The COVID-19 pandemic has triggered Singaporeans to re-evaluate their attitudes towards retirement and retirement planning, with 42 per cent of participants aged 31 to 40 years old cited the pandemic as the “key trigger”, according to a study by Fullerton Fund Management.
The study, which was released on Friday (9 Apr), was polled 1,000 Singaporeans on their evolving perception of retirement.
Retirement, which used to constitute the cessation of working life and “door closing”, is now redefined as a “new life stage” by 8 in 10 Singaporeans as they look towards a meaningful retirement and desire financial freedom to pursue the ideal lifestyle of their choice.
Based on the study, many recognise that it is no longer sufficient to rely on traditional sources of retirement income such as the Central Provident Fund (CPF), with 53 per cent of Singaporeans aged 21 to 40 years old now expecting to get most of their retirement income through investment returns.
Additionally, attitudes towards risk and return are also evolving for younger Singaporeans who have the ability to invest over a long-term horizon, with 64 per cent of those aged 31 to 40 years old saying that they are willing to forego guaranteed capital for higher potential returns.
It also noted that the financial volatility brought about by the pandemic has reminded investors not to put all their eggs in one basket and that there is an appreciation that risk reduction can be achieved by making investment portfolios more resilient through diversification.
Furthermore, the study revealed that over 80 per cent of those aged 21 to 40 years old mentioned that they would have delayed financial planning without online tools and solutions.
More than 90 per cent of those in the same age group also acknowledged that digital tools play an important role in their financial planning process, giving them more confidence in making their financial decisions.
Vincent Chan, head of multi-asset at Fullerton Fund Management, said that integrated and personalised digital tools will play “an increasingly vital role” in Singaporeans’ financial literacy and retirement planning.
“Digital tools and intelligent technologies will also be key in helping consumers manage and formulate their financial plans more effectively,” he added.