Young Singaporeans are not saving as much as they ought to for retirement. Studies indicate that most of them are just one missed payment away from a financial crisis. For others, it would take as little as three months to plummet from their current social status upon becoming unemployed.
While these findings paint a dire situation, it is slowly emerging that young Singaporeans may have valid reasons as to why they are not saving for retirement. Below are some reasons why young people in the island nation are shunning the culture of saving.
Working For Less
Most young people in Singapore insist they are yet to reach the peak in their careers, where they earn sufficient to set aside some for retirement. Saving for retirement, for many, is only possible when they have secured a stable and well-paying job.
The fact that some of them generate their income from cyclical businesses such as real estate, retail, and hospitality all but continues to complicate the matter. Though some young people in the country are self-employed, some of them are in businesses with wild swings in income. Some of them accumulate wealth during successful seasons and end up spending most of them during slowdowns. For this reason, they are unable to save for retirement.
Pursuing Entrepreneurial Dreams
Unlike in the past, young people in Singapore are shying away from climbing the corporate ladder. Most of them are opting to invest in their startups and businesses from scratch. The entrepreneurial bug is slowly taking over as young Singaporeans look to become their own bosses.
Financing a startup or a business from scratch is not an easy job.
The situation can become even more difficult when one has to support children with a spouse and a mortgage. Saving surplus funds for retirement all but becomes impossible in such situations.
For these reasons, many young people are opting to spend a bulk of their earnings on financing startups and businesses.
Striving For Independence
Nothing stirs young folks than resting assured they are independent. Going back to their parents’ homes after moving out is a no, for many young Singaporeans. Most would rather spend whatever they earn at the start to attain personal and financial independence, rather than think of retirement.
Many have their energy and finances focused on paying rent or a down payment for a home in a bid to attain independence from early on.
‘Do it while you’re young’, is the theme driving most young people in Singapore to the extent of shunning the saving culture. Having fun all in the name of you only live once turns out to be the order of the day. For this reason, most of them end up spending most of their income in short-term life experiences to the extent of failing to save for retirement.
The reality of needing to start saving only kicks in when the young folks settle down and responsibilities start streaming in. Until then, most of them will continue spending big on life experiences, and shun the thoughts of setting aside some finances for retirement.
Still in School & Paying College Debt
A bachelor’s degree nowadays may not cut it if one is to land that dream job. Many employers seek master’s degree holders. For that reason, most young people are spending large sums of money to advance their education level. Spending big on education has seen most young people opt against saving for retirement.
Soaring college loan debts is another headwind that makes it impossible for young people to save for retirement. For starters, young people are foregoing saving for retirement as they seek to pay down nagging college loan debts.