Felicia Tan Published on Mon, Sep 06, 2021

A survey conducted by Great Eastern found that financial stability was strongly linked to contentment during retirement.

Of the 304 respondents surveyed in May 2021, 60% regretted how they planned their retirement in hindsight.

Another 45% regretted not planning for their retirement earlier.

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According to the survey, retirees who did not plan for their retirement and depended on a monthly retirement of $1,200 a month, were left with only $30 at the end of the month after paying off their basic monthly expenses.

The amount of $1,200 was derived mainly from the respondents’ top three income sources, which were past savings, CPF payouts and allowances from family members.

However, retirees who began planning for their retirement before 50 years old had an average of $625 per month more to spend.

Meanwhile, retirees who started planning after the age of 50 years had only $300 extra to spend monthly.

Naturally, most of the respondents who participated in the survey, indicated that they wish they had 60% more money to spend on a daily basis.

According to Alvin Yeo, financial services director from Great Eastern, there is no fixed amount for a comfortable retirement.

“What is defined as a “comfortable amount” differs from individual from individual depending on his/her lifestyle and spending habits,” he says in an e-mail interview with The Edge Singapore.

“My advice for them is to start saving and planning as early as possible, and to seek professional advice for their retirement planning, which is for the long-haul,” he adds.

The way Yeo sees it, it helps to “start small” when it comes to saving up for retirement.

“Retirement should be a priority to start once one can set aside regular amounts when one starts working, for instance. The key is to start at any time regardless of how late you think you may be, rather than never,” he says.

When saving up for retirement, Yeo recommends the 50/30/20 rule when it comes to apportioning one’s monthly income.

“I would advise to set aside the first 50% of one’s take-home monthly income on fixed and necessary expenses such as food and housing, and the other 30% to fulfill our “wants” or desired lifestyle needs like travel,” he writes.

“The remaining 20% can be either used for long term savings or allocate a portion of this for investments to gain potentially higher returns over the long term.”

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In the same survey, it was found that women did not prioritise their financial needs as much as men.

This may be due to women generally putting their family’s needs before themselves, says Yeo.

Instead, 45% of women were more dependent later in life on their children and family members for monthly allowances, compared to 39% of men.

Women also had less investment income at 18% compared to 31% of men surveyed.

According to data from Singapore’s Census of Population 2020, more women are also choosing singlehood, which means that they’re likely to have to rely on their own savings later in life.

As life expectancy for women are expected to reach age 85.4 years by 2040, it is imperative that women begin to prioritise retirement planning.

In order to enjoy a comfortable retirement, Yeo advises women to find out their financial gaps with professional help.

“I would advise that they should review their financial health every few years as their financial goals and needs may change over time,” he says.

Colin Chan, managing director for group marketing at Great Eastern says, “With longer life expectancy and the rising cost of living in Singapore, proactive retirement planning and starting early is more important than ever”.

“While retirement planning might be a distant concern for many of us, the many uncertainties in recent times impacting people’s job security is a reality. We encourage people to get started early, no matter how small, so that they can have the freedom to make their own decisions to lead their desired retirement lifestyle with the help of professional advice,” he adds.

Shares in Great Eastern closed 2 cents higher or 0.09% up at $21.31 on Sept 6.

Photo: Albert Chua/The Edge Singapore