Like many Singaporean women of her generation, Santhakumari Palani, 65, worries about not having enough money when she retires.
“I don’t want to depend on my children for my old age,” says the mother of three.
How did she end up in this position?
When she was younger, she spent most of her salary from her various jobs as a senior nurse aide and relief security guard on tuition and other educational expenses for her children. Like most mothers, she wanted her children to have a better start in life.
When she lost her job as a home nurse in March of last year due to the Covid-19 pandemic, she knew she would have to keep working to bolster her savings.
Madame Santhakumari’s story reflects the findings of a investigation by the insurer Great Eastern.
In an effort to shed light on the state of retirement in Singapore, a survey conducted last May of 304 Singapore residents aged 63 and over found that women were less financially prepared for retirement than men.
Ms. Santhakumari spent less than a month looking for a job, before deciding to become a part-time housekeeper.
Today, she is setting aside at least a few hundred dollars for her retirement from her monthly salary of $ 1,300.
Her husband, who is in his late sixties, works as a part-time housekeeper and pays household expenses, while her three children – two of whom are married with families – pay her a monthly allowance when possible, although ‘she does not ask of this. Her children work in education, logistics, and oil and gas.
On what she would have done differently in terms of financial planning, she says: “I wish I had bought a second property or made other investments when I was younger, but it was either that I had not the money at the time or I did not think about it.
On preparing for retirement, she says, “It’s so important to have savings so that you don’t have to worry so much when you’re older.
Investigation sheds light on readiness
The Great Eastern Survey found that, like Santhakumari, women often depend on allowances from their children and family members later in life, with 45 percent of women surveyed relying on these allowances compared to 39 percent among women. men.
When it comes to post-retirement finances, only 18 percent of women had investment income, compared to 31 percent of men.
In addition, only 31 percent of women surveyed were happy with their retirement plans, compared to 44 percent of men.
“These results indicate a lack of financial preparation among women, affecting their independence during their retirement years,” said Mr. Colin Chan, Great Eastern’s general manager for group marketing.
What may compound these concerns is that more women remain single and childless, according to Singapore 2020 census data.
The census found that celibacy has become more prevalent in several age groups over the past decade, with the proportion of single women in the 25-29 age group increasing the most, from 54% in 2010 at 69% in 2020.
“This means that more women are likely to be their only financial contributions later in life. It is therefore important for them to prioritize retirement planning, especially as life expectancy is expected to reach 85.4 years for women in Singapore by 2040, ”said Chan.
“While retirement planning may be a distant concern for many of us, the many uncertainties of recent times affecting people’s job security are a reality.
“We encourage people to start early, no matter their size, so that they can have the freedom to make their own decisions about leading their desired retirement life with the help of professional guidance.”
Seek professional advice as soon as possible
For retirees Lilian Kong, 74, and Cindy Goh, 66, professional advice would have made a significant difference in their retirement plans.
Madame Kong, a widow who retired from her secretary job in 2009, is said to have made more investments for her retirement income.
She currently relies on her savings, payments from the Central Provident Fund (CPF), dividends from a fund she has invested in and allowances from her four adult children for her expenses.
On what she would have done differently, Ms Kong says she regrets not having purchased more private medical insurance in addition to government health insurance plans.
“I haven’t done a lot of retirement planning. If there was one thing I could have planned better, it would have been to purchase additional medical insurance, especially if I have a serious illness. I think I should have spoken to financial advisers when I was younger.
Future medical expenses are also at the heart of Ms. Goh’s concerns.
“I have a life insurance policy, but I should have bought more insurance to cover illnesses and hospital costs. I am in good health now, but it is very difficult to decide on the future.
“I don’t have much in my MediSave account and I’m afraid what I have will not be enough if I have huge medical expenses later on. “
Madame Goh, married and mother of two grown children, retired in 2009 after her sister’s beverage stand where she worked closed.
Now, she depends on her savings spent on the proceeds from the sale of her apartment and on her savings from working at her sister’s hawker stand.
Like many retirees today, she also receives pocket money from her children and CPF payments.
To encourage retirees to become financially independent and allow them to make choices even after retirement, Great Eastern has launched a “Don’t Lose the Freedom to Make Your Own Choices” program campaign, which emphasizes the need for retirement planning.
The campaign includes a financial storyboard tool that can be used to help develop a well-structured financial plan, and the launch of two retirement income products.
Speaking about the campaign, Chan said, “Living well in retirement basically means being self-sufficient and having an income to draw on during our money years.
“We want to help and educate people to plan holistically. This includes examining their long-term care needs as part of their retirement plan and filling gaps in financial planning to meet unforeseen needs that may arise later in life.
Review your retirement needs frequently
Q: Do I need retirement income or can I rely on my savings?
Having an income stream during your golden years can boost your savings and counter rising inflation rates.
The retirement income you need should factor in rising inflation and your retirement lifestyle needs.
For example, if you are 40 now and expect to have a monthly retirement income of $ 2,000, that amount will double to around $ 4,000 – assuming an annual inflation rate of 3% – at age 64.
Review your desired retirement income every two years, as goals and financial needs may change over time.
Q: What is the ideal balance between home / car payments, children’s education and retirement savings?
While it depends on your needs and your financial situation, a healthy total debt-to-service ratio is all about keeping it below 35% of your monthly income.
This means that your home, auto, and other loans should not exceed 35% of your monthly income. Allocate at least 20 percent to planning for your retirement.
To further grow your retirement savings, you can consider retirement income plans and investments.
Q: I put money aside every month and have hospital insurance. Is it sufficient?
If you put your savings only in low yielding savings accounts, the interest rates will not be enough to compensate for the current inflation rate which is between 1 and 2%.
In addition to having an emergency fund of at least six months of your monthly expenses, you should have the basic pillars of protection – hospital and surgery coverage, disability income, critical illness income protection ( first and last stage of serious illness), death and total permanent disability and personal accident protection.
If your investment horizon is medium to long term, you can start with investment-linked plans (which offer wealth building and insurance coverage) or endowment plans (which offer regular payments or lump sum within the stipulated period).
Q: My children have grown up and are financially independent. What should I do to better plan for my retirement while I’m still working?
To get started, identify the gaps based on your financial goals with our innovative financial storyboard tool and the help of a professional financial representative, who should provide a holistic view of your financial situation.
You can also supplement your CPF Vie payments with retirement income plans.
Depending on your risk appetite and stage in your life, you can invest in professionally managed investment products, such as bonds and mutual funds, or choose linked insurance plans. to investments that offer investment and protection components.
– Ms. Corene Toh, Director of Financial Services, Great Eastern
This functionality is brought to you by Great Eastern.