YOUNGER Singaporeans aim to retire early, with nearly three-quarters of millennials and Gen Zs aiming to stop working before they turn 60, indicated a report by Etiqa Insurance released on Tuesday (Sep 24).
The report, Etiqa Insurance Singapore Retirement Insights Report 2024, delves into Singaporeans’ attitudes and preparedness for retirement.
It surveyed 1,009 individuals across four generational groups: Gen Zs (aged 18 to 28), millennials (29 to 43), Gen X (44 to 59), and seniors (60 and above).
While all age groups consider retirement planning to be a crucial long-term goal, Singaporeans on average only began planning in their 30s, said the report.
It noted that three in four Singaporeans start to plan for retirement at the average age of 35. On the other hand, Gen Zs start earlier at the average age of 23, while millennials start at 31.
Meanwhile, some 25 per cent of Singaporeans have not started retirement planning. This comes as they prioritise immediate financial needs and are reliant on Central Provident Fund (CPF) savings, among other reasons.
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The report found that 26 per cent of respondents were unsure of where to begin, and possibly felt “overwhelmed by the complexities of financial planning” or were struggling to balance short-term needs with long-term goals.
Younger Singaporeans are also concerned about living costs, job stability and insufficient savings, said the report. Despite this, millennials and Gen Zs are confident of achieving their early retirement goals, and most of them anticipate needing less than S$6,000 per month to sustain themselves after retiring.
The findings highlight Singaporeans’ awareness of the need for robust retirement planning amid rising costs of living and inflation rates and that early retirement aspirations must be balanced with the realities of financial planning.
Etiqa Insurance Singapore chief executive Raymond Ong said: “Many still underestimate the time horizon and funds needed to sustain their desired lifestyle. This could lead to a potential retirement gap.”
He said proactive measures such as saving early and investing prudently can help Singaporeans maintain their “desired standard of living in their golden years”.
Two in five Singaporeans considered investment to be a key retirement strategy but a third of those who invest lacked confidence in their approach, citing reasons like fears of losing money and insufficient financial knowledge.
Singaporeans across all ages prefer safer instruments over riskier ones and millennials and Gen Zs were no exception.
The top three tools favoured by all Singaporeans, including millennials and Gen Zs, for funding retirement were savings accounts, CPF contributions, and fixed deposits.
While investors have reaped financial benefits from these cautious approaches thanks to the high-interest rate environment in recent years, Etiqa noted that younger Singaporeans should rethink their retirement strategy amid the uncertain economic climate.
Additionally, the insurer also encouraged young Singaporeans to learn from the older generation, as more than one third of seniors and Gen Xs expressed regrets for not saving earlier.
Some 33 per cent of seniors and 30 per cent of Gen Xs also said that saving more aggressively and consistently could have significantly increased their retirement funds.
