SINGAPORE: The amount of money that emerging affluent (EA) individuals in Singapore intend to set aside for their retirement fund will only last them about 13 years, based on their expected expenditure after they leave the workforce, a new DBS survey revealed.
Findings of the study, released on Wednesday (July 2), showed that 73 per cent of respondents plan to retire between 55 and 65 years old with savings of S$571,715 on average. More than 85 per cent said they expect to live on a retirement income of S$3,500 per month for the next 15 to 20 years or more.
"This reflects a gap as the emerging affluent individuals' retirement fund would last them only 13 years, which falls short of the average life expectancy in Singapore," the survey report said. "For residents born in the 1980s, the average life expectancy is 70 to 75 years, while those born in the 2000s have a life expectancy of 80 to 84 years."
DBS defines emerging affluent in two categories: Adults aged 18 to 29 with a personal monthly income of more than S$2,500 and those aged 30 to 59 with a personal monthly income of more than S$5,000. The study was based on a sample size of 800 Singapore residents.
RETIREMENT PLANNING NEGLECTED
Another disconnect: The survey also revealed that while 76 per cent of respondents said providing for retirement is a priority, only 49 per cent have a financial plan in place.
Of those who plan ahead, those who start early typically begin planning their finances at 28, while the late starters begin when they are around 39 years old, according to the survey.
The survey also found that "established" EAs - defined by the bank as those aged 35 to 49, single and working - allocate most of their incomes towards investment and savings. This segment set aside 51 per cent of their income, compared to the "family focused" - aged 25 to 62, married and working or not working - who placed the least at 43 per cent. A significant portion of the latter group's income goes to loans, DBS said.
"With longer life expectancy and changing expectations of retirement living, it has become increasingly important for people to start investing for retirement early. An early head start, even if it is with a small amount, will increase the probability of meeting your lifestyle needs when you retire," said Mr Jeremy Soo, Managing Director and Head of Consumer Banking Group at DBS Bank. - CNA/kk
MORE SINGAPORE NEWS
Latest Photo Galleries on xinmsn
Skyscrapers are sprouting up all over London, transforming a skyline once dominated by Big Ben and St Paul's Cathedral. Some Londoners are d... More Skyscrapers are sprouting up all over London, transforming a skyline once dominated by Big Ben and St Paul's Cathedral. Some Londoners are delighted at their city's "Manhattanisation" but others warn it risks losing its soul. Duration: 02:47
Date 1 hr ago, Duration 2:47, Views 8