People in Singapore who use professional

financial advisor save close to 50% more

Informal retirement planning here outnumbers formal retirement
planning by 2:1
Cost of property key obstacle derailing efforts in retirement
planning
Over a third ready to dig into retirement savings for short-term
emergencies
Both men and women in Singapore who have consulted a professional
adviser for their retirement planning are accumulating the most in their
retirement savings and investments (S$324,072), 47% more than those
who do not (S$220,383), indicating the presence of a 'planning premium',
according to more findings from HSBC's latest study, the Future of
Retirement: A new reality. A similar positive correlation is also seen
where those who take up formal retirement planning are financially better
off (S$319,937) than those who rely on informal methods (S$257,793)
and those who eschew any form of retirement planning (S$190,744).
The 'planning premium': Seeking professional financial advice has a
positive effect on level of retirement savings and investments

Source: The Future of Retirement: A new reality

Likewise, people in Singapore engaged in formal retirement planning
save more for the future

Source: The Future of Retirement: A new reality
The report, the eighth in the Future of Retirement series of research and
which surveyed more than 15,000 people across 15 countries
1
, aims to
identify people's retirement needs and how they are preparing for it,
providing authoritative insights into key issues associated with ageing
populations and increasing life expectancy around the world. More than
1,000 respondents in Singapore participated in this study.
Close to half (45%) of all respondents in Singapore agree that having a
financial plan helps them save more for retirement compared to 31% who
disagreed. Among those who engage a professional adviser, 55% say they
have saved more for retirement compared to only 43% of those who
depend on their own thoughts and actions, suggesting the superiority of
formal methods of retirement planning in increasing one's retirement
assets.



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Yet, survey respondents here who have benefitted from formal retirement
planning appear to be in the minority. In Singapore, informal retirement
planning outnumbers formal planning by a ratio of two to one (2:1),
where the most popular ways are relying on one's own thoughts (47%),
doing one's own approximate calculations (45%) and drawing up one's
own 'to do' list (35%). Less widespread and practised here are formal
methods of retirement planning such as consulting a professional
financial adviser (22%) and having a written plan routinely reviewed with
such an adviser (13%).
Self-directed retirement planning most prevalent in Singapore

Source: The Future of Retirement: A new reality
Paul Arrowsmith, Head of Retail Banking and Wealth Management,
HSBC Singapore said: "Even though the study has established that
financial planning and professional advice play a positive role in saving
for the future, most shy away from this, preferring self-prescribed modes
of retirement saving. Any form of financial planning, even an informal
one, is a good starting point. The advantage of seeking professional
advice is having a trusted advisor with the right tools and experience to
help assess your risk appetite, chart your wealth goals and assist you with
asset allocation including identifying any savings gaps and blind spots.
Eventually, one should aim to draw up a detailed written savings and
investment plan, and have this reviewed regularly to ensure one is on
track to attain one's desired retirement."



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Respondents in Singapore have cited the costs of buying a home or
paying off mortgages (38%) as the top obstacle which significantly
impacts their ability to save for retirement. Other key roadblocks which
can derail one's retirement saving here are unemployment (29%),
financing children's education (24%) and starting a family (23%),
reflecting the type of tradeoffs people here are prepared to make between
saving up for retirement and other seemingly more important life goals
and pressing day-to-day financial obligations.
The study also reveals why a good two-fifths (41%) of people here have
never saved towards retirement at all. Most claim they are held back by
the cost of day-to-day living (47%), followed by 32% saying they are
saving or investing in a different way and 31% confessing they have
never really thought about it.
Cost of property and mortgage payments is key life event or obstacle
which significantly impacts the ability of people here to save for
retirement

Source: The Future of Retirement: A new reality



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When asked to choose between saving to go on a holiday or towards
retirement, more Singapore respondents (54%) opt to put money aside for
retirement versus 40% who prefer to part with their savings for travel.
While the majority here has prioritised saving for retirement over holiday
plans, a sizeable two-fifths are willing to subordinate their retirement
savings for the short term gratification of a vacation.
Retirement savings are also vulnerable to being eroded to deal with
unexpected crisis situations, with over a third (35%) in Singapore
(compared to 29% globally) admitting they would consider dipping into
their retirement pot to cope with serious financial hardship due to
unforeseen life events.
"Daunting as the challenges to saving for retirement may seem, the study
has shown that a formal and structured approach to retirement planning
can help overcome these obstacles and is more effective in helping to
build up one's retirement assets over the long term. A comprehensive
retirement plan, drawn up as early as possible, can help strike the right
balance between one's needs and wants, allowing one to have the best of
both worlds by achieving both immediate lifestyle needs and long term
goals. This is where professional advice comes in useful to help identify
retirement needs in the horizon and cover all eventualities including
unexpected crises, giving one the assurance and peace of mind," added
Mr Arrowsmith.
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The fear of financial hardship in later life is the consensus reached among
61% (over three-fifths) of respondents here as the top reason motivating
them to save for retirement. On what spurs them to start planning
financially for retirement, more than half (54%) say it is the desire to
achieve a good standard of living in later years. The consistency of both
findings suggests that people here hold certain expectations about their
standard of living during retirement and this is an important driver
spurring them into action.

Walter de Oude, Chief Executive Officer of HSBC Insurance (Singapore)
said: "Interestingly, most people in Singapore are unequivocal in their
aspirations towards a comfortable retirement lifestyle, one in which they
are financially secure. To make this a reality, one should involve more
focused and formal methods of retirement planning, as this survey has
shown. Starting to do this as early as possible will put us in a better
position to deal with the challenges in today's economic uncertainty and
ride out the unforeseen life events safely. Whether seasoned savers or
first time planners, we encourage everyone to review their options early
with their trusted wealth adviser to ensure they are able to lead the
retirement lifestyle they want."

Souice:
BSBC's The Futuie of Retiiement piogiamme is a woilu-leauing inuepenuent
stuuy into global ietiiement tienus. It pioviues authoiitative insights into the
key issues associateu with ageing populations anu incieasing life expectancy
aiounu the woilu. The latest global iepoit, A New Reality, is the eighth in the
seiies anu is baseu on an online suivey of 1S,866 people in 1S countiies. Since
The Futuie of Retiiement piogiamme began in 2uuS, moie than 12S,uuu people
woiluwiue have been suiveyeu.
Ciceio Consulting is a leauing consultancy fiim seiving the banking, insuiance
anu asset management sectoi, Ciceio specialises in public policy consulting as
well as global thought leaueiship anu inuepenuent maiket ieseaich. Ciceio was
establisheu in 2uu1 anu now opeiates fiom offices in Lonuon, Biussels,
Washington anu Singapoie.
As a maiket leauei in pensions anu ietiiement ieseaich, Ciceio uesigneu anu
analyseu the ieseaich anu wiote this iepoit, with Naik Twigg as authoi anu Paul
Niuuleton as ieseaich uiiectoi.
u2 Septembei 2u1S