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How Much Do You Need to Feel Financially Free?

Alevin Chan

Alevin Chan

Last updated 23 August, 2023

With rising inflation and continued cost-of-living pressure, at what point do Singaporeans start feeling financially free? A recent study may help you derive a magic number that works for you

Financial freedom can be defined as a state of feeling confident in your ability to meet financial needs. Of course, financial goals differ from person to person, so it's logical to assume different people have different levels or thresholds at which they feel financially free.

While that is certainly the case, the difference in the sums needed to feel financially free between those higher on the socio-economic ladder and those at a lower rung isn’t all that big. Furthermore, the median amount for Singaporeans to feel financially free isn’t as large as you may think.

These findings – and more – were reported in Singlife’s Financial Freedom Index 2023 (FFI), which surveyed 3,000 Singaporeans and PRs aged 18 to 65.

Besides the level of financial freedom among consumers in Singapore, the report also sought to understand prevailing perceptions of financial freedom, as well as common financial behaviours and attitudes.

Let’s explore the report further, and how you can use the takeaways to inform your own financial journey.

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Singlife Financial Freedom Index 2023 – Key findings

Financial freedom is a cherished goal

Financial freedom is regarded as an important goal, with 7 out of 10 respondents feeling this way.

However, less than 3 in 10 (29%) of survey participants reported feeling financially free. A further 54% regarded themselves as somewhat financially free, and 17% said they were not financially free at all.

Perhaps this is not surprising. Singapore is routinely ranked as among the most expensive cities in the world to live in, and the current high-inflation economic climate certainly isn’t helping things.

What’s worrisome is that only 3 in 10 survey respondents felt at ease with their financial status, with the majority – 7 in 10 – feeling less certain, or even not at all.

Related to this topic: Financial Independence vs Financial Freedom: What Are You Looking For?

Median sum to feel financially free – S$566,640

Respondents were asked how much they felt they needed to feel financially free. The median answer was S$566,640.

That’s quite a bit lower than the S$1 million target that many Singaporeans think they need, a figure seen as recently as in this 2021 Manulife survey. 

To be sure, Manulife’s survey was focused on retirement, but in Singife’s FFI, one of the top ways respondents defined financial freedom is the ability to choose when to retire (more on this later), so we think it’s a fair comparison.

What’s also interesting is that the gap in expectations between those with higher incomes and those who earn less is smaller than you’d expect. Have a look at the following table.

Average individual monthly income

Average amount needed to feel financially free

Financially Free: S$4,114


Everyday Consumer: S$1,372


Financially Constrained: S$804


Source: Singlife Financial Freedom Index 2023

The Singlife FFI categorised respondents into three groups, based on the respondents’ self-assessment on their own degree of financial freedom.

After they ranked themselves on a scale of 1 (not at all financially free) to 10 (extremely financially free), survey participants were sorted into:

  • Financially Free (8 to 10)
  • Everyday Consumer (4 to 7)
  • Financially Constrained (1 to 3)

As you can see, there’s a significant difference in average salaries among the three groups, with the highest-earning group earning almost 3x more than the lowest-earning group.

Despite this, the average amount required to feel financially free fell within a much narrower range – between S$600,000 to S$728,000.

Perhaps this means that Singaporeans are more homogenous in financial expectations than it appears?

Related to this topic: 8 Sneaky Signs That Lifestyle Inflation Is Delaying Your Financial Freedom


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How long would it take to reach financial freedom?

Recall that the median sum required for financial freedom is S$566,640. With a median savings rate of S$1,733 per month, it would take 27.3 years to achieve financial freedom.

Here’s a more nuanced breakdown.

Average annual savings

Average amount needed to feel financially free

How long to reach financial freedom

Financially Free:



11.0 years

Everyday Consumer: S$1,372


33.6 years

Financially Constrained: S$804


68.2 years

Source: Singlife Financial Freedom Index 2023

Obviously, how much you can save each month will impact how quickly you attain financial freedom.

Singlife estimates that the highest–earning group can reach the group’s average amount to feel financially free in a little over a decade.

Meanwhile, the lowest-earning group would need to take twice as long to reach their version of financial freedom.

Interestingly, despite the difference in income levels, those in the Financially Free group and the Financially Constrained group both save similar levels of their salaries – around 50%.

Related to this topic: Retiring Early: Why The F.I.R.E Movement Might Not Work For Everyone

Leading indicators of financial freedom

So what actually counts as being financially free?

Singlife’s report ranked 25 indicators of financial freedom over six categories (Retirement, Income Streams/Stability, Managing Unexpected Events, Spending/Saving & Goal-setting, Managing Recurring Expenses, and Giving Back).

Here are the 10 most important indicators, as chosen by respondents.

  • Choice to stop working/retire as desired (8.5%)
  • Giving back to society on a regular basis (6.2%)
  • More than enough savings to spend on needs and wants (6.1%)
  • Can maintain current lifestyle in face of unexpected events for at least 12 months (5.8%)
  • Can manage rising costs and inflation (5.1%)
  • Can meet monthly savings goal after paying off bills and loans (5.0%)
  • Can provide for dependants comfortably (4.9%)
  • Income growth is consistently higher than increase in personal/household expenses (4.9%)
  • Sufficient savings to maintain lifestyle in retirement (4.6%)
  • Sufficient savings/emergency funds to tap into during unexpected situations (4.6%)

On the other end of the scale, respondents ranked factors such as being able to pay off bills and loans, and not having to rely on others for everyday expenses.

This indicates that Singaporeans generally do not regard being financially self-sufficient as adequate, and are instead highly focused on meeting forward-looking and future needs.

Related to this topic: 5 Singaporean Women Share How They Achieved Financial Independence


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What can we take away from the Singlife FFI?

There are lots more interesting findings contained in the report, and it is well worth your time to go have a look.

To help us sum up the key takeaways from this survey, we reached out to Guillermo Arbeiza, Chief Customer Officer, Singlife, who shared the following highlights.

Start by building your savings

Arbrieza pointed to the importance of having adequate savings, noting, “Savings form the foundation of healthy financial habits and is the bedrock of financial stability.”

This holds especially true given the increased uncertainty plaguing the macroeconomic and employment landscape.

He advises focusing on building up emergency savings “to address unforeseen expenses that may arise” and form a solid foundation as we journey towards financial freedom.

Related to this topic: Here’s How to Build An Emergency Fund On A Tight Budget

Incorporate suitable insurance products to stay on track

“A well-rounded safety net includes the integration of suitable insurance products,” which can safeguard your plans against disruptions arising from “unforeseen medical costs and other unexpected life occurrences”, Arbrieza said.

Furthermore, establishing a well-crafted portfolio of savings and investments is crucial. “This involves leveraging various products such as endowment and retirement plans, annuities, and investments like stocks, bonds, and real estate.

“Diversification across these options allows for risk mitigation, as they respond diversely to inflation and volatility.

“Some of these options offer guaranteed capital and returns, further enhancing their role in safeguarding against inflation and minimising risk,” he explained.

Related to this topic: Best Short & Long Term Endowment Plans in Singapore (2023)

Additional income streams are immensely helpful

One critical finding is that respondents have low confidence towards alternative income streams, perhaps owing to a lack of knowledge on how to build them.

Arbeiza counsels patience and consistency, noting “creating alternative income streams is not an overnight achievement. It requires careful planning, time, and often an initial capital investment.

“Savings play a crucial role in laying the foundation for generating these additional

income streams,” he added.

The key is to choose the most appropriate platform for additional income streams, according to your unique circumstances, such as life stage, risk profile and financial goals.

“For younger individuals, like Gen Z, exploring freelancing opportunities or part-time jobs can be viable alternative income sources.

For working adults, there are avenues such as allocating funds for investment products, which may involve dividend-paying stocks, funds, or other assets,” he pointed out.

No matter how you choose to build your alternative income, mitigating risk through proper portfolio diversification is essential. Arbrieza suggests tapping on the expertise of financial advisers.

“Financial advisors can assist you in creating a long-term financial plan that considers not only inflation but also other factors like your retirement goals, rising medical costs and other important life aspects,” he said.

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Read these next:

How to Build a Passive Income Portfolio Using ETFs (And Why You Should)

Building A S$100,000 Net Worth By 30: Is It Possible?

How to Set and Track Your Wealth Goals for Financial Success in 2023

6 Signs of Financial Stability in Singapore

Money Confessions: I Earn Less Than $1,000 Monthly, But I’m Perfectly Content — Here’s Why

An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.


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