A new report from Singlife has indicated that Singapore consumers may now need around 30 years to reach financial freedom, an increase of nearly three years from last year.
The survey, conducted between April and June 2024, involved 3,000 Singapore citizens and permanent residents (PRs) aged 18 to 65.
The 2024 Financial Freedom Index recorded an average score of 58 out of 100, down from 60 in 2023.
The index highlighted that 44% of Singaporeans surveyed believe they may never achieve financial freedom. Key barriers include:
Respondents estimated that they would need approximately S$612,045 to achieve financial security, an increase of 8% from last year’s figure of S$566,640.
With the median annual savings now at S$20,195 (around S$1,682 monthly), it is projected to take about 30 years to reach financial freedom, compared to 27 years last year. This trend is attributed to inflationary pressures and rising living costs.
Nevertheless, 55% of respondents in 2024 reported knowing how to attain financial freedom, an improvement from 49% the previous year.
Debra Soon, Singlife’s group head of brand, communications, marketing, and experience, said the expanded study offers deeper insights into how Singaporeans are saving relative to their goals, enabling the company to better understand and address the challenges they encounter in their financial journey.
“Perception studies are important in helping us understand how to help Singaporeans find a better way to financial freedom,” she said.
The survey also explored retirement aspirations, revealing that four out of five respondents aim to retire by age 65, slightly above the legally mandated retirement age in Singapore.
Consumers estimate they will need about S$2,856 per month for their retirement living expenses. However, the gap between this figure and the median monthly savings of S$1,682 indicated a potential shortfall, emphasising the need for increased savings to secure a comfortable retirement.
While the majority of respondents intend to retire in Singapore, a smaller portion is considering retiring abroad, motivated by factors such as:
Popular retirement destinations include Malaysia, Australia, New Zealand, and Thailand.
The survey also assessed the financial impact of parenthood, finding that half of the respondents estimate the cost of raising a child in Singapore from birth to age 21 to exceed S$500,000, based on median monthly expenses of S$1,918.
Over 40% believe that parenthood will delay their retirement and financial freedom by an average of 14 to 15 years.
As a result, 54% of consumers without children do not plan to have any, while 80% of those with children do not intend to have more.
Regarding insurance, the survey found that while most consumers hold an average of three types of insurance products, only 57% are aware of or possess life insurance, and just 38% have critical illness coverage.
Industry guidelines recommend life insurance coverage of at least nine times one’s annual income, yet the median coverage reported by respondents was S$286,670, falling short of the recommended level.
The survey also revealed that while 78% of consumers have at least three months of emergency savings, only one-third believe they have sufficient funds to cover unforeseen events.
In July, Singlife released a campaign aiming to help Singaporeans achieve financial independence.
