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Why Affluent Singaporeans are not on Track for Desired Retirement

Majority of the affluent looking to retire are not financially on track yet.

This is according to a recent Standard Chartered Survey.

This Standard Chartered Survey covers 1000 respondents across 5 different countries China, Hong Kong, Malaysia, Singapore and Taiwan. The survey asked 200 respondents between the age of 35 to 59 years old, from each of the countries.

If I invert what the survey concluded, the result is quite interesting.

57% of affluent Singaporeans respondents (114 people out of 200 people) did not indicate that they are on track to the desired retirement they wish for. 36% of affluent Singaporeans have not started planning for their retirement.

For those 43% of affluent Singaporeans who indicate they are on track:

  1. 70% of them invest in stocks, bonds and unit trusts
  2. 47 per cent have put money in government retirement savings schemes
  3. 42 per cent have invested in property for rental yields

Affluent Malaysians and Chinese are much more on track to their desired retirement.

So how did Standard Chartered defined affluent Singaporeans? If you have a monthly income of $10,500 and investable assets of S$408,200, you are considered an affluent Singaporean.

Many of you might have a different definition of investable assets, but roughly it is bank accounts, certificates of deposit, mutual funds, stocks and bonds, cash value insurance. The investment people tend not to include properties.

To help frame this, your investable assets are the things a financial adviser can help you with.

Affluent Singaporeans have Similar Problems As Well

If we go by this definition of who are affluent in Singapore, then it covers a lot of Singaporeans who are also struggling with life.

You might not believe me when I say the above but $10,000 a month is not very spectacular nowadays.

What I observe is that when you have more money, it does not mean you have more personal free cash flow. Well, you do have more personal free cash flow, but you have to spend on something that make your life more comfortable.

For example, to earn that higher income, you have to spend more overtime at the office. This means that you cannot help out your wife back home, so you need to hire a maid. You would need a car because it is more convenient to ferry 5 people around when you go out.

Your per hour earnings, without these expenses is very high. But after including these seemingly optional but actually necessary expenses, will be very average.

This will result in your savings rate to be not high.

When your savings rate is not high, this pose a problem because the wealth you need for retirement do not build up on its own. You will need capital injection every year so that the fund grows big enough.

Desired Retirement Scenario May Proved Too Lofty

Another reason that I can think of is that those respondents have found someone to plan for them.

The plan that was drawn out for them shows that in order to retire, they need a sum of at least $4 million for example.

These respondents may felt that they are very far from their target due to their lower savings rate, high target amount.

A lot of people (affluent or not) are looking for lifestyle security instead of financial security. And that may be something that you can work towards.

But lifestyle security may cost you a lot of money.

That costly, may cost up to $20,000 a month. If they have less than this amount it might mean sufferance for them.

They Have a Plan But Not Highly Prioritizing Them

After I have published, I just thought of this.

If you are earning $300,000 a year as a household and have an annual expense of $90,000 a year, you can put away $50,000 a year and called it a retirement plan.

As the financial planner have worked out that they need $4 million, they decide to contribute $50,000 a year to it.

Why $50,000 and not the full $180,000 a year (let’s say tax take a way a chunk) into retirement?

Many of us think that it is better to have some money in cash “just for emergency sake”. We often do not measure it. It is just that cash equals safety.

Another possible factor is that, we do not trust the person we put our money with fully. Or that we do not fully trust the financial instruments we invest for our retirement.


I think whether it is affluent or not, the problem of why many feel retirement is far away is a mixture of:

  1. Their perceived expectations versus their true expectations of what kind of retirement life they want
  2. #1 links to the amount of wealth needed to retire. Often the amount is so large that there is a lack of motivation
  3. Having too low of a rate of return
  4. Not having enough personal free cash flow to meet when they wish to retire
  5. Not funding their retirement to the full potential
  6. Lack of trust in the plan

If you can right-sized your expectations well, you will rationalize the amount required. If your expenses is $90,000 a year, 25 times of this is $2.25 mil. Based on your available free cash flow of $180,000 a year, it is probably not so far away with some rate of return. If you wish to be more conservative, aim for 33 times your expenses. This works out to be $2.95 mil.

At a rate of return of 5%, it will take the couple either 10 years to 12.5 years to reach these 2 amounts.

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