Singapore parents prioritise children's expenses over retirement: study
Parents spend almost 20% of their income on their children but less than 7% on their own retirement planning.
Young families in Singapore have deprioritised planning for retirement as they are spending 2.5 times more of their monthly expenses on their children’s needs, according to an AIA Singapore study.
Parents spend almost 20% of their income on their children but less than 7% on their own retirement planning, the study revealed. Seven in 10 (70%) also said they intend to either maintain or increase the amount of income allocated to their children’s expenses.
The study also showed that a lack of financial understanding has led to an over-reliance and bank savings. For 92% of Singaporeans, bank deposits are the most popular savings instruments, whilst 21% supplement their bank savings with investment tools.
Nearly one in three Singaporeans’ savings was negatively impacted in 2020, the study said, Singaporeans use at least three tools to manage their savings, with a median amount of between S$251-S$500 set aside monthly for retirement.
In addition, savings priorities tend to be more short term, only focusing on family needs and emergency spending instead of longer-term goals like retirement. In terms of savings goals, emergency spending is the top priority (64%), followed by ensuring financial security for the family (56%).
Amongst young families with kids, 76% intend to leave an inheritance for their children, but only half have started planning for it.