According to a recent OCBC’s Financial Wellness Index survey, the majority of working adults in Singapore are financially unprepared for retirement (‘Most working adults not financially ready for retirement‘, 16 Jul).
The survey polled 2,000 working adults in Singapore between the ages of 21 to 65, asking about the state of their financial health.
In particular, half of those among the sandwiched generation – people who are supporting both ageing parents and their own children at the same time – struggle to cope, with significantly greater worries about their financial status.
The study also found that Singaporeans save an average of 26 per cent of their salary, with 82 per cent who proactively have insurance coverage. About a third do not invest and think of investing as a form of gambling, while almost half have no passive income. Passive income refers to income from rental, dividends, interest income, royalties, payout from annuities and so on.
Most are not well-prepared for retirement, the study said. Almost three-quarters are not on track with their retirement plans. Some 65 per cent said they are not accumulating enough funds to maintain their lifestyle after retirement.
In particular, the sandwiched generation was found to have more financial worries compared to the rest, with half of them finding it tough to support both their parents and children at the same time. Out of the half who find it difficult, some 63 per cent are concerned that they are not able to spend comfortably beyond the basics.
Interestingly, respondents’ ideal retirement age went up with age. Among those in the 20s age group, the average age that they want to retire is 56. In contrast, people who are 55 and older wish to retire at 67.
The government is looking to increase the age of retirement and re-employment age which is currently at 62 and 67 respectively in light of the increasing average life expectancy of the Singapore population.