By Elena Torrijos
About two weeks ago, Yahoo! Answers Singapore asked: “Do you think you will
be able to retire by 60?” Majority of the 623
who posted replies were quite pessimistic about their prospects. No
way, unless one marries rich or wins the Toto, was an oft-cited
response.
A good number of posters pointed out that life in the
city-state is all about debt – Singaporeans will have to work until
they die to pay off their obligations. This perception might be
exaggerated, but the argument that debt may hold back retirement at
60 is hard to discount, especially now that prices of HDB flats
have risen, and wages haven’t exactly caught up.
“Singaporeans are all ‘paper rich.’ Almost everyone is in
debt: Housing, Car, Study, etc…” said one poster that earned
agreement from fellow posters. Another poster noted that
Singaporeans incur debt starting from the time they study in
university to the time they have to buy a house and car.
The increasing cost of living in Singapore is
frequently mentioned as a major constraint to achieving
retirement goals. “With exorbitant prices of HDB flats… I doubt
Singaporeans can even think of retiring,” one poster said.
Inflation is high and medical expenses are rising, observed
another. A poster said that if Singaporeans went by current
estimates of financial planners, he would need to have at least a
million dollars to retire at 60.
A fair number thought that retirement at 60 might be possible –
if they spend their post-job years in a lower-cost country.
“If I take all my money and go abroad I can survive a long time,”
asserted one user. Another poster believes Singaporeans with
lower incomes will have to “migrate to a third world country” for
their retirement. The popular view is that the average-income
family cannot enjoy retirement by age 60, believing only the “only
the rich can do that.”
Nevertheless, a significant minority said retirement by age 60
is doable, with some posters explaining how they managed to do it
through frugal living or key investments.
“Trick is to make your money work hard and not you, work hard,”
said one user. Downgrading to a smaller HDB flat will free up
funds for retirement was another option mentioned.
Others underscored the importance of lifestyle choices:
“I’ve retired at 40…. It’s a lifestyle choice.” “It’s a
matter of whether you are disciplined or not.”
One user offered this formula: “Investing + saving + Start early
= Retire early.”
Pessimism Or Preparation
Many Singaporeans, however, have not started to plan for
retirement though they profess it is a goal. A recent survey of
more than 500 fully-employed Singaporeans aged between 35 and 55
revealed that 60% of Singaporeans want to retire by the time they
reach 60, but only 40% have made, or intend to make, a retirement
plan.
More than half of the respondents fear they will retirement
savings not last long enough and run out, and around 70% believe
they are “very likely” to turn to part-time employment when they
retire.
Simply being pessimistic about the future, however, will do
nothing to change it. Ultimately, as some posters recognise, being
able to retire at 60 (or when you want) will depend on how you
handle your situation now. The higher your income and the lower
your household and other expenses, then the more room to
save. The earlier you start to prepare and plan, the earlier
you can retire.
