Retirement at 60: No longer possible?
About two weeks ago, Yahoo! Answers Singapore asked: “Do you think you will be able to retire by 60?” Majority of the 623 who posted replies were quite pessimistic about their prospects. No way, unless one marries rich or wins the Toto, was an oft-cited response.
A good number of posters pointed out that life in the city-state is all about debt – Singaporeans will have to work until they die to pay off their obligations. This perception might be exaggerated, but the argument that debt may hold back retirement at 60 is hard to discount, especially now that prices of HDB flats have risen, and wages haven’t exactly caught up.
“Singaporeans are all ‘paper rich.’ Almost everyone is in debt: Housing, Car, Study, etc…” said one poster that earned agreement from fellow posters. Another poster noted that Singaporeans incur debt starting from the time they study in university to the time they have to buy a house and car.
The increasing cost of living in Singapore is frequently mentioned as a major constraint to achieving retirement goals. “With exorbitant prices of HDB flats… I doubt Singaporeans can even think of retiring,” one poster said. Inflation is high and medical expenses are rising, observed another. A poster said that if Singaporeans went by current estimates of financial planners, he would need to have at least a million dollars to retire at 60.
A fair number thought that retirement at 60 might be possible – if they spend their post-job years in a lower-cost country. “If I take all my money and go abroad I can survive a long time,” asserted one user. Another poster believes Singaporeans with lower incomes will have to “migrate to a third world country” for their retirement. The popular view is that the average-income family cannot enjoy retirement by age 60, believing only the “only the rich can do that.”
Nevertheless, a significant minority said retirement by age 60 is doable, with some posters explaining how they managed to do it through frugal living or key investments.
“Trick is to make your money work hard and not you, work hard,” said one user. Downgrading to a smaller HDB flat will free up funds for retirement was another option mentioned.
Others underscored the importance of lifestyle choices: “I’ve retired at 40…. It’s a lifestyle choice.” “It’s a matter of whether you are disciplined or not.”
One user offered this formula: “Investing + saving + Start early = Retire early.”
Pessimism Or Preparation
Many Singaporeans, however, have not started to plan for retirement though they profess it is a goal. A recent survey of more than 500 fully-employed Singaporeans aged between 35 and 55 revealed that 60% of Singaporeans want to retire by the time they reach 60, but only 40% have made, or intend to make, a retirement plan.
More than half of the respondents fear they will retirement savings not last long enough and run out, and around 70% believe they are “very likely” to turn to part-time employment when they retire.
Simply being pessimistic about the future, however, will do nothing to change it. Ultimately, as some posters recognise, being able to retire at 60 (or when you want) will depend on how you handle your situation now. The higher your income and the lower your household and other expenses, then the more room to save. The earlier you start to prepare and plan, the earlier you can retire.
