A recent survey conducted by Etiqa Insurance reveals that a quarter of Singaporeans have yet to initiate their retirement planning, even as many express aspirations for a secure financial future. The Etiqa Insurance Singapore Retirement Insights Report 2024 highlights that 71% of millennials and Generation Z respondents aim to retire by the age of 60, projecting a monthly expenditure of less than $6,000.
Among these younger generations, confidence in achieving retirement objectives is notable, with 75% of millennials and 69% of Gen Z feeling optimistic about their financial preparedness.
“While it is encouraging to see more Singaporeans taking proactive steps towards preparing for retirement, many still underestimate the time required and the funds needed to maintain their desired lifestyle, which could lead to a potential retirement gap,” stated Raymond Ong, CEO of Etiqa Insurance Singapore.
The survey indicates that younger Singaporeans exhibit a preference for low-risk financial instruments when planning for retirement. The top choices include savings accounts, favored by 61% of Gen Z and 65% of millennials; Central Provident Fund (CPF) contributions, preferred by 56% of Gen Z and 54% of millennials; and fixed deposits or savings bonds, selected by 44% of Gen Z and 52% of millennials.
However, financial experts urge younger Singaporeans to reconsider their retirement strategies amid today’s uncertain economic landscape. Emphasizing the importance of maximizing investment returns, experts recommend leveraging the power of compounding to build sufficient retirement funds.
Furthermore, the desire to secure financial stability for the next generation is evident, with 78% of millennials and 68% of Gen Z prioritizing wealth transfer within their financial goals. Notably, eight in ten Singaporeans intend to retire between the ages of 50 and 70, and 75% have made retirement planning a priority, typically starting at age 35.
Despite this, 25% of Singaporeans have not yet begun their retirement planning. The primary reasons cited include immediate financial needs (38%), reliance on CPF savings (34%), and insufficient savings (30%).
The report also notes that while 41% of Singaporeans view investment as a crucial retirement strategy, one-third of those who invest lack confidence in their financial decisions. Common concerns among these individuals include fear of losing money (57%), inadequate financial knowledge (53%), and perceived high risks (45%).
As retirement planning remains a critical issue, healthcare needs and expenses are top concerns for seniors (63%) and Generation X (51%), who are increasingly aware of the financial implications of aging. Additionally, about 38% of Singaporeans are prioritizing insurance coverage as part of their retirement planning strategy.
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