Millennial Conversation -Dignity

Singaporean millennials are facing a much bleaker retirement prospect. Compared to their baby boomer parents. In a 2009 survey, 80% of baby boomers were optimistic about adequate financial means in old age.

A 2021 study by SYFE, their Retirement Readiness Index (SRRI). Found that millennials had the lowest SRRI scores. Which could stem from their lower savings rate and higher debt levels. This disparity is due to several factors.

First, millennials are earning less than baby boomers were at the same age. The rising cost of living. The increasing competition for jobs and the absence of unionization.

Second, millennials are saving less for retirement. they have less disposable income. It is also because they are more likely to have student debt and other financial obligations.

Third, millennials are living longer than baby boomers. This means that they will need to save more money to support themselves for a longer period.

As a result of these factors, millennials are facing a much greater challenge. Having enough money for a comfortable retirement. The SRRI study found 46% of older millennials say they are saving less than 20% of their salary each month.

This means that many millennials will be forced to work longer in retirement. Or they will have to rely on government help. Either way, in retirement, Millennials face a lower standard of living. Than their baby boomer parents.

There are some things that millennials can do to improve their retirement prospects. They can start saving early. They can invest their money wisely. and they can make lifestyle changes to reduce their expenses. Yet, even with these steps, many will still face a difficult challenge in retirement.

The government has taken steps to help millennials prepare for retirement.

• The majority of the Millennial's CPF is moved to CPF Life
• HDB Leases can be sold to supplement retirement
• No waiting time when downgrading from private property after 55.

From these measures, we find that government support comes from tweaking housing rules. Our retirements are inextricably tied to our property. A millennial has already paid more than the baby boomer for housing costs. The millennial retirement is dependent on the value of Singapore's property remaining buoyant,

If millennials do not take action, the retirement gap will widen. For a grasp of reality, take a look at the baby boomers retiring.

In 2022 the retirement age was pushed to 63. The government has accepted recommendations to extend it to 65 by 2030.

With a longer expected lifespan, the cost of health coverage will greatly increase with age. This will have a significant impact on the Singapore economy. It will lead to a decline in consumption and investment.

Millennials have their advantages.

• Are more aware of the importance of saving for retirement, and are starting to save earlier than their predecessors.
• Have access to a wider range of investment options, which can help them grow their savings.
• May be able to benefit from longer lifespans, which means they will have more time to enjoy their retirement.

Well, the last point may be moot.

Highlighting challenges for Singaporeans.

Speak to a Experienced financial advisor.?Strategy starts with a conversation.

This is a series of 3 articles discussing the Millennial retirement:

1) Millennial Conversation: Disparity

2) Millennial Conversation: Dignity

3) Millennial Conversation: Decency