Even with the expectation of a longer lifespan, millennials are confident that they will have enough savings to last a lifetime, and to have some fun too, according to #Bringon100 - a social campaign based on the findings from the research paper "Saving for 100: Funding for longevity in a time of uncertainty".
It aims to motivate Singaporeans to view longevity as an opportunity and embrace it with courage and positivity.
Three in five (61%) millennials (aged 25-34) surveyed for the Prudential Singapore study believe they will have a robust nest egg for themselves and their family. Those in the older age group (aged 35-54) are slightly less confident about financing their old age, with less than half believing they can do so.
To fund their retirement, millennials are diversifying their savings across multiple financial instruments such as fixed deposits, life insurance, health insurance, real estate and investment products.
With a greater tolerance to risk than the older generations, this group of younger Singaporeans is also planning to put their money in higher-risk assets, such as equities and exchange-traded securities. Seven in 10 (72%) surveyed say they are willing to invest more of their savings compared to 58% of the middle-aged respondents (aged 55-65).
Prudential Singapore’s CEO Dennis Tan said he is heartened to see that millennials are taking proactive steps to protect and to grow their wealth to ensure they have enough savings for tomorrow.
“We know that while Singaporeans are ardent savers, many will struggle to retire at 62 with enough savings to last another 30 to 40 years. It is important to start financial planning earlier in life so you have a longer runway to build your retirement nest egg, and can be better prepared to weather economic uncertainties and disruptions, such as the COVID-19 pandemic. As the old adage goes, if you fail to prepare, you prepare to fail,” said Mr Tan.
Duty of care and healthcare greatest challenge for millennials
While millennials are confident of their financial future, they will be challenged by responsibilities to financially support their ageing parents, children and grandchildren.
Nearly nine in 10 (89%) polled say they expect to take care of their elderly parents’ needs, while seven in 10 (71%) are committed to do the same for their children and grandchildren.
On the other hand, only 30% expect their children to provide for them when they retire. This is not surprisingly given the on-going decline in family size. Half (53%) of today’s millennials do not think it is practical to have more than one child which means there will be fewer siblings to share financial responsibilities in the family.
Rising healthcare spend is another challenge. Nearly 80% of respondents including millennials listed healthcare as their top saving priority. This stems from concerns about ill health in old age as medical inflation and the burden of chronic disease continue to increase.
Fulfilling personal aspirations
Besides caring for their family, millennials also need to consider how they can fulfil their personal goals. More than half (52%) want to take time off from work and the main purposes of the career breaks include travel, study and skills training, and care for family.
In addition, more than four in five (87%) plan to invest in their health and skillsets so that they remain financially self-sufficient for their extended years.
Investing in wealth, health and skills is key
Mr Tan opined, “We are seeing a new generation of younger Singaporeans who are seeking to break away from the traditional three-stage life of study, work and retirement. They desire to live a multi-stage life where they could have three or more occupations with career breaks in between to meet their personal aspirations.
“This begs the question: can millennials have it all? Can they take care of their family, fulfil their passion, have some fun, and at the same time, save enough to be financially independent at old age? Good financial planning is of course key. But investing in health and skills is just as important to ensure one can be financially self-sufficient for longer.”
Panel on Saving for 100 media launch event. L-R: Ms Dawn Cher, Mr Dennis Tan, Mr Abel Lim, and moderator Ms Tan Ping Ping
At the media launch event held on 23 September, he mentioned that there is one last key in addition to investing in wealth, health and skills. It is the social part to “invest in the intangible, invest in the family, invest in your relationships, invest socially; build that social network around you, and also the community in giving back. That makes living to 100 very purposeful” and in embracing the opportunities of living, saving and preparing for 100.
Mr Charles Ross, Editorial Director, Asia of Thought Leadership at The Economist Intelligence Unit (The EIU), reinforced that with life expectancy rising, the question of financing longevity lurks at the back of every Singaporean’s mind.
“Uncertainty brought on by the Covid-19 crisis has been a stark reminder of the need for individuals to be financially resilient to support both their changing lifestyles and longer lifespans. The EIU research found that a significant number of Singaporeans (34%) expect to live 85 years or longer, and many are using diverse financial methods and instruments - including higher risk financial strategies - to fund a longer life. The crisis has highlighted the need for everyone to adapt to change and be financially resilient, and this study has shown that many citizens are up to the challenge,” said Mr Ross.
These findings reflect the saving and investing attitudes of 1,200 Singapore residents aged 25-65 surveyed in a study commissioned by Prudential and researched by The Economist Intelligence Unit (EIU).
Saving for 100? Funding longevity in a time of uncertainty is the fourth instalment in the Ready for 100 series of reports commissioned by Prudential Singapore and researched by The Economist Intelligence Unit (The EIU).
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