The majority of Singaporeans do not have a financial plan for retirement, are afraid of planning ahead and need more than they estimate to retire, a new survey has found.
Many respondents hope to retire comfortably but only a minority are actually taking tangible steps to meet that goal, the survey of 1,000 Singaporeans and permanent residents by DBS Bank showed.
In the survey, over 76 per cent said their key long-term financial goal is to have enough for retirement.
But only a quarter are following a financial plan for retirement needs. Another quarter are in the midst of working out a plan while the rest do not have concrete ideas.
The report comes as the Government mulls over the tweaking of the Central Provident Fund (CPF) and grapples with a rapidly ageing population.
Singapore government estimates show that the number of residents aged 65 and above is expected to triple to 900,000 by 2030.
One worrying problem identified by the report is that many Singaporeans do not even know where or how to start planning.
About 24 per cent of the respondents said confusion about appropriate and rewarding financial products is the main barrier to financial planning.
Another 23 per cent feel that they do not have enough funds to start investing.
Workers and retirees agreed that Singaporeans do not know enough about building up a nest egg.
Retired sales and marketing manager Francis Cheng, 59, said: "I read the investment sections of newspapers and magazines. Using the knowledge, I was able to save and invest enough to retire earlier this year. You need to take an interest."
The survey also found that people are underestimating the funds they need for old age.
About 85 per cent of respondents said they hoped to have about $3,500 to spend a month for 15 to 20 years after retiring at the age of 65.
They believe that it would be sufficient to set aside about $480,000 to $700,000.
But calculations by DBS financial experts showed that for monthly payouts of $3,500, Singaporeans will need a $900,000 fund.
While economists agreed that Singaporeans are not saving up enough for retirement, they said the survey report seemed to be painting too dismal a picture of retirement.
"We need to take a look at wealth levels in Singapore, which are not low. High financial savings and ownership of real estate can be used to pay for retirement," said Barclays Capital economist Leong Wai Ho.
Nanyang Technological University economist Walter Theseira said he found the $900,000 target for retirement too high.
"The underlying message is that if you don't have about one million you can't retire. That is alarmist. You have CPF payments too," he said.