Singapore’s boom from money pouring in from mainland China and Hong Kong expats relocating to the financial hub may be making a comfortable retirement harder to achieve, according to a Bloomberg article on retirement for Singaporeans.
Below is a summary of the key highlights from the article:
Long-term savings being jeopardized
Inflation hovering near the highest level in more than a decade;
Insufficient wage growth;
Accelerating housing costs;
Reluctance by many to put money in riskier, higher-yielding investments;
Other financial burdens.
Growing Percentage of Elders, Retirement Age
Impeding wave of retirees
Government forecasting that a quarter of the citizens will be at least 65 years old by 2030.
Singaporeans confronting the reality of having to work longer
Life expectancy rising to 83.5 years — one of the highest globally.
Cultural expectation that Asian children will support their parents being tested
One of the lowest fertility rate in the world and old age support ratio (number of people capable of supporting a dependent elder) plummeted to a record low of 3.8 in June and is projected to fall to 2.7 in 2030.
Dependence on CPF
Close to half of Singaporeans plan to count on CPF savings for retirement, Bloomberg reports, citing a survey by digital wealth platform Endowus.
It may not be sufficient to survive on CPF savings given the lifestyle you want, Bloomberg reports, citing Jacquelyn Tan, head of group personal financial services at United Overseas Bank Ltd as saying.
Retirement Cost Surging in Singapore
Below are examples of how much different lifestyle costs, Bloomberg writes, citing OCBC Bank and SingStat data.
S$2,550 - Lifestyle A: Two regional holidays a year, commutes via public transport
S$3,210 - Lifestyle B: Three regional holidays a year, commutes via taxi or owns mid-range car
S$5,760 - Lifestyle C: Two international holidays a year, employs full-time domestic helper
Link to article: https://www.bloomberg.com/news/articles/2022-12-12/singapore-retirement-crisis-pension-savings-dwindle-as-costs-surge?
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