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