It may take three decades for Singapore consumers to achieve financial freedom, up by nearly three years compared to the findings from a year ago, according to Singlife’s Financial Freedom Index 2024.
The respondents of the index’s second edition believe they need approximately $612,045 to be considered financially free, up 8% from $566,640 in 2023.
With lowered median yearly savings of $20,195 (around S$1,682 monthly), it could now take about 30 years to accumulate enough savings to feel financially free, compared with about 27 years previously. This could be due to inflation and cost-of-living concerns affecting consumer sentiments, the survey suggests.
On the back of the dip in sentiments towards attaining financial freedom, the average score drops to 58 out of 100, down from 60 last year.
The survey also reveals that four out of 10 Singapore consumers surveyed believe they will never achieve financial freedom. Significant roadblocks cited include insufficient income (53%), unforeseen expenses (38%), job insecurity (32%) and debt repayment burdens (28%)
Although the path to financial freedom appears longer and more daunting compared to a year ago, the latest survey offers a silver lining — 55% of respondents this year say they know how to achieve financial freedom, up from 49% last year.
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When it comes to retirement goals, four in five consumers aim to retire by 65, slightly above Singapore’s legislated retirement age of 63. Consumers expect they would need a median of $2,856 per month for daily living expenses in retirement.
Singlife notes the stark contrast between median monthly savings ($1,682) and median retirement expenses, which underscores the need for individuals to begin building up cash reserves in order to retire comfortably.
On parenthood, half of those surveyed estimate more than $500,000 is required to raise a child in Singapore from birth to 21 years of age, based on a median monthly expense of $1,918.
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Over 40% believe having a child will delay their retirement age and ability to achieve financial freedom by an average of 14 to 15 years. Consequently, 54% of consumers without children say they do not intend to have any, and 80% of those already with at least one child say they do not intend to have more.
Although most consumers have on average three types of insurance products, only 57% of them are aware of or claim to have life insurance coverage. Even fewer (38%) indicate that they have coverage for critical illness.
According to industry guidelines, consumers are recommended to have life insurance coverage of at least nine times of one’s annual income. Yet, the median coverage among the respondents, at $286,670, is less than half of the adequate level of coverage, the study reveals.
Based on the $4,922 median monthly personal income in the survey, the amount of critical illness coverage respondents have is $207,238 – 12% less than the recommended coverage of four times of one’s annual income.
While most consumers (78%) have at least three months of emergency funds, only 1 in 3 perceive that they have adequate savings or emergency funds to cushion unexpected events.
Singlife’s Financial Freedom Index 2024 survey was conducted between April and June among 3,000 Singaporeans and permanent residents aged 18 to 65.
