Parenthood is increasingly seen as a major financial hurdle in Singapore, with over 40% of respondents in a recent Singlife survey believing that having children will delay their retirement and financial freedom by 14 to 15 years.
Half of the respondents estimate that raising a child in Singapore costs more than S$500,000 from birth to 21 years of age, based on a median monthly expense of S$1,918.
Consequently, 54% of consumers without children say they do not intend to have any, and 80% of those with at least one child say they do not plan to have more.
These figures underscore how the costs of parenthood are reshaping financial goals and delaying milestones like retirement.
This growing burden is part of a broader struggle, as 44% of Singaporeans believe they will never achieve financial freedom, according to Singlife’s 2024 Financial Freedom Index.
The survey, conducted between April and June among 3,000 Singaporeans and Permanent Residents, highlights several significant obstacles to financial security.
Insufficient income, unforeseen expenses, job insecurity, and debt repayment burdens are cited as key factors fueling a sense of financial hopelessness.
With respondents believing they need around S$612,045 to feel financially free—an 8% increase from last year—achieving this goal now seems more daunting.
The survey also reveals that it may take consumers around 30 years to reach financial freedom, up from 27 years in the previous year’s survey.
With median yearly savings dropping to S$20,195, it could take three decades to accumulate enough savings to feel financially secure.
Four in five consumers aim to retire by 65, just above Singapore’s retirement age of 63.
They expect to need a median of S$2,856 per month for living expenses in retirement, highlighting a significant gap compared to their median monthly savings of S$1,682, stressing the need to build up cash reserves.
Nearly 80% plan to retire in Singapore, while a small percentage consider retiring overseas for a lower cost of living, slower pace of life, or better climate, favoring locations like Malaysia, Australia, New Zealand, and Thailand.
Additionally, the survey highlights a significant protection gap. While most consumers have three types of insurance products on average, only 57% report having life insurance and just 38% have critical illness coverage.
The median life insurance coverage is S$286,670, less than half the recommended nine times annual income.
Critical illness coverage averages S$207,238, falling 12% short of the suggested amount.
Although 78% of consumers have at least three months of emergency funds, only 1 in 3 believe they are adequately prepared for unexpected events.
Despite these challenges, the survey offers a glimmer of hope. A slight increase in the number of people who feel they know how to achieve financial freedom provides some optimism.
However, the road ahead remains difficult for many, especially those in their mid-30s to mid-40s, who find it most challenging to attain financial freedom.
Debra Soon, Group Head of Brand, Communications, Marketing and Experience, Singlife said,
“This year’s Financial Freedom Index shows that consumers feel an increasing difficulty in achieving financial freedom. Perception studies are important in helping us understand how to help Singaporeans find a better way to financial freedom.
By understanding the challenges they have to overcome to become financially free, we believe that we can help them plan and take meaningful steps to reach their financial freedom dream, whatever it may be.”
Featured image credit: Edited from Freepik
