Key lies in unlocking property value

Last Thursday's article ("Saving too little, too late for retirement") cited a DBS survey which found that middle-income Singaporeans could face hardship when they run out of funds in their later years.

It found a mismatch between their average savings upon retirement and their estimated monthly expenditure for an expected 15 to 20 years of retirement. The survey projected that their savings would last only 13 years.

Indeed, the outlook is dire for those "lucky" enough to live beyond their average life expectancies.

However, the survey also found that respondents put between 40 per cent and 50 per cent of their income into investments and savings.

This is very high by any standard, and can be explained by how Singaporeans place a disproportionately large portion of their savings into property.

So, while their retirement funds seem to fall short, most middle-income Singaporeans would likely have property worth much more. Therefore, the key is to unlock this fixed asset to contribute towards retirement expenditure.

The financial institutions highlighting people's shortfall in their retirement savings are not offering genuine solutions for retirees to monetise their assets, such as through reverse mortgage. Next to MediShield Life, this is probably the area to focus on to ensure that Singaporeans age well.

Geoffrey Kung

This article was first published on July 09, 2014.
Get a copy of The Straits Times or go to for more stories.