Young are starting to plan for retirement: Poll

Survey by Income also identifies obstacles to saving, like lack of knowledge, lifestyle change

Young people here have started saving and planning for retirement, and are open to setting aside savings every month, a new survey has concluded.

The survey, released yesterday by Income, the NTUC insurance cooperative, found that 55 per cent of respondents aged between 25 and 35 have started actively planning for the future.

Investing in retirement is also seen as a way, by 64 per cent of those in the same age group, of ensuring they have enough savings.

The survey, conducted by Nielsen last September, interviewed 554 residents here - 456 were non-retirees aged 25 to 59, and 98 were retirees aged 60 to 70.

The survey added that 86 per cent of those aged between 25 and 35 are willing to set aside $300 a month, with the aim to accumulate $1 million by the time they retire at 65.

However, the insurer said: "Prioritising retirement planning among the young is impeded by short- and mid-term financial commitments, and a lack of knowledge about when and how to save."

  • 55%

    Of respondents aged between 25 and 35 have started planning for the future


    $300

    86 per cent of respondents aged between 25 and 35 were willing to set aside $300 a month


    40%

    Of those aged between 25 and 59 said they did not know the options available for retirement planning and, therefore, had not started

Saving for a first property was ranked first among financial priorities for those aged 25 to 35. The next most important was providing money for their daily needs.

Mr Marcus Chew, Income's chief marketing officer, said the main aim of the survey was to identify the obstacles that Singaporeans face over retirement planning, and to find out what motivates those who start early financial planning.

The findings showed 40 per cent of those aged 25 to 59 said they did not know the options available for planning for retirement, and that was a key reason for not starting on retirement planning.

Mr Chew added that the survey found that to encourage younger people, financial planning should not "derail their priorities and lifestyle".

Income has set up a microsite (www.income.com.sg/retiring) to tackle that aversion, featuring tools to encourage and support early financial planning, including the use of illustrations to project retirement goals.

The survey included the views of retirees in order to underscore the importance of early retirement planning.

Two-thirds of retirees - 66 per cent - wished they had started planning for retirement earlier. Almost as many, 65 per cent, do not expect their savings now to last all throughout their retirement.

The average amount retirees thought would be enough for retirement was $376,270, but on average, they had only $186,040 as a retirement sum, the survey found.

Retirees noted that financial support from their family or children is among the top three sources of income.

However, Income notes: "Having multiple sources of income, including insurance and personal savings, will help you maintain your lifestyle during retirement."

Ms Abby Chew, an Income financial adviser, said there was no one fixed retirement sum to cover every situation.

She added that everyone's financial situation changes at each stage of life and that it is "important not to overstretch their financial situation".

"We need to assess the person's lifestyle, net worth and current liabilities, to custom-make and tailor a plan that is suitable to kick-start their retirement plans," said Ms Chew.

A version of this article appeared in the print edition of The Straits Times on February 16, 2016, with the headline 'Young are starting to plan for retirement: Poll'. Print Edition | Subscribe