The title of this article was not mistake. This was taken from a recent survey conducted by Manulife Investor Sentiment Index (source: Young Asian adults likely to face cash crunch in retirement, Straits Times 7 March 2017 ) in which 89% of young adults said that they are optimistic about retirement despite the fact that 30% of them saying they expect to run out of money later in life.
Another area of concern is that 45% who intent to purchase properties seek to generate rental income from it.
Comments:
Obviously, this group of young adults are in denial. Perhaps they need to check themselves into a mental institute to have their brains examined! To be optimistic and yet knowing they are going to run out of cash is not only conflicting but dangerous. It means this group of individuals are clinging to false hope. May I ask how are these individuals going to fund their retirement when they run out of cash? Can you please not ask government for money because government’s money is going to come from taxpayers! As it is, the cost of living is already quite high in Singapore. We do not need to have higher taxes to subsidized those who are irresponsible in their lack of retirement planning.
Another area of concerned mentioned in the survey is the continuing focus in using property as a source of passive income. I think it is only in Asia that investors are addicted to property. When they don’t make money from property, they blame the government because they only want to have the upside but not to have the downside.
Here is a correspondence from a retiree who felt that there is no need to plan for retirement because he could retire comfortably without even planning for it:
“Hi Wilfred,
Thank you for your financial advice.
My wife and I are retirees and grandparents of two. We are now living off our passive income from the rent of our fully paid apartments. As a pensioner, my wife and I's medical matters are fully taken care of. We are in our early sixties and enjoying our lives; traveling and learning. We like learning new things like financial management, old age medicals, investment etc.
Haha....you may find it funny, after retirement, then learn them. Yes, it is true. While we are working, there were no time to learn about saving for retirements, health and financial managements matters. Which boss would be happy to give you time to learn and prepare all these things? No, definitely not! Somehow, we decided (true, haphazardly) to retire, not sure whether we are doing fine. Yes, we are, after retiring if we use your gauges.
During this one year of retirement, in between travels, we attended all sorts of seminars, talks and dialogues to learn investment, money management, medical and its cost, CPF, and whatever there is in the market. We also manage our own property portfolios and tenants managements etc. We also assisted our only child-daughter to look after our two grandchildren, age five and six.
Wilfred, to share with you, it seems to me, that everyone is talking about preparing for retirements, how much you need, etc. No one, I repeat no one talks about it now or many years back. I, as a baby boomer and all my peers are already retired. Not many people look into these aspect. In one of the talks, we were challenged so that these insurance folks can visit our homes to survey our insurance policies. It double your coverage and halve your premiums. They came and in the end it was futile.
Thanks for the sharing. – Mr X”
“Mr X,
There is a lot of talk about retirement planning now because this generation of working adults are not able to retire.
In the past, there was no need to plan for retirement because (1) Saving interest was high (2) Cost of living was low and hence there is sufficient surplus cash to save, (3) Affordable housing allowing property investments to be viable and (4) support from children if all things fail. (5) Like yourself, a number of individuals have access to pension.
None of these are available for the current generation of working adults. After doing financial planning for 10 years, I come to the conclusion that if a working person's salary is just average, it is impossible to retire in Singapore. In fact, I've done a number of financial plans which is meant to help my clients migrate to another country. A few of them have migrated already. – Wilfred”
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Most of them (us??) are actually going to depend on their kids for retirement funding. Like it or not, in Singapore (and many other less developed countries) most people & the culture too, has expectations of the kids being the provider of last resort, whether in terms of housing or pocket money or both. Even MSF & the social workers are empowered to initiate Parents Maintenance Act on recalcitrant children if the elderly parents are not sure how to go about it. Makes sense, especially if it’s going to cost govt less to sue the kids for monthly allowance rather than immediately just give welfare to the elderly. Another reason to migrate if you don’t want to handle the bills for your parents in the future haha!!