News release

October 17, 2024

Sun Life Singapore survey highlights inflation challenges for retirees across wealth levels

As Singapore population ages, younger generations are retiring later to save more.

  • 42% of Singapore respondents will only start planning for retirement within 5 years of their planned retirement date.
  • Even those with higher earnings may be unprepared for retirement – 15% of high-income respondents do not save at least 10% of their income.
  • 4% of high-income retirees failed to plan for their retirement expenses.
  • 15% were caught off guard by higher-than-expected costs.
  • 55% of today’s retirees’ biggest regrets include not saving enough and not investing wisely.

Singapore (17 October 2024) – As Asia Pacific faces a significant demographic shift with nearly one in four being over the age of 60 by 2050[1], a new survey by Sun Life Asia reveals challenges and opportunities for retirement planning in Asia, including Singapore.

The survey, titled Retirement Reimagined: facing the future with confidence, surveyed 505 Singaporeans as part of a study of over 3,500 respondents across mainland China, Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam, about their aspirations and planning as they prepare for old age.

Majority are ill-equipped to deal with financial realities of retirement

The survey reveals growing desire among Singaporeans for financial security and independence in old age. In addition to the Central Provident Fund (CPF) scheme (including voluntary CPF top-ups) and reliance on the family, holistic retirement plans may also include individual savings, insurance and investments. Saving for retirement was cited as the number one financial goal over the next 12 months across all age groups surveyed. However, many are ill-equipped to deal with financial realities as 42% will leave planning around retirement expenses until five years or less before retirement, and a worrying 15% will not plan for this at all.

While most respondents save at least 10% of their income for retirement, there is 29% who do not save, which is still considered a significant population. When asked about planned sources of income for retirement, the average expectation was for 32% of income to be drawn from cash savings, underscoring a potential missed opportunity to maximise retirement income through investments to ensure it keeps pace with inflation.

Christopher Albrecht, Chief Executive Officer at Sun Life Singapore said: “As Singaporeans navigate a rapidly evolving retirement landscape, it's clear that the shift towards personal financial responsibility is accelerating across all income levels. Our findings show that while securing financial independence is a priority for many, the majority still do not plan early enough. Early and strategic planning is crucial for everyone, not just to preserve wealth but to ensure long-term financial security, including the need to cater for future generations. Regardless of income, starting retirement planning earlier provides a stronger foundation for a comfortable and sustainable retirement.”

Younger generations are adjusting expectations: retiring later and saving more 

While other recent surveys have shown that younger generations aspire to retire early, they are also increasingly aware of the looming challenge and are adjusting expectations accordingly. Our survey found that those who are currently working (“non-retirees”) anticipate retiring at an average age of 64, five years later than the average age (59) that current retirees exited the workforce.

In addition, 18% of non-retirees have actively postponed their retirement plans, compared to only 11% of retirees who did the same, reflecting changing economic conditions and personal circumstances. The primary reasons for delayed retirement include the need to save more (60%), need to cover increased living expenses (56%), and need to cover health expenses (37%). 

Retirees caught off guard by higher costs and regret insufficient preparation

As a warning sign to future generations, 16% of retirees expressed that they had not planned their retirement expenses and 18% of retirees report being caught off guard by higher-than-expected costs – a number that looks only set to grow as inflation continues to bite.

For those caught off guard by higher costs, the key factors are the general cost of living (64%) and healthcare expenses (43%). In response, many have been forced to cut spending (57%) and liquidate income-generating investments (50%).

14% of retirees express regret over past financial decisions, with the biggest reasons expressed by this group being not saving enough (55%), followed by not investing wisely (55%), and retiring too early (45%).

High-income respondents: A closer look

The survey shows that even high-income individuals face challenges in preparing for retirement – although their numbers are slightly better. 40% of high-income respondents will still leave planning for retirement expenses until five years or less before retirement, while 11% will not plan for this at all.

Similarly, 15% of high-income respondents save less than 10% of their income for retirement, highlighting that even those with higher earnings may be underprepared.

Among high-income retirees, 15% were caught off guard by higher-than-expected costs, despite only 4% failing to plan for their retirement expenses. Their primary concerns were the rising cost of living (50%) and the need to support younger family members more than initially anticipated (50%). In response, 75% of this group of high-income retirees liquidated long-term income-generating investments, while 63% have had to cut daily spending.

While 14% of retirees overall express regret over past financial decisions, this figure was lower among high-income retirees at 6%. The primary regrets for high-income retirees were not investing wisely (100%), retiring too early (67%), not saving enough (33%), and not diversifying investments (33%).

For high-income workers, the anticipated retirement age is 64, six years later than current high-income retirees, who retired at 58. Additionally, 19% of high-income non-retirees have actively postponed their retirement plans, compared to 18% of non-retirees overall.

Christopher Albrecht further added: “High-income individuals often face unique challenges when it comes to retirement planning. Our research highlights that whilst wealth can provide a cushion, it doesn't eliminate the need for careful planning. We're here to help High Net Worth individuals not only grow and preserve their wealth, but also build a legacy, with our insurance solutions. From growing their wealth to ensuring that their assets are passed on to the next generation, early planning and strategic investment decisions are essential for safeguarding their financial future and the future of their loved ones.”

 

ENDS

 

Notes to Editors

The findings in this survey were analysed and established through a total of 3,552 interviews conducted online in July 2024 across mainland China, Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. Majority of respondents were drawn from middle to high income backgrounds, with some representation from lower income bands, with a minimum age of 30.

The executive summary is available Retirement Reimagined: Facing the future with confidence.  

About Sun Life

Sun Life is a leading international financial services organisation providing asset management, wealth, insurance and health solutions to individual and institutional clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2024, Sun Life had total assets under management of $1.46 trillion. For more information, please visit www.sunlife.com. For more information about Sun Life Singapore, pls visit www.sunlife.com.sg.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to editors: All figures in Canadian dollars.

1Source: Asia Development Bank: https://www.adb.org/what-we-do/topics/social-development/aging-asia

Sun Life Assurance Company of Canada is an insurance company federally incorporated in Canada, with OSFI Institution Code F380 and its registered office at 1 York Street, Toronto, Ontario, Canada M5J 0B6. It is regulated by the Office of the Superintendent of Financial Institutions, Canada. Sun Life Assurance Company of Canada Singapore Branch (UENT19FC0132B) is registered with the Accounting and Corporate Regulatory Authority of Singapore as a foreign company, with its registered office at One Raffles Quay, #10-03 North Tower, Singapore 048583. It is licensed and regulated by the Monetary Authority of Singapore. Where Sun Life Assurance Company of Canada Singapore Branch is referred to as “Sun Life Singapore”, this is strictly for marketing and branding purposes only, and no legal significance is expressed or implied. Sun Life Assurance Company of Canada is a member of the Sun Life group of companies. The Sun Life group of companies operates under the “Sun Life” name. Sun Life Financial Inc., the publicly traded holding company for the Sun Life group of companies, is not a product offering company and is not the guarantor of the obligations of its subsidiaries.

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