragingly, 96% of non-retired people in Singapore think there are factors that would convince them to save more for retirement. A majority 41% said that more information about their likely living costs in retirement would be a driver that could convince them to save more for retirement.

Moreover, when it comes to their risk appetite, Singapore investors (35%) were more inclined to take greater risk with their personal savings rather than their retirement savings. This was aligned with the global and Asia trend (34% and 36% respectively). Younger generations (39% of millennials and 35% of Generation X, compared to 23% of baby-boomers) take on more risk with their personal savings than retirement savings.

“It is imperative people start saving consistently and sufficiently as early as possible when working and, before retiring, do some serious thinking about the level of income they can afford to sustain throughout their well-earned retirements. This is certainly a subject they can and should discuss with their financial advisers if they want professional advice,” says Chawla.