Are Singaporeans saving enough for retirement?

One of HSBC’s series of independent global studies into The Future of Retirement. 

A new reality is its eighth report and highlights the real challenges in planning for and achieving the retirement you want. It explores what people are looking forward to from their retirement, what is stopping them from reaching their aspirations and how planning can help to achieve greater retirement wealth.

The Singapore country report, based on the views of over 1,000 respondents in Singapore, highlights the main findings into what people are looking forward to from their retirement and how they are expecting to pay for these aspirations.

The Future of Retirement series released this year, is based on a survey of more than 15,000 people in 15 countries in July and August 2012. Since The Future of Retirement programme began in 2005, more than 125,000 people have been surveyed.

Key findings

·   Over half of Singapore respondents feel their financial preparations for a comfortable retirement are inadequate: 44% feel their preparations are not enough, whilst 12% are not preparing at all.

·   People run the risk of living long beyond their retirement savings: on average, Singapore respondents expect their retirement to last for seventeen years, but their retirement savings to last for just nine years.

·   Cash savings are an important source of retirement funding in Singapore: 69% expect to use this source, and on average, cash savings is expected to represent 34% of retirement income.

·   Respondents understand the importance of preparing for retirement from early on in life: on average, they see the age of 34 as the latest by which people can start planning financially and still expect to maintain their standard of living in retirement.

·   When asked to choose between saving for the short term goal of a holiday and for the longer term goal of retirement, over half (54%) of Singapore respondents chose to save for retirement while only 40% chose a holiday, showing they are more focused on the long term than the global average.

·   Fear is an important incentive to saving in Singapore: 61% are motivated to save towards retirement by the fear of not having enough money to live on in later life. Similarly, 54% of those planning for retirement were prompted by the desire for a good standard of living in later life.

·   In Singapore, there is a strong relationship between financial planning and saving more, with nearly half of respondents (45%) saying financial planning led to increased saving for retirement, and only 31% saying they did not save more.

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