Serious Young Sinkies Expect to Retire Earlier with $6K Monthly Expenses! Old Fart Sexercising Sinkies must be Jealous!

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Younger Singaporeans expect to retire earlier and ‘in style’ with S$6,000 monthly expenses, but worry they can’t afford it: OCBC report​

Ooi Boon Keong/TODAY
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• Younger Singaporeans want to retire early but are going for costly retirement lifestyles, a study by OCBC bank found
• To achieve this, they are more willing to invest in high-risk portfolios for investments
• This is because they are expecting to make high and quick returns
• In doing so, they may be farther away from financial wellness goals

BY

NUR HIKMAH MD ALI​

Published November 22, 2022
Updated November 23, 2022
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SINGAPORE — A majority of young Singaporeans in their 20s worry that they cannot afford housing and retirement, but some of them are aiming for a retirement lifestyle that would cost almost S$6,000 a month.
This was a finding from a recent study done by OCBC bank. Its Financial Wellness Index 2022, published on Tuesday (Nov 22), is based on responses from 2,182 working adults here between the ages of 21 and 65. The survey was done through an online form in August this year.

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In it, respondents were asked to choose among three lifestyles for retirement, from “basic” to “luxurious”.
The basic lifestyle would require about S$2,500 a month and afforded the following:

• Owning and living in a government-built flat
• Taking public transport
• Tapping public healthcare
• Having no domestic worker
• Going on two holiday trips in the region in a year

The moderate lifestyle requiring about S$3,200 a month would include:

• Owning and living in a government-built flat
• Commuting via taxi or owning a mid-range car
• Affording medical consultation and treatment at general practitioners (private doctors) and government hospitals
• Employing a part-time domestic worker
• Taking three holiday trips in the region every year

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The luxurious lifestyle requires almost S$6,000 a month in expenses and would include:

• Owning and living in a private property
• Owning a high-end car
• Affording private healthcare, a full-time domestic worker, lifestyle and wellness experiences
• Taking two international holidays in a year

A total of 34 per cent of people in their 20s and 28 per cent of those in their 30s chose the most luxurious lifestyle.

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In contrast, 21 per cent of those in their 40s and 22 per cent of respondents in their 50s chose that.
The annual index by the Singapore bank was first launched in 2019 to understand the financial wellness of Singaporeans.
Mr Chin Mun Hong, head of market insights at OCBC, said at a media briefing on Tuesday that the young respondents’ expectations to "retire in style" may explain why 62 per cent of those in their 20s are worried that they cannot afford retirement.
He added that the report also showed that younger people experience higher levels of “mortgage stress” compared to those who are older, with 56 per cent of respondents in their 20s worried that they would not be able to afford their own homes.

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Mortgage stress, as defined by the bank, covered a range — from being able to repay the monthly instalments of a property loan on time with some difficulty to being completely unable to sustain the loan such that homeowners are forced to sell the house or downsize to a smaller property. Eight per cent of homeowners in Singapore this year had fallen into this worst end of the spectrum, OCBC said.

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STRUGGLING TO REPAY PROPERTY LOANS​

With the sharp rise of property loan interest rates and recession looming given the uncertain economic times, Singaporeans from other age groups are also not spared from experiencing higher levels of mortgage stress, or the increasing difficulty of paying home loans in full monthly and on time.
Results from the survey showed that four in 10 Singaporeans across all age groups face mortgage stress, the highest level since 2019 when the survey was first done before the Covid-19 pandemic.
At the time, one in four Singaporeans indicated that they were experiencing some form of mortgage stress.

YOUNG INVESTORS STILL KEEN ON CRYPTO​

Mr Chin said that the fear and stress of being unable to afford retirement have pushed some younger Singaporeans to invest in high-risk portfolios, including new forms of cryptocurrency.
Despite the high risks and volatility involved in mostly unregulated cryptocurrency investments, young people still want to do it because they believe they can gain equally high returns in a short amount of time.

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The survey findings showed that for respondents who invested in cryptocurrency this year:

• 18 per cent were people in their 20s
• 14 per cent were in their 30s
• 9 per cent were in their 40s
• 7 per cent were in their 50s

Although the number of young people investing in cryptocurrency had fallen from last year by 6 to 7 percentage points, Mr Chin said that the trend was worrying due to the high risks and extremely volatile nature of such investments.
“Youths in their 20s who invested in crypto and made losses have lost about 40 per cent of their principal amount.
“And yet, we see that they still want to invest in crypto, with 39 per cent of crypto investors in their 20s expressing that they are likely to invest more (in crypto) in the next 12 months,” Mr Chin added.
In addition, only 36 per cent of respondents in their 20s and 38 per cent of those in their 30s were on track with their investment goals — which is a significant drop from 75 per cent and 66 per cent respectively back in 2019.

“
“They think that if they take more risks, they can shorten the journey towards retirement… The result is that they are further away from financial wellness as compared to their older counterparts.
Mr Aaron Chwee, head of wealth advisory at OCBC
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Mr Aaron Chwee, head of wealth advisory at OCBC, said at the media briefing that young people tend to think of investing in high-risk portfolios as a way of earning “easy money”.

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“They think that if they take more risks, they can shorten the journey towards retirement… It makes sense for the younger generation to take more risks because they have a longer runway, but at the same time, one of the pitfalls is that their investments may not be diversified.
“The result is that they are further away from financial wellness as compared to their older counterparts.”
Mr Chwee added that a possible reason why young people seek high returns as soon as possible is because they plan to retire early.
Results from the survey showed that younger people expect to retire at least 10 years earlier than the age of re-employment — which is up to 68 years old now — compared to those in their 40s and above, who expect to retire between 61 and 65 years old.
Ms Tan Siew Lee, OCBC's head of wealth management, said in a media statement that young Singaporeans need to look longer term, seek professional advice and always do their research before investing.
"Three important things all Singaporeans can keep in mind are these: Save diligently, invest prudently, and have adequate insurance. If they do this, and if they persist with good financial habits, they can emerge stronger in time to come,” she added.