15 Feb 2016
64% felt that retirement planning is a way to save. But short and mid-term financial priorities and a lack of knowledge prevent it from being a priority
SINGAPORE, 15 FEBRUARY 2016
– A recent survey conducted by Nielsen and commissioned by NTUC Income revealed that when empowered with knowledge, young adults in Singapore are motivated to start planning for their retirement.
The survey showed that 2 in 3 non-retirees aged between 25 and 59 years old have started financial planning for their retirement. Fifty-five per cent of those aged between 25 and 35 years old have started saving and planning actively for their future with 64% of them taking the view that retirement investment is a way to ensure adequate savings for their future needs.
The survey also found 86% of Singaporeans who are between 25 and 35 years old willing to set aside S$300 a month to accumulate S$1 million by the time they retire at 65 years old.
However, prioritising retirement planning amongst the young is impeded by short and mid-term financial commitments and a lack of knowledge about when and how to save.
Twenty per cent of the 25 to 35 year-olds in Singapore listed saving for a first property as their main financial priority followed by providing money for their daily needs (14%). Saving for retirement only becomes a priority for those over 36 years of age.
The survey also found 33% of non-retirees not planning for retirement. Forty per cent of them stated a lack of understanding towards options available as a key reason for not having kick-started the process. Twenty-five per cent did not know how much was needed and when to start planning.
Today’s retirees, aged between 60 and 70 years old, were also surveyed to provide a reality check. The findings revealed that today’s retirees saved only one-third of the funds they perceived to be sufficient for retirement.
Marcus Chew, Chief Marketing Officer, NTUC Income, said, “The intent of this research is to identify the obstacles that Singaporeans face towards retirement planning, as well as to establish the motivations behind early financial planning. We now know that to encourage the young to be future ready, it is important to relate to them by not derailing their priorities and lifestyle.
“Hence, we aim to emphasise retiring as a journey towards retirement. It is about taking baby steps and setting aside a comfortable amount monthly and enjoying the peace of mind to live life to the fullest today while knowing that you are future ready. In this regard, anyone can start retiring by embarking on early financial planning for retirement.
“It is encouraging to learn that the young have a strong willingness to save for their retirement. However, the survey clearly identified knowledge gaps that challenged effective future planning and motivations that can persuade call to action. From these insights, we aim to better empower and support an increasingly ageing population in Singapore to live life to the fullest now and throughout their retirement,” added Marcus.
To influence and motivate young people to start early financial planning for their future, NTUC Income has partnered Mediacorp Artiste Rebecca Lim in a new ‘Retiring’ campaign to help raise awareness among the young about the importance of early financial planning and the options available to them.
“I have been an actress for ten years but it was only recently that I started thinking more seriously about my financial future. This journey on financial planning has been an eye opener and has set me thinking seriously about the lifestyle I would like to have from now to when I eventually do retire, the goals that I would like to achieve and how to make them reality,” said Rebecca.
“I now feel reassured and empowered about the future. It is heartening that I will be able to enjoy my current lifestyle knowing that I won’t have to worry in the future. In this way, I’ve started my retirement journey. This is how I wish all young people in Singapore will be able to feel – empowered.”
The retirees aged between 60 and 70 years old surveyed echoed Rebecca’s sentiment about preparing early. Sixty-six per cent of retirees wished they had started planning for retirement earlier with 65% of them indicated that they do not expect their savings to last throughout retirement. They also listed financial support from their family and children as the third most important source of income during retirement.
To arm young Singaporeans with insights and tools to encourage and support early financial planning, NTUC Income has launched a “Retiring” microsite which also aims to be the first point of contact for those who do not know when and how to start retirement planning.
Using illustrations to project retirement goals for users, the microsite looks to simplify retirement planning by making information bite-size for users and recommending products for people with different saving profiles. Those who wish to learn more about their financial planning options can connect instantly with NTUC Income’s financial advisers via Adviser Connect on the microsite to start more detailed discussions.
For further information visit www.income.com.sg/retiring