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Speaker 1: You're listening to a CNA podcast. Hello, I'm Andrea Heng.

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Speaker 1: I'm a millennial with just about 25 years to go

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Speaker 1: before I retire, but I have no retirement funds saved

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Speaker 1: up yet.

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Speaker 1: Welcome to the Money Talks podcast, everybody, and we're here

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Speaker 1: to talk about retirement. And let me tell you, retirement anxiety,

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Speaker 1: it's real. You just heard it from me. And especially

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Speaker 1: when you read things like, Singaporeans underestimate how much is

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Speaker 1: needed to retire, or you get messages like, it's never

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Speaker 1: too late, but start now.

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Speaker 1: So how do we know what is enough then and

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Speaker 1: why shouldn't you wait till maybe 50 years old to

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Speaker 1: start saving up your retirement funds? Fellow millennials especially, I'm

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Speaker 1: looking at you. Well, I hope it isn't too late

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Speaker 1: to ask for help now from OCBC's wealth management head, Tanieli.

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Speaker 1: Hello Li. Hello, Andrew. Hi. Uh, so are you afraid

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Speaker 1: for me? Not

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Speaker 1: really. OK, good.

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Speaker 2: Do you have a chance. I have

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Speaker 1: hope.

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Speaker 2: I have a chance. I won't

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Speaker 1: ask your age, but do you have retirement anxiety like

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Speaker 1: I do? Please tell

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Speaker 1: me I'm not the only one.

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Speaker 2: No, I don't have. it's because of my, my occupation,

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Speaker 2: my job, I know that I need to plan for

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Speaker 2: my retirement. So I started planning for my retirement since

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Speaker 2: I started working the first day of work. Yeah, because

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Speaker 2: I know that.

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Speaker 2: You need to plan for retirement early, no matter how

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Speaker 2: small you put aside. Who taught you that?

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Speaker 1: Myself? Wow. And where did you get this idea that

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Speaker 1: I need to.

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Speaker 2: It just it just dawned on me that I need

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Speaker 2: to start. Maybe I don't come from a well to

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Speaker 2: do family. I know I cannot depend on my parent.

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Speaker 2: In fact, I need to start working as soon as

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Speaker 2: I graduate, right, so that I can provide for them.

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Speaker 2: I've got to provide for myself, right? I didn't think

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Speaker 2: of getting married. I just thought of like, you know,

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Speaker 2: I should work very hard. I should make sure that

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Speaker 2: I don't force it.

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Speaker 2: Yeah, right, so insurance is like top of my mind, right?

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Speaker 2: Of course savings, right? And then after that I said, OK,

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Speaker 2: then I need to save some money for my parents

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Speaker 2: and then start saving for retirement no matter how small

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Speaker 2: it is. So it just dawned on me, maybe it's

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Speaker 2: like maybe it's from the right. It's like a fear

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Speaker 2: because it's like if you don't come from a you

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Speaker 2: know well to do families like you need to make

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Speaker 2: sure that everything is A

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Speaker 1: OK. Now you have a survey that says 75% aren't

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Speaker 1: on track with our retirement planning.

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Speaker 1: Just out of curiosity, are we Singaporeans the only ones

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Speaker 1: that are guilty of this? Why

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Speaker 1: is this the case?

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Speaker 2: Um, I don't think Singaporeans are the only ones, although

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Speaker 2: the survey is on Singaporeans, right?

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Speaker 2: It's just the magnitude of it. When we speak to clients, right,

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Speaker 2: or or anyone that we speak to our friends and all,

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Speaker 2: they say, isn't savings a form of retirement planning, but

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Speaker 2: they do not know that there's such thing as inflation,

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Speaker 2: depending on when you save as well and how much

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Speaker 2: you save, right? When you're going to retire. So all

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Speaker 2: these financial talks starts coming up, right? And then people say,

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Speaker 2: I don't understand what you're talking about. So I think

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Speaker 2: it's about the knowledge, right, why we should start planning

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Speaker 2: for retirement right now, especially when you are younger, your

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Speaker 2: your runway is.

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Speaker 2: The power of compounding stronger, right, versus if you start

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Speaker 2: planning at 50 years old, which is what has been

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Speaker 2: revealed in our financial wellness index in 2024, where they

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Speaker 2: say that most of them started planning when they are 15,

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Speaker 2: but yet they are not on track to meet their

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Speaker 2: retirement goals. Why is that so? Because to your point,

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Speaker 2: you only have 25 years to go. If I'm 50,

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Speaker 2: I only have like 15 years. Let's say we take

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Speaker 2: 65 as the retirement age, right? 15 years versus 25

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Speaker 2: years is a huge difference when it comes to compounding. Yes, exactly.

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Speaker 2: That's why we are not on track.

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Speaker 2: And because of this, a lot of my friends at

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Speaker 2: that age actually told me that then I have to

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Speaker 2: scale down my lifestyle, right? Then the next thing they

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Speaker 2: tell us is like, oh, I got my house. It's fine. Yeah,

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Speaker 2: it's fine. So it's like savings, housing, right? Then I said,

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Speaker 2: I said, yes, I do agree that you can probably

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Speaker 2: at a certain age, you can talk about right sizing

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Speaker 2: or downsizing, but that's not the point. Even if I'm

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Speaker 2: willing to downsize or right size, right, I need to

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Speaker 2: find someone to buy my existing house. And we all

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Speaker 2: know how.

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Speaker 2: how lucky you are, it's difficult to find a buyer.

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Speaker 2: It all depends

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Speaker 1: it depends on the age of your house, the condition

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Speaker 1: of your house, what the market is like at the

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Speaker 1: time that you're selling it. I suppose, you know, there

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Speaker 1: are sacrifices that we still do need to make when

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Speaker 1: we start to retire, right? Just to make sure we

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Speaker 1: have enough funds. Your point is we shouldn't be doing

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Speaker 1: that much of a sacrifice by the time you get there, right?

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Speaker 1: So is it normal to think of retirement as this

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Speaker 1: very last item on the checklist, the last

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Speaker 1: Thing to do when we have X amount, right? After expenses,

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Speaker 1: we invest in kids and healthcare and arguably those two

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Speaker 1: are pretty high key for many of us, right? And

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Speaker 1: it seems to me that once these expenses ease up,

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Speaker 1: then I can say, OK, then we can think of

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Speaker 1: retirement now. That's why you end up having people starting

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Speaker 1: to plan for retirement at 50 because their kids are

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Speaker 1: grown up, healthcare sorted, insurance sorted. Why is this an

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Speaker 1: issue though, like that that if we continue to work

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Speaker 1: till 65.

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Speaker 1: And 15 years it is still a runway still, right?

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Speaker 1: That's still something I can leverage though, right?

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Speaker 2: But runway is shorter, right? So you, you may need

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Speaker 2: to set aside more, right, because the runway is shorter,

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Speaker 2: the power of compounding has lessened, set aside more. At

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Speaker 2: that point in time, while we can say that your expenses,

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Speaker 2: your kids' education has been taken care of, but not

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Speaker 2: forgetting age starts creeping in, health issues will start creeping in, right,

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Speaker 2: depending on how serious it is in the magnitude of

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Speaker 2: 1 to 10. So your expenses on that front will

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Speaker 2: start to.

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Speaker 2: Increase. You need to put your money to work faster,

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Speaker 2: which would mean that you need to put your money

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Speaker 2: into riskier investment. But depending if let's say you're not

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Speaker 2: working and maybe you're of OK help but still some issues, right?

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Speaker 2: You can't put your money into very, very high risk

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Speaker 2: investment products to catch up for that lack of time.

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Speaker 1: You want a shorter runway, sure, but you're going to

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Speaker 1: have to

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Speaker 1: shower.

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Speaker 2: We all know that's high risk, high returns, right? And

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Speaker 2: Singaporeans are generally we are not that risk taking when

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Speaker 2: it comes to investment.

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Speaker 1: Absolutely, we're

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Speaker 1: very risk averse. Now, I personally think that millennials tend

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Speaker 1: to be more vulnerable than other generations when it comes

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Speaker 1: to uh planning for retirement, delaying it even because we

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Speaker 1: are the sandwich generation. Uh, we're at the peak of

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Speaker 1: our careers, but our expenses also stretch wider. Do you

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Speaker 1: think millennials are structurally more at a disadvantage to kickstart

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Speaker 1: retirement savings considering cost of living, stagnant wages, perhaps, the

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Speaker 1: fact that we're a sandwich generation?

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Speaker 2: I do not think so. That's my view, because as millennials,

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Speaker 2: in terms of job prospects, right? I think it's better

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Speaker 2: than where our apartments came from when it comes to

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Speaker 2: job prospects. I think the average wage is reasonable, I

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Speaker 2: would say. Retirement planning does not have to take a

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Speaker 2: back seat. You just, like I said, you just need

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Speaker 2: to start. You can start very small, even with

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Speaker 2: $100 a month into a monthly investment plan, that will

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Speaker 2: work as well, right? Because again, I cannot stress enough

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Speaker 2: the power of compounding. So it's not about whether I'm

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Speaker 2: in this age of life, I don't want to talk

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Speaker 2: about planning for retirement because I can, I can do

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Speaker 2: it later. So let me give you an example. When

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Speaker 2: we talked about the Gen Z, you see, I'm very young.

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Speaker 2: I got lots of time. That's not my priority right now.

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Speaker 2: Youth is wasted on the young, they say. Yeah. So

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Speaker 2: I'm like, yeah, it's true, but whatever you have instead

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Speaker 2: of spending, you know, beyond your means to keep up

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Speaker 2: with your peers or something, maybe you should put that

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Speaker 2: sum in maybe $100 to $200 into some retirement plans

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Speaker 2: or something like that. So back to your sandwich generation,

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Speaker 2: it is the same thing. They say that, OK, I

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Speaker 2: need to take care of my parents, you know, I

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Speaker 2: need to take care of my kids, children's education is

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Speaker 2: very important, but that doesn't mean that you have nothing left, right?

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Speaker 2: Instead of going.

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Speaker 2: To a fanciful restaurant once a week, maybe you can

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Speaker 2: do it twice a month so that the sum of

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Speaker 2: money you can put it into a retirement plan, spread

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Speaker 2: it out. So it's not about one or the other.

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Speaker 2: Although in a basic financial planning one on one, we

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Speaker 2: just say that you need to save how much for

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Speaker 2: emergency cash, get your insurance first sorted and then talk

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Speaker 2: about children's education allocation, right? You can always do that

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Speaker 2: at the same time, right? Of course, you don't want

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Speaker 2: to put so much on retirement planning and not being

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Speaker 2: able to enjoy yourself, which leads to mental stress, right?

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Speaker 2: Yeah. So we always say that you just need to

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Speaker 2: spread your funds accordingly.

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Speaker 1: So if you came across a Gen Z personnel in

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Speaker 1: your office today, yet having that same attitude, right? Oh,

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Speaker 1: not yet saving up for retirement, don't want to think

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Speaker 1: about it, don't need to think about it because I

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Speaker 1: have many years left ahead of me. How would you

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Speaker 1: speak in their language to them and tell them, Hey, actually,

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Speaker 1: you should start now, you know, because this and this

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Speaker 1: and this is going to happen. How would you speak

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Speaker 1: to them in their language?

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Speaker 2: I will

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Speaker 2: speak exactly what you say. Come here, sit down, let's

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Speaker 2: have a.

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Speaker 2: Let's have a drink, right? I'll bring them for a drink,

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Speaker 2: not coffee. Let's have a drink and we talked about it,

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Speaker 2: provided my colleague drinks, right? Let's have a drink and

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Speaker 2: talk about it, right? And then I'll start telling them

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Speaker 2: like my life story, of course in a fun way.

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Speaker 2: I kind of realized that if you tell the younger,

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Speaker 2: I have a lot of young Gen Z friends, right, yeah, friends,

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Speaker 2: I call them little friends. Then they call me big friends, right?

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Speaker 2: So big friend, right? So they talk and why you

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Speaker 2: think that they don't really listen, but they do. So

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Speaker 2: I don't nag at them. I'm just like.

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Speaker 2: But you can only do this when there's a certain

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Speaker 2: level of trust in you.

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Speaker 1: Do

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Speaker 1: you have space for one more millennial in your friends,

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Speaker 2: your friends? You want to be my friend? Yes,

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Speaker 1: I would like that. I will give you my number later.

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Speaker 1: Thanks for that. What do Singaporeans typically tend to get

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Speaker 1: wrong when it comes to planning for their retirement savings

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Speaker 1: and how can we unlearn some of these mistakes?

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Speaker 2: It's about priority la. I won't say it's wrong, it's

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Speaker 2: not wrong, it's just

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Speaker 2: That they prioritize one over the other, right? So you

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Speaker 2: need to unlearn by like what I mentioned just now, right,

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Speaker 2: to say that this is not in this chronological order.

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Speaker 2: If your income or situation permits, you should do all

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Speaker 2: things at the same time. After, of course, you still

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Speaker 2: need to set aside 6 months of your, you know,

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Speaker 2: income as emergency cash. After that, you just need to

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Speaker 2: spread out, right? Of course, one of my colleagues told

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Speaker 2: me 1, 13, 1. I said, Where did you get

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Speaker 2: the 11, 1/3? He said that.

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Speaker 2: You know, one in your whatever income you have, one

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Speaker 2: in savings, one in probably investments where you can invest

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Speaker 2: for retirement or children's education for growth, and the other

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Speaker 2: wanted to enjoy yourself. Yeah, so I don't think it's wrong.

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Speaker 2: It's just prioritization. You don't need to sacrifice one over

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Speaker 2: the

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Speaker 2: other.

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Speaker 1: I think that's a very good point to make. A

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Speaker 1: lot of us think that oh it's really

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Speaker 1: One versus the other and that they cannot coexist in

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Speaker 1: your financial life, right? Now, let's get down to the

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Speaker 1: nuts and bolts. What are my must haves when building

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Speaker 1: my retirement savings? Is it enough to depend on, say,

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Speaker 1: my CPF basic retirement sum? Because in monetary terms, we

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Speaker 1: know it all depends on

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Speaker 1: Spending habits. But for someone who has absolutely no idea

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Speaker 1: where to start, is there like a ballpark figure that

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Speaker 1: you can give me? I know I'm putting you on

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Speaker 1: the spot here, but for someone who has no idea

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Speaker 1: how to start, how much would I actually need in

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Speaker 1: numbers?

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Speaker 2: If I looked at it in our financial wellness index

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Speaker 2: for 2024, right? We had three lifestyle. The first basic

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Speaker 2: retirement lifestyle would be like owning and live in HDB property,

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Speaker 2: commutes via public transport.

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Speaker 2: That one is about $2,725 a month, to be exact,

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Speaker 2: very exact. Retirement lifestyle B will be owned and live

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Speaker 2: in HDB property, commutes by a taxi or your own

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Speaker 2: mid-range car, right? Elos part-time domestic helper, right? So that's

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Speaker 2: about $3430 right? For retirement lifestyle C will be owns

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Speaker 2: a high-end car, lives in a private property.

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Speaker 2: And los a full-time domestic helper, that's about $6150. So

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Speaker 2: if you ask me, depending on which lifestyle you want

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Speaker 2: in let's say 25 years' time, we got to factor

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Speaker 2: in inflation into the years, right? If you talk about now,

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Speaker 2: you need $6150 to maintain the lifestyle. So if now

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Speaker 2: let's say your savings per month is only about

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Speaker 2: $3000. It ain't going to work. It ain't gonna work.

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Speaker 2: It ain't gonna work. So what do you need to do, right?

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Speaker 2: If you, of course there are tools out there, many,

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Speaker 2: many tools out there, whether it's it from financial institutions

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Speaker 2: or from digital banks, they will ask you to punch

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Speaker 2: in how much you want. Let's say you punch in

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Speaker 2: $6150 they will tell you this, how much you need

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Speaker 2: like now to invest. So the number always scares a

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Speaker 2: lot of people, right? So when we look back at

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Speaker 2: our statistics.

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Speaker 2: That we have based on the numbers or the landings

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Speaker 2: that have been done by our customers with us, averagely

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Speaker 2: it's about $1.3 million but that was many years back

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Speaker 2: haven't factored inflation. That was like yeah it is a scary.

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Speaker 2: It is a scary number at that point in time,

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Speaker 2: at that point in time was very scary. In fact,

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Speaker 2: I think it was about 1.5 or something. It's scary

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Speaker 2: now probably I don't know, maybe 2.7%. I'm not sure.

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Speaker 2: I do not know, right? We need to punch the calculator.

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Speaker 2: right. So, so is it achievable? The answer is yes.

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Speaker 2: You just need to start now. It's

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Speaker 1: the starting early, yeah. Now I want to talk about

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Speaker 1: life scenarios that may throw us off our retirement savings goals,

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Speaker 1: the kids, elderly parents, mid-career switching, which is quite common

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Speaker 1: and even encouraged for our millennial generation, being out of

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Speaker 1: a job, sometimes curveballs happen, right?

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Speaker 1: And we would say to ourselves, OK, so here's a

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Speaker 1: financial expense that I now need to accommodate, so I

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Speaker 1: have to change my retirement savings goal. Uh, it's a

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Speaker 1: bit of a sacrifice question here, but how do we

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Speaker 1: recalibrate our retirement savings when these things happen? We know

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Speaker 1: it's not the end of the road. How do we

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Speaker 1: prevent ourselves from feeling that it is like the end

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Speaker 1: of the road,

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Speaker 2: it's always around, right? Either it's always good. OK, whenever

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Speaker 2: I told my friends, you should actually review your portfolios.

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Speaker 2: You know, all your plans and all these things, at

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Speaker 2: least half a year, right? Or they say, never mind,

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Speaker 2: minimally a year because I got no time, you know,

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Speaker 2: and say I don't want to spend time talking to

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Speaker 2: a financial advisor, but it helps talking to them, right,

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Speaker 2: because you need to update them. This is like your

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Speaker 2: existing portfolio. Something has happened maybe because I got a

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Speaker 2: new new bond, expenses will be higher, right? and stuff

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Speaker 2: like that, right? So they will help you to recalibrate.

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Speaker 2: They have tools within each financial institution to be able.

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Speaker 2: To assist you to recalibrate your portfolio according to your

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Speaker 2: life stage, according to your risk profile, because once you

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Speaker 2: have a newborn, you can be a client who can

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Speaker 2: take a lot of risk to someone who would take

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Speaker 2: a moderate risk. So they will rebalance your portfolio and

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Speaker 2: then advise you accordingly

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Speaker 1: and not forgetting, of course, tools that are out there

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Speaker 1: that you can help yourself with mortgage things like your

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Speaker 1: CPF tools, your HDB tools, stuff like that as well

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Speaker 1: on top of speaking to the financial institutions. Well, that's

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Speaker 1: really reassuring. Sou Li, before I let you go, any.

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Speaker 1: thoughts, any last pieces of advice that you have for

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Speaker 1: us or for me especially. Yeah,

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Speaker 2: it's important that you need to be aware that you

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Speaker 2: have this retirement anxiety because if you are not aware,

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Speaker 2: then it's very no matter who says what, right, you

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Speaker 2: will never be able to think that retirement planning is

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Speaker 2: a priority. So it's good, you know, enjoy that you

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Speaker 2: have self-awareness that you are really, really anxious about retirement.

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Speaker 2: Well done.

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Speaker 1: Yeah, thank you. I will now kick myself in the

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Speaker 1: butt and start planning ahead and I'll change numbers with you.

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Speaker 1: So you heard what Su Le had to say. Now

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Speaker 1: it's time to put the pedal to the middle. Money

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Speaker 1: Talks is available on Apple Podcasts, Spotify and YouTube as well.

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Speaker 1: Don't forget to rate us and leave us a message.

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Speaker 1: I do read those from time to time. If you've

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Speaker 1: got any feedback or even better if you have an

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Speaker 1: idea for a Money Talks episode. Thanks also to Christina Robert,

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Speaker 1: Tiffany Ang, Junaini Johari, Joanne Chan, Hanida Amin and Saa Winds.

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Speaker 1: Thank you for listening and watching Money Talks. I'm Andrea Hng.