Almost two-thirds of Singaporeans said that they fear of being unable to span their retirement funds, recent investment survey has found.
Most people in the city state are aware of the importance of saving money and keeping assets for their old age. While in fact, owing to increasing life expectancy, they have to face six-year savings gap in the time they plan to spend in retirement.
From 1,000 respondents involved in the poll, it is found that in general Singaporeans expect to stop working at age 60, and thus spend 17 years in retirement. However, the calculation will only take them as far as the age of 77, while the average lifespan has stretched to 83 years.
Additionally, almost half of investors’ assets (47 percent) were stored in cash – a slight decrease from 48 percent last year. On average, Singaporeans held $35,000 in long-term savings or as an investment, according to wealth management firm BlackRock’s study.
The cash allocation is roughly on par with the rest countries in the region, with the survey sampling adults in mainland China, Hong Kong, Japan, Singapore, and Taiwan in January and February this year.
Another 26 percent of retirement shares is allocated for financial investments, which take forms in equities and bonds. Meanwhile, 16 percent is for insurance-linked investments and another 7 percent in property.
BlackRock’s country head, Mr Kevin Hardy, said in an official statement, “It is important to make cash work harder by taking on some risk to generate desired retirement income. We find income-related products such as dividend-growing equities or high-quality debt to be popular among Singaporean investors. This can be a great means of delivering higher income than cash within diversified portfolios, without sacrificing asset growth.”
“Most Singaporeans are realistic about the performance of their investments, aiming for a target return of around 5 per cent. But they’re highly unlikely to get there by holding cash. In fact, it would still take Singaporean investors 35 years to double (their) money in cash, assuming a long-term expected rate of return of 2 per cent,” he added.
The study noted that Singaporeans still fared better than investors elsewhere. In the United States and Canada, for example, about 57 percent of investment portfolios is in cash, while the figure hits a staggering 68 percent in Europe counterparts, Straits Times reports.
While 68 percent respondents in Singapore said in the poll that they have started saving for their old age, this figure is lower than the region’s 74 percent average. Furthermore, 64 percent Singaporeans polled worried their savings would expire before they did.
In a summary of its findings, BlackRock noted that “most Singaporeans are realistic about the performance of their investments, aiming for a target return of around 5 per cent”. “But they’re highly unlikely to get there by holding cash,” it added. “In fact, it would still take Singaporean investors 35 years to double (their) money in cash, assuming a long-term expected rate of return of 2 per cent.”
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