Do you have what it takes to live your dream retirement lifestyle? This sobering Great Eastern survey reveals how little spare cash retirees who didn’t plan for retirement have.
The main reason we plan for retirement is to ensure we have sufficient funds to support our lifestyle when we no longer have an income instead of relying on our kids to take care of our financial needs.
With inflation eroding the value of our hard-earned savings, it’s even more crucial that we find ways to save and grow our nest egg efficiently. A surefire way is to start as early as we possibly can. Yes, retirement planning goes beyond living within one’s means. It takes a whole lot of time, discipline and commitment.
The reality is that everyone should plan for retirement no matter how challenging it is to tackle everything life throws at us. It is saddening to learn that more than half of Singaporeans are poised to run out of money in the last 14 years of their lives.
If that sombre nugget of information doesn’t spur you to get started, perhaps the following findings from Great Eastern’s The State of Retirement in Singapore survey, with 304 respondents above the age of 63 in Singapore, will.
#1 S$1/day — Retirees who didn’t plan for retirement have an average of S$1/day to spend on things they like
Assuming retirees’ basic monthly expenses total S$1,200, Great Eastern’s The State of Retirement in Singapore survey found that retirees who didn’t plan for their retirement and depended on their past savings, CPF payouts and family members’ allowances were living on the edge: they only have S$30 extra to spare every month.
This is worrying as it makes things challenging if unexpected expenses are incurred.
Needless to say, there’s really not much one can do if they only have an average of just S$1 per day to spend on their hobbies.
#2 S$625/month — Retirees who planned before 50 have this amount to spend monthly after taking care of basic expenses
There are clear benefits to starting early when it comes to retirement planning. This rings even more true if one does so with professional advisory early on to secure the coveted financial independence in their golden years.
Great Eastern’s survey findings found that retirees who started planning before age 50 were in a stronger financial position than those who started after 50 and those who didn’t start at all.
This group of retirees has an excess of about S$625 monthly after taking care of their basic expenses. That’s more than 20 times compared to those who didn’t plan for retirement, and twice as much as those who started planning for retirement after 50.
#3 45% — Percentage of retirees who regretted not planning for retirement earlier
It is unsurprising that starting late and not seeking professional advice ranked among the top regrets of the group of surveyed retirees. 45% of them regretted not planning for retirement earlier while more than 60% regretted the way they planned for retirement.
Financial stability has been found to be strongly linked to contentment in retirement. Most surveyed retirees wished they had 60% more money to spend monthly. Some have had no choice but to adjust their lifestyle expectations as those are clearly limited by the retirement funds that they have.
#4 S$250,000 — Monetary cost of critical illness that can jeopardise family’s financial stability
In an earlier survey on critical illness, Great Eastern found that critical illness patients and their caregivers chalked up a whopping S$250,000 on average on medical and hospitalisation bills. Aside from such expenses, the long-term loss of income can leave critical illness patients as well as their loved ones extremely vulnerable on the financial front.
For many who didn’t plan their retirement holistically to take into account hefty medical costs that can quickly destabilise their family’s financial standing, they understandably have many could haves and should haves clouding their mind when the unexpected strikes.
Large medical expenses can eat into the funds required for life’s many other necessities, such as day-to-day expenses, loved ones’ retirement planning, investments, children’s education expenses and more.
Given how unpredictable life is, it is only prudent that we buy essential insurance like critical illness insurance, early critical illness insurance and hospitalisation insurance when we’re younger and supposedly healthier to protect ourselves and our loved ones — in addition to being proactive when planning for retirement.
Just so you know, neglecting essential insurance is a no-no: that’s one of SingSaver staffers’ top financial regrets.
How did surveyed retirees save for their retirement?
- Set aside money in savings or current account regularly (66%)
- Invest in stocks, unit trusts or bonds (49%)
- Invest in fixed deposit plans (40%)
- Top up CPF LIFE (33%)
- Buy endowment insurance policies (33%)
- Buy retirement insurance policies (32%)
Help yourself to better financial shape in the new norm, with SingSaver’s all-new Ultimate Savings Guide! Got your free copy yet?
It’s never too early to plan for retirement
While not everyone’s financially savvy, it really is never too early to start planning for retirement. The need to proactively begin now is more important than ever with longer life expectancies and rising cost of living in Singapore.
Start taking charge of your personal finance journey if you haven’t already done so. Build up your emergency funds, invest your CPF funds, start investing and learn to shield your CPF Special Account to maximise interest earned on your CPF savings
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By Denise Bay
While Denise has a thing for travel, K-dramas, 0% sugar bbt (with boba!), Japanese cuisine and flat white, her curious nature means all sorts of random tabs are open on her phone 24/7. She doesn’t like to pay full price for anything, too.