You're listening to a CNA podcast. Hello, I'm Andrea Heng. I'm a millennial with just about 25 years to go before I retire, but I have no retirement funds saved up yet. Welcome to the Money Talks podcast, everybody, and we're here to talk about retirement. And let me tell you, retirement anxiety, it's real. You just heard it from me. And especially when you read things like, Singaporeans underestimate how much is needed to retire, or you get messages like, it's never too late, but start now.
So how do we know what is enough then and why shouldn't you wait till maybe 50 years old to start saving up your retirement funds? Fellow millennials especially, I'm looking at you. Well, I hope it isn't too late to ask for help now from OCBC's wealth management head, Tanieli. Hello Li. Hello, Andrew. Hi. Uh, so are you afraid for me? Not really. OK, good.
Do you have a chance. I have
hope.
I have a chance. I won't
ask your age, but do you have retirement anxiety like I do? Please tell me I'm not the only one.
No, I don't have. it's because of my, my occupation, my job, I know that I need to plan for my retirement. So I started planning for my retirement since I started working the first day of work. Yeah, because I know that. You need to plan for retirement early, no matter how small you put aside. Who taught you that?
Myself? Wow. And where did you get this idea that I need to.
It just it just dawned on me that I need to start. Maybe I don't come from a well to do family. I know I cannot depend on my parent. In fact, I need to start working as soon as I graduate, right, so that I can provide for them. I've got to provide for myself, right? I didn't think of getting married. I just thought of like, you know, I should work very hard. I should make sure that I don't force it. Yeah, right, so insurance is like top of my mind, right?
Of course savings, right? And then after that I said, OK, then I need to save some money for my parents and then start saving for retirement no matter how small it is. So it just dawned on me, maybe it's like maybe it's from the right. It's like a fear because it's like if you don't come from a you know well to do families like you need to make sure that everything is A
OK. Now you have a survey that says 75% aren't on track with our retirement planning. Just out of curiosity, are we Singaporeans the only ones that are guilty of this? Why is this the case?
Um, I don't think Singaporeans are the only ones, although the survey is on Singaporeans, right? It's just the magnitude of it. When we speak to clients, right, or or anyone that we speak to our friends and all, they say, isn't savings a form of retirement planning, but they do not know that there's such thing as inflation, depending on when you save as well and how much you save, right? When you're going to retire. So all these financial talks starts coming up, right? And then people say,
I don't understand what you're talking about. So I think it's about the knowledge, right, why we should start planning for retirement right now, especially when you are younger, your your runway is. The power of compounding stronger, right, versus if you start planning at 50 years old, which is what has been revealed in our financial wellness index in 2024, where they say that most of them started planning when they are 15, but yet they are not on track to meet their
retirement goals. Why is that so? Because to your point, you only have 25 years to go. If I'm 50, I only have like 15 years. Let's say we take 65 as the retirement age, right? 15 years versus 25 years is a huge difference when it comes to compounding. Yes, exactly. That's why we are not on track. And because of this, a lot of my friends at that age actually told me that then I have to scale down my lifestyle, right? Then the next thing they tell us is like, oh, I got my house. It's fine. Yeah,
it's fine. So it's like savings, housing, right? Then I said, I said, yes, I do agree that you can probably at a certain age, you can talk about right sizing or downsizing, but that's not the point. Even if I'm willing to downsize or right size, right, I need to find someone to buy my existing house. And we all know how. how lucky you are, it's difficult to find a buyer. It all depends
it depends on the age of your house, the condition of your house, what the market is like at the time that you're selling it. I suppose, you know, there are sacrifices that we still do need to make when we start to retire, right? Just to make sure we have enough funds. Your point is we shouldn't be doing that much of a sacrifice by the time you get there, right? So is it normal to think of retirement as this very last item on the checklist, the last
Thing to do when we have X amount, right? After expenses, we invest in kids and healthcare and arguably those two are pretty high key for many of us, right? And it seems to me that once these expenses ease up, then I can say, OK, then we can think of retirement now. That's why you end up having people starting to plan for retirement at 50 because their kids are grown up, healthcare sorted, insurance sorted. Why is this an issue though, like that that if we continue to work till 65.
And 15 years it is still a runway still, right? That's still something I can leverage though, right?
But runway is shorter, right? So you, you may need to set aside more, right, because the runway is shorter, the power of compounding has lessened, set aside more. At that point in time, while we can say that your expenses, your kids' education has been taken care of, but not forgetting age starts creeping in, health issues will start creeping in, right, depending on how serious it is in the magnitude of 1 to 10. So your expenses on that front will start to.
Increase. You need to put your money to work faster, which would mean that you need to put your money into riskier investment. But depending if let's say you're not working and maybe you're of OK help but still some issues, right? You can't put your money into very, very high risk investment products to catch up for that lack of time.
You want a shorter runway, sure, but you're going to have to shower.
We all know that's high risk, high returns, right? And Singaporeans are generally we are not that risk taking when it comes to investment.
Absolutely, we're very risk averse. Now, I personally think that millennials tend to be more vulnerable than other generations when it comes to uh planning for retirement, delaying it even because we are the sandwich generation. Uh, we're at the peak of our careers, but our expenses also stretch wider. Do you think millennials are structurally more at a disadvantage to kickstart retirement savings considering cost of living, stagnant wages, perhaps, the fact that we're a sandwich generation?
I do not think so. That's my view, because as millennials, in terms of job prospects, right? I think it's better than where our apartments came from when it comes to job prospects. I think the average wage is reasonable, I would say. Retirement planning does not have to take a back seat. You just, like I said, you just need to start. You can start very small, even with $100 a month into a monthly investment plan, that will work as well, right? Because again, I cannot stress enough
the power of compounding. So it's not about whether I'm in this age of life, I don't want to talk about planning for retirement because I can, I can do it later. So let me give you an example. When we talked about the Gen Z, you see, I'm very young. I got lots of time. That's not my priority right now.
Youth is wasted on the young, they say. Yeah. So I'm like, yeah, it's true, but whatever you have instead of spending, you know, beyond your means to keep up with your peers or something, maybe you should put that sum in maybe $100 to $200 into some retirement plans or something like that. So back to your sandwich generation,
it is the same thing. They say that, OK, I need to take care of my parents, you know, I need to take care of my kids, children's education is very important, but that doesn't mean that you have nothing left, right? Instead of going. To a fanciful restaurant once a week, maybe you can do it twice a month so that the sum of money you can put it into a retirement plan, spread it out. So it's not about one or the other.
Although in a basic financial planning one on one, we just say that you need to save how much for emergency cash, get your insurance first sorted and then talk about children's education allocation, right? You can always do that at the same time, right? Of course, you don't want to put so much on retirement planning and not being able to enjoy yourself, which leads to mental stress, right? Yeah. So we always say that you just need to spread your funds accordingly.
So if you came across a Gen Z personnel in your office today, yet having that same attitude, right? Oh, not yet saving up for retirement, don't want to think about it, don't need to think about it because I have many years left ahead of me. How would you speak in their language to them and tell them, Hey, actually, you should start now, you know, because this and this and this is going to happen. How would you speak to them in their language?
I will speak exactly what you say. Come here, sit down, let's have a. Let's have a drink, right? I'll bring them for a drink, not coffee. Let's have a drink and we talked about it, provided my colleague drinks, right? Let's have a drink and talk about it, right? And then I'll start telling them like my life story, of course in a fun way. I kind of realized that if you tell the younger, I have a lot of young Gen Z friends, right, yeah, friends,
I call them little friends. Then they call me big friends, right? So big friend, right? So they talk and why you think that they don't really listen, but they do. So I don't nag at them. I'm just like. But you can only do this when there's a certain level of trust in you.
Do you have space for one more millennial in your friends,
your friends? You want to be my friend? Yes,
I would like that. I will give you my number later. Thanks for that. What do Singaporeans typically tend to get wrong when it comes to planning for their retirement savings and how can we unlearn some of these mistakes?
It's about priority la. I won't say it's wrong, it's not wrong, it's just That they prioritize one over the other, right? So you need to unlearn by like what I mentioned just now, right, to say that this is not in this chronological order. If your income or situation permits, you should do all things at the same time. After, of course, you still need to set aside 6 months of your, you know, income as emergency cash. After that, you just need to
spread out, right? Of course, one of my colleagues told me 1, 13, 1. I said, Where did you get the 11, 1/3? He said that. You know, one in your whatever income you have, one in savings, one in probably investments where you can invest for retirement or children's education for growth, and the other wanted to enjoy yourself. Yeah, so I don't think it's wrong. It's just prioritization. You don't need to sacrifice one over the other.
I think that's a very good point to make. A lot of us think that oh it's really One versus the other and that they cannot coexist in your financial life, right? Now, let's get down to the nuts and bolts. What are my must haves when building my retirement savings? Is it enough to depend on, say, my CPF basic retirement sum? Because in monetary terms, we know it all depends on Spending habits. But for someone who has absolutely no idea where to start, is there like a ballpark figure that
you can give me? I know I'm putting you on the spot here, but for someone who has no idea how to start, how much would I actually need in numbers?
If I looked at it in our financial wellness index for 2024, right? We had three lifestyle. The first basic retirement lifestyle would be like owning and live in HDB property, commutes via public transport. That one is about $2,725 a month, to be exact, very exact. Retirement lifestyle B will be owned and live in HDB property, commutes by a taxi or your own mid-range car, right? Elos part-time domestic helper, right? So that's
about $3430 right? For retirement lifestyle C will be owns a high-end car, lives in a private property. And los a full-time domestic helper, that's about $6150. So if you ask me, depending on which lifestyle you want in let's say 25 years' time, we got to factor in inflation into the years, right? If you talk about now, you need $6150 to maintain the lifestyle. So if now let's say your savings per month is only about $3000. It ain't going to work. It ain't gonna work.
It ain't gonna work. So what do you need to do, right? If you, of course there are tools out there, many, many tools out there, whether it's it from financial institutions or from digital banks, they will ask you to punch in how much you want. Let's say you punch in $6150 they will tell you this, how much you need like now to invest. So the number always scares a lot of people, right? So when we look back at our statistics.
That we have based on the numbers or the landings that have been done by our customers with us, averagely it's about $1.3 million but that was many years back haven't factored inflation. That was like yeah it is a scary. It is a scary number at that point in time, at that point in time was very scary. In fact, I think it was about 1.5 or something. It's scary now probably I don't know, maybe 2.7%. I'm not sure. I do not know, right? We need to punch the calculator.
right. So, so is it achievable? The answer is yes. You just need to start now. It's
the starting early, yeah. Now I want to talk about life scenarios that may throw us off our retirement savings goals, the kids, elderly parents, mid-career switching, which is quite common and even encouraged for our millennial generation, being out of a job, sometimes curveballs happen, right? And we would say to ourselves, OK, so here's a financial expense that I now need to accommodate, so I have to change my retirement savings goal. Uh, it's a bit of a sacrifice question here, but how do we
recalibrate our retirement savings when these things happen? We know it's not the end of the road. How do we prevent ourselves from feeling that it is like the end of the road,
it's always around, right? Either it's always good. OK, whenever I told my friends, you should actually review your portfolios. You know, all your plans and all these things, at least half a year, right? Or they say, never mind, minimally a year because I got no time, you know, and say I don't want to spend time talking to a financial advisor, but it helps talking to them, right, because you need to update them. This is like your existing portfolio. Something has happened maybe because I got a
new new bond, expenses will be higher, right? and stuff like that, right? So they will help you to recalibrate. They have tools within each financial institution to be able. To assist you to recalibrate your portfolio according to your life stage, according to your risk profile, because once you have a newborn, you can be a client who can take a lot of risk to someone who would take a moderate risk. So they will rebalance your portfolio and then advise you accordingly
and not forgetting, of course, tools that are out there that you can help yourself with mortgage things like your CPF tools, your HDB tools, stuff like that as well on top of speaking to the financial institutions. Well, that's really reassuring. Sou Li, before I let you go, any. thoughts, any last pieces of advice that you have for us or for me especially. Yeah,
it's important that you need to be aware that you have this retirement anxiety because if you are not aware, then it's very no matter who says what, right, you will never be able to think that retirement planning is a priority. So it's good, you know, enjoy that you have self-awareness that you are really, really anxious about retirement. Well done.
Yeah, thank you. I will now kick myself in the butt and start planning ahead and I'll change numbers with you. So you heard what Su Le had to say. Now it's time to put the pedal to the middle. Money Talks is available on Apple Podcasts, Spotify and YouTube as well. Don't forget to rate us and leave us a message. I do read those from time to time. If you've got any feedback or even better if you have an
idea for a Money Talks episode. Thanks also to Christina Robert, Tiffany Ang, Junaini Johari, Joanne Chan, Hanida Amin and Saa Winds. Thank you for listening and watching Money Talks. I'm Andrea Hng.