More Singaporeans might retire overseas (e.g. in JB) to stretch their life savings.
Singaporeans face serious retirement shortfall: Manulife
By Angela Tan
[email protected]
Published October 30, 2013
Singaporeans face a major retirement funding shortfall, according to the latest Manulife Investor Sentiment Index, released on Wednesday.
"If they don't make major changes to their savings strategies and behavior, they face the prospect of having to work in so-called retirement and risk downgrading their lifestyles," the survey revealed.
Singapore investors responding to the survey expect to be in retirement for 18 years on average, but their estimated savings will last only 12 years, leaving a six-year gap.
In today's monetary terms, this amounts to a savings shortfall of S$250,000 per person on average, based on investors' own calculations. While most Singaporeans say they have started planning for retirement, 32 percent have not.
"The shortfall threatens the security and lifestyle of Singapore's workforce when they retire. In our view even those who have started planning are underestimating their needs. With life expectancy increasing, people should plan to have retirement savings to last at least 20 years," said Annette King, President and CEO of Manulife Singapore.
The survey, based on 3,500 interviews across seven Asia markets, also showed similar concerns in the region.
Many are leaving it too late and nearly half say they have no financial plan for their retirement at all. As a result, a large proportion of investors are relying on fall-back options, such as extending their working life or drawing on their children's support, which may not prove reliable.
Robert A. Cook, President and CEO of Manulife Financial in Asia, said: "For anyone leaving it until later in life to start planning for their retirement, making up the shortfall will become harder and harder. The reality is that, without a clear plan, it won't be alright on the night."
Asia investors on average expect to depend on retirement savings for an average of 19 years, but the amount they claim they will have saved by the time they retire will cover only 13 years -- a six-year shortfall.
In some markets the gap is even higher, rising to 13 years in Japan, where 71 percent of investors were not confident of being able to afford a desirable retirement, a sentiment shared by nearly a third of investors regionally.
"And since Asians are living longer and longer and commonly underestimate their longevity, it is highly likely that for many the retirement gap will end up being even greater,'' Manulife said.
Across the region an average 55 percent expect to continue in full-time or part-time work during so-called retirement. This response was even higher in Indonesia (68 percent) and Singapore (69 percent).
About one-in-five expect to rely on their children for financial support. This was particularly evident in Hong Kong (21 percent) and Malaysia (42 percent).
http://www.businesstimes.com.sg/bre...erious-retirement-shortfall-manulife-20131030