Singaporean retirees are said to face 10 years of hardship once their savings deplete. Despite this, 1/3 of pre-retirees still do not save enough or even worse – they do not intend to save up for retirement.
According to the HSBC-commissioned independent research study into global retirement trends, The Future of Retirement: A balancing act, future retirees in Singapore foresee their savings to last only 13 out of an average of 23 years in retirement.
The study, which involved more than 16,000 people from 15 countries including 1,000 Singapore respondents, also found that the key reasons for a retiree’s savings shortfall are: lack of financial preparation during their working years, negative impacts of economic downturn as well as other life events.
The global report by HSBC also examines the pressures surrounding working age savers and retiree spenders, their different approaches to secure a desired standard of retirement life and also global retirement trends.
More than 53 per cent of working-age Singapore respondents said they are unable to retire comfortably with 15 per cent believing they will never be able to fully retire. The number of unprepared Singaporeans for retirement is second highest worldwide, behind Australia.
The most pressing issue, as reported by HSBC, saw that almost a third of those aged 45 and above or nearing retirement, are either not saving or have no plans to do so.
53 per cent of working-age Singapore respondents said paying off their mortgage and other debts remains the biggest barrier preventing them from saving enough for their old age. The amount is significantly high as it is reflected as the third highest globally in the report. There were also other respondents who cited recent economic downturns and unforeseen illnesses as the reasons for their minimal retirement funds.
The global report also showed that if people were to plan ahead and do things differently prior to retiring, chances are their standard of living while in retirement would definitely improve.
According to the survey, 40 per cent of retirees believe that retirement planning should start at the latest by the age of 30 so as to save enough to live on comfortably.
Ian Martin, Chief Executive Officer, HSBC Insurance (Singapore), said: “Retirees’ saving lethargy is a cautionary tale for current workers. However, better late than never, Singaporeans, regardless of age or income, are not without recourse on what they can do to plug the retirement savings gap and mitigate the negative future scenarios. They should start conversations with their wealth advisers soon to plan out their retirement.”
Here are 4 practical steps individuals can take towards a better retirement, as recommended and founded through HSBC’s research:
Action 1: Start saving early.
Retirement can seem a long way off when you are young. Nevertheless, it is crucial to start making retirement plans as early as you can.
Action 2: Know how much you need.
Start thinking about the kind of lifestyle you want when you retire and how much you will need to fund it.
Action 3: Refill the pot.
It is easy for retirement savings to suffer when times are hard. With the worst of the global economic downturn behind us, start looking for advice on how to replenish any depleted funds in your retirement pot.
Action 4: Expect the unexpected.
Unforeseen life events can damage your retirement savings. No one can see into the future, but do consider what could happen and how this will impact your financial planning.
This article first appeared on AsiaOne
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