5/22/2013 3:45 PM ET|
Wealthy nation can't afford to retire
Singapore has the most millionaires per capita in the world, but people who aren't that rich are having a hard time retiring.
The Southeast Asian city-state of Singapore may boast of the highest percentage of millionaires in the world, but retiring in this wealthy financial hub is becoming even more difficult for the common man.
According to a recent study by HSBC, the citizens of this country, which has one of the highest per capita incomes in the world, face the grim prospect of running out of their savings almost halfway through retirement as the high cost of living and increased life expectancy eats into their nest egg.
Singapore has gradually moved up in human resources firm Mercer's global rankings of the world's most expensive cities, rising to sixth place in 2012 from eighth in 2011 and 11th in 2010.
"There is cause for concern from the finding that the retirement savings of people in Singapore will run out after nine years, which is about the time they are entering into frail retirement and a stage of their lives when medical costs and other elderly care expenses are expected to rise," Paul Arrowsmith, head of retail banking and wealth management, HSBC Singapore, said in the report released earlier this year.
"People are living longer, through tougher economic times, and expectations about their standard of living in retirement have risen," Arrowsmith added.
More than half of the 1,000 Singaporeans interviewed for the survey said that either they were not adequately prepared or not prepared at all for retirement as they expected to continue working beyond the age of 65 to be able to afford their desired lifestyle.
One also needs more money to fund one's retirement in Singapore. According to the study, the annual household income required to lead a "comfortable" retired life in Singapore is the third highest among Asia's major economies, behind Australia and Hong Kong, at $48,773. This figure is 68% higher than what was needed in 2011, the survey, which has been running for eight years, found.
The rising cost of living in Singapore has 58-year-old Singaporean Janice Tan worried about her retirement.
"I think the cost of living is really escalating a lot," Tan told CNBC. "During the Chinese New Year season, when I went to buy the goodies, it really shocked me, because the cost is really going up too fast."
Tan and her husband are currently paying for the education of their two children, including a 21-year-old daughter studying in Perth, Australia. While Tan, an administration professional, hopes to retire soon, she says she knows it might be another 10 years before that happens.
"As human beings we want more -- a more comfortable life. That's where the worries come in on whether you will able to survive," Tan said.
According to the study, of those not saving for retirement, nearly half said they were being held back by the cost of day-to-day living.
High costs have become a major cause of discontent among Singapore's residents. This prompted a rare protest in which about 3,000 people participated. They were voicing concerns over swelling costs driven by an influx of foreigners.
Foreigners, who account for almost 40% of Singapore's 5.3 million people, have been blamed for pushing uphousing prices and taking up jobs in one of Asia's major business centers.
The top three fears about retirement cited by Singaporeans were poor health, financial hardship and not having enough money to provide for good healthcare, according to the study.
With retirement savings drying up at a time when Singaporeans are most vulnerable to health problems, funding medical bills could become a big burden, HSBC said.
Tan backed that sentiment, saying that medical bills from a motorcycle accident that her husband was involved in last year have been a drain on their finances.
"As we get older, I realize it [funding health costs] is a more important thing to sort out," said Tan. But the high cost of living is coming in the way. "I can't imagine how much more the cost of living is going to go up to," she added.
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I'm concerned with the USA and the thieving bastards who have pilfered our Social Security contributions.
I do not know if I truly believe this story. I was just there for several days in late April. Hearing from several people, not high rollers by any means, but ordinary work-a-day people. They had just the opposite view.
Unlike our unfunded pay as you go social security system, Singapore has a fully funded retirement system funded by mandatory 20% withholding from both employer and employee (40% total) that is invested by the government in worldwide stocks/bonds/etc, that is vested with the employee that they can take as a lump sum or an annuity after age 65. If they die before collecting, their heirs get the money.
I would take that system any day over our bankrupt social security and medicare pay-go bankrupt system.
They also hang drug dealers. And send you to prison (not the country clubs like here) for 60 days plus get 3 strokes with a cane if you overstay your visa by even one day. I like it.
Back to work you go grandpa and grandma. No retirement money for you. Gotta feed Jose and Maria, so they can still drive their $80,000 lowered cadillac escalade.
This article is very interesting in the fact that people in other nations have the same dilemma as in the US. Blaming anyone other than yourself for not saving for retirement is unfair. I am 52 and so its my husband. We have 2 girls one a senior in private college and one in 7th grade. We started saving for our oldest education when she was born. We lived in a so-so house mostly unfurnished so we could put maximum amount into our 401K and IRAs and 529 accounts. Many evenings of homemade pizza and dvd movies. We shared 1 car for a while, lived paycheck to paycheck and had no vacations other than staying home for a few days. We were lucky selling our 2nd house at a profit so that allowed us to by a better house with furniture. We have no debt. If we cant afford, it we don't buy it. My children will graduate college with no debt. Am I the 1%. Far from it. We worked hard, saved saved saved and sacrificed vacations and stuff and drove our cars into the ground. My husband was laid off at one point and so was I. We lived even more frugally but made it through. We WILL be able to retire at some point when we want to. People stop blaming others for your situation. Immigrants legal or illegal did not force you to live beyond your means. The top 1% did not take anything away from you. Take responsibility for your destiny.
should start saving while still young, watch your discretional, mad money spending, and be prepared to adapt your lifestyle according to your fixed income when you retire. One can`t go on living the life used to before retirement unless the savings are matching that style.
56 and retirement is just a dream at this point. Social Security will probably be gone and if this crazy health care law isn't destroyed it will devour all other entitlement programs.
Sad when all these liberal social policies are failing around the world and now starting to show up in places like Detroit, Chicago and California in our country people still demand their freebies.
When the SHTF here it ain't going to be pretty.
This country is full of a bunch of candy asses who have no work ethic...I feel sorry for you poor kids....parents babied you, had sports that had no scores, no winners no losers....guess what? Life aint fair and there is no free ride...
Why does every kid want to be a game programmer? Kind of like being a baseball player or musician I guess...Pie in the sky dreams...
Learn a trade...be an electrician or a plumber...
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