Published 22 February 2011
The Business Times
By Chuang Peck Ming
Policymakers may face even bigger social problem than just labour shortage
POLICYMAKERS pushing Singaporeans to work beyond their retirement age to keep the economy humming are not going to like this: more than one in three Singaporeans want to quit for good even before they hit 60, two years shy of retirement age, says a recent global poll.
The figure is larger than the global average, which is 30 per cent, according to the poll of over 26,000 consumers by marketing research firm The Nielsen Company. But it is smaller than the figure for the Asia-Pacific region, where two in five people want to retire before 60.
In Malaysia, 56 per cent of the consumers – the biggest number in the 53 countries polled – were keen to retire early.
What the poll reveals suggests that policymakers here may face an even bigger social problem than just labour shortage, if more people drop out of the workforce prematurely.
While many Singaporeans want an early retirement – and many have already hung up their work clothes before 60 – many also cannot afford to, at least not comfortably.
Only 14 per cent of the consumers polled here indicated that they are financially ready to call it a day at work, lower than the 22 per cent average for the Asia-Pacific region and 18 per cent for the world. What’s more, almost half – 47 per cent – of the consumers polled admitted that they are not sure if they have the means to retire.
‘Although it seems that many Singapore consumers hope to retire before 60, most of them may not be able to do so comfortably,’ says Joan Koh, Nielsen managing director in Singapore. ‘With the rising costs associated with inflation, some are also unsure about their financial readiness to retire.’
Singapore sure looks like an expensive place to retire than, say, Thailand. Indeed, the poll shows that two in three – 68 per cent – Thais are confident that they can get by nicely with an early retirement.
They topped the poll’s list of nationalities most financially prepared to retire. The Indians (31 per cent) came in second, followed by the Chinese (24 per cent).
At the bottom of the list are the Japanese and South Koreans, both at 10 per cent. It seems rather ironic that people living in less affluent country can afford to retire more easily than those living in richer countries.
‘That’s simply because the cost of living is easier to keep up with in countries like Thailand and India, than in Japan or Singapore,’ one economist observes.
Ms Koh says that Singaporeans also cannot afford to retire early because they are going to live longer.
‘They may need to stay longer in the workforce as their life expectancy increases. In order to retire early, they will be looking to build their nest eggs by exploring alternative sources of income, investment strategies, or cut back on buying non-essential and luxury items.’
The poll shows a large number – 43 per cent – of Europeans indicating that they will depend on government-run plans as their main source of retirement income. About a third – 31 per cent – of Americans said that they will rely on personal savings.
In the Asia-Pacific, 51 per cent of the consumers polled also said that they would fall back on their savings, and 21 per cent on government-run of company retirement plans. Four in five – 82 per cent – Singapore consumers said that personal savings would be their primary source of retirement income.
What do consumers want to do after they retire? Nearly three in four – 73 per cent – of Singapore consumers want to travel, 51 per cent want to do charity work and 49 per cent want to join a club.
‘Singapore consumers are avid travellers and enjoy expanding their horizons,’ Ms Koh says. ‘The increase in the number of budget airlines in the region has made travelling to other countries much more convenient and affordable.’
Most – 66 per cent – in the rest of the Asia-Pacific region also wish to travel after retirement, 46 per cent plan to join a club and 35 per cent indicated that they would take care of their grandchildren.