As Singapore reports declining birth rates and an aging population, 46% of people in the Lion City expect their family to look after their retirement needs, St James’s Place Wealth Management (SJP) Asia has found.
Nearly half of those surveyed by the firm (48%) said they will not have enough money to fund and sustain the lifestyle they would want to have after they stop working.
As a consequence, 13% believe they will need to work after retirement age because of their scarce savings, whereas 66% are worried about the financial burden retiring could put on those close to them.
Gary Harvey, chief executive at SJP Singapore, said: “Our findings show that there are many prevailing expectations for Singaporeans in retiring, and that their retirement finances may generally only flow in one direction.
“Amid declining birth rates and an aging population, there may be more difficult choices for families ahead.”
Generally unaware
While expectations may be high, 42% are not aware of how much they will need to fund their retirement and their goals in later life.
According to SJP Asia, more than half (51%) reported they will need a monthly income of over S$5,000 (£2,884, $3,533, €3,223); while the median expectation from the survey responses ranged between S$3,501 and S$5,00.
This, however, happens in tandem with a lack of awareness and openness about financial planning and needs.
Nearly 60% claimed that not understanding tax issues, and needing to make sacrifices, were a significant source of stress; and 44% did not discuss retirement issues and expectations with their families.
The majority of those believing they won’t have enough for retirement (56%) are aged 25-40, which is also the age bracket with the highest number of people without life insurance (72%).
Passing the baton to the young
Generational wealth transfer is also an issue among Singaporeans, considering that only 38% have made a Will.
Additionally, three in five (60%) have not yet made plans to pass on their assets to family, but 40% intend to do so in the next five to 10 years.
The lack of planning, according to SJP Asia, stems from concerns around understanding tax implications (53%) and a lack of knowledge around transfers themselves (50%).
People in Singapore have also expressed worries around how their wealth is going to be distributed among family members (40%), as 29% don’t want to cause disharmony between their relatives and 27% are worried the younger generation won’t manage or grow it properly.
Harvey added: “Generational wealth planning is one of the most important but often under-looked aspects of personal financial management today.
“We urge Singaporeans to strongly consider the impact that a lack of planning may have, not just on their financial independence in their future lives, but also on their families and loved ones.”
The wealth management firm’s survey interviewed 2,064 people aged 25-54 from households with annual income between S$70,000 and over S$250,000.
It was conducted online between February and March 2020, with 1,045 respondents based in Singapore.
