Singaporeans chasing financial independence want to retire early

| 26 Nov 2021

The pandemic has not deterred Singaporeans from reaching their financial goals as one in two plan to retire below the official retirement age of 62, according to a new survey by personal finance platform SingSaver.

It also found that 63% of Singaporeans started to build their wealth actively before the age of 30.  Singaporeans also remain on track to achieving their wealth accumulation goals, with 35% projected to reach S$100,000 in savings and investments in the next five years while 22% expect to hit S$500,000 within the same time frame.

The SingSaver survey that was conducted in September and October analysed 1,000 responses to understand better the investment and savings strategies that Singaporeans’ have adopted to build their wealth over the past six months. In the last six months, 30% of respondents have adjusted their retirement plans in response to the changing economic circumstances

Younger investors lean towards property investment

The survey found that an overwhelming majority (87%) of Singaporeans own some form of investment, with three in 10 investing more than 30% of their income each month.

Property investment is especially popular among younger Singaporeans aged between 25 to 34 and 35 to 44 (29%) in comparison to their older counterparts above 44 years of age (15%). Citing reasons such as appreciation value (37%) and steady cash flow (34%), real estate investment remains the preferred choice for 44% of Singaporeans compared to other investment products.

“Singapore consumers are becoming increasingly financially attuned, especially among the younger population. Financial Independence, Retire Early (FIRE) is a major motivator in accumulating wealth, especially among the younger respondents, with the majority indicating that they wish to retire sooner,” said SingSaver general manager Ian Hutchinson.

Singaporeans are upbeat about investing

According to the survey, other top investment products in the last six months include stocks (52%), cryptocurrency (47%) and bonds (31%). Different demographics also display varying preferences – older Singaporeans aged 45 and above (61%) preferred to invest in stocks, compared to just 48% of those aged between 25 to 44. Conversely, younger Singaporeans (51%) are more willing to invest in cryptocurrency than those aged 45 and above (36%).

SingSaver said that Singaporeans showed a strong interest in the CPF Investment Scheme (CPFIS) with three-quarters having invested their money in their Ordinary Account (OA) and Special Account (SA). It said that 32% of Singaporeans invest more than S$30,000 using their CPFIS on products such as Investment-Linked Policies (41%), Singapore Government Bonds (40%) and exchange-traded funds (33%).

Savings still important for Singaporeans

The survey also found that, in the past six months, Singaporeans have prioritised growing their savings (60%) over the purchase of investments (49%). This seems to be more true in the age groups of 25 - 34 years than those in the age group of 35 - 44 years.

The majority (71%) of respondents save 30% of their monthly income, which is above the typical 50:30:20 budgeting rule. As for expenditure, more than half (59%) spend up to 30% of their income on essentials such as paying their monthly loans and rent, while 47% of parents spend a significant portion (more than 20%) on their children.