Almost half of Singapore respondents (42%) will only start planning for retirement within five years of their planned retirement date, a survey by Sun Life Singapore revealed.
The survey collected responses from 3,500 respondents across China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Vietnam, of which 505 were from Singapore.
The survey found that 16% of Singapore retirees have not planned their retirement expenses, with 18% being caught off-guard by the higher-than-expected costs.
The key factors in the higher-than-expected costs were identified as the general cost of living (64%) and healthcare costs (43%). As a result, 57% have been forced to cut spending and 50% had to liquidate investments.
According to the survey, 14% of Singaporean retirees express regret over past financial decisions, with the top regrets being not saving enough (55%), not investing wisely (55%), and retiring early (45%).
Given that Singapore’s working population has wider access to information and financial products, the younger generation is more likely to seek help.
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Among the younger generation, 37% are consulting a financial advisor and 36% are using a retirement calculator, as compared to 34% and 32% for retirees, respectively.
Younger respondents are also more aware of the challenge in preparing for their retirement and are adjusting their expectations. Currently, workers in Singapore are anticipating retiring at an average age of 64, five years later than the average age of current retirees, who exited the workforce at 59 years old.
Christopher Albrecht, CEO at Sun Life Singapore notes that as Singaporeans navigate a "rapidly evolving" retirement landscape, it's evident that the shift towards personal financial responsibility is growing across all income levels.
“Early and strategic planning is crucial for everyone, not just to preserve wealth but to ensure long-term financial security, including the need to cater for future generations. Regardless of income, starting retirement planning earlier provides a stronger foundation for a comfortable and sustainable retirement,” Albrecht adds.
Among the high-income respondents, 40% of respondents still leave planning for retirement expenses until five years or less before retirement, while 11% do not plan for this at all.
Similarly, 15% of high-income respondents save less than 10% of their income for retirement and 15% were caught off-guard by higher-than-expected costs. They identified their primary concerns as the rising cost of living (50%) and the need to support younger family members more than expected (50%).
The key regrets for high-income retirees were not investing wisely (100%), retiring too early (67%), not saving enough (33%), and not diversifying investments (33%).
For high-income workers, their expected retirement age is 64, six years later than current high-income retirees.
“High-income individuals often face unique challenges when it comes to retirement planning. Our research highlights that whilst wealth can provide a cushion, it doesn't eliminate the need for careful planning,” Albrecht adds.
