Saving for Retirement vs. Navigating Immediate Financial Pressures: Singapore’s Struggle

Singapore consumers prioritise retirement savings with 63% considering it their top finance goal, aiming to retire at 62 with an average life expectancy of 83.5 years.

Despite retirement being a top financial goal, only 35% have a plan, ranging from 25% in the 25-35 age group to 44% in 45 and above; 26% set aside funds for retirement.

The low retirement planning proportion may be influenced by competing financial priorities: saving for emergencies (44%), maintaining lifestyle (34%), and medical needs (26%). Younger Singaporeans prioritise home buying (46%).

“Most of the respondents in Singapore recognise the importance of saving for retirement, but their other financial needs can get in the way, reflecting the priorities they have to juggle,” said Dr. Khoo Kah Siang, Chief Executive Officer, Manulife Singapore.

Balancing Macro Risks and Financial Goals

• Inflation concerns (68%) surpass the regional average (64%), alongside economic slowdown (57%) and rising healthcare costs (53%).
• Confidence in savings goals: rainy day (52%), current lifestyles (51%); less confidence for retirement (43%), home purchase (42%), medical needs (41%).
• Cash and bank accounts (63%) top retirement savings methods, exceeding regional average (53%).
• Savings/endowment insurance and returns from non-fund investments (both 20%) rank second.
• Cash reliance attributed to perceived safety. 26% bought insurance for safety and lower risks.
• Dr. Khoo emphasises the importance of addressing inflation risk, urging a shift from cash to avenues with compounding returns for Singapore consumers’ savings.

Managing Healthcare Risks with Insurance

• Rising healthcare costs concern 53% of Singapore respondents, exceeding the regional average by 10%.
• Singaporeans express lower self-perceived physical and mental health, with about 10% rating themselves positively.
• Respondents take proactive steps in health management: exercise (65%), healthier diet (60%), self-monitoring (52%).
• Despite efforts, 94% feel anxious or frustrated. Concerns include treatment costs (49%) and income/job loss (42%).
• 74% of respondents in Singapore own at least three types of insurance, surpassing the regional average (70%), and 54% plan to purchase insurance in the next 12 months.

Key Highlights

• Retirement savings are a top priority for 63% of Singapore consumers, but only 35% have a retirement plan in place.
• Competing financial priorities, such as emergencies and maintaining lifestyles, may hinder retirement planning.
• Inflation concerns (68%) exceed the regional average, impacting confidence in achieving financial goals.
• Cash and bank accounts (63%) are the primary way Singaporeans save for retirement, but Dr. Khoo emphasises the need to address inflation risk.
• Rising healthcare costs worry 53% of respondents, with 94% feeling anxious or frustrated about managing their health.
• Despite health management efforts, respondents express concerns about treatment costs and potential income/job loss.