According to Singlife, over 40% of Singaporeans see parenthood as a barrier to financial freedom

In Singapore, parenthood is increasingly seen as a major financial hurdle, with over 40% of respondents to a recent Singlife survey believing that having children will delay their retirement and financial freedom by 14 to 15 years.

Half of respondents estimate that raising a child in Singapore from birth to age 21 costs more than S$500,000, with average monthly expenses at S$1,918.

For example, 54% of consumers without children say they do not want to have children, and 80% of consumers with at least one child say they do not want to have any more children.

These numbers underscore how the costs of parenthood alter financial goals and delay important milestones like retirement.

This growing burden is part of a broader problem: According to Singlife's 2024 Financial Freedom Index, 44% of Singaporeans believe they will never achieve financial freedom.

The survey, conducted between April and June among 3,000 Singaporeans and permanent residents, reveals several significant barriers to financial security.

Insufficient income, unforeseen expenses, job insecurity and the burden of debt repayment are cited as major factors that fuel a sense of financial hopelessness.

Respondents believe they need around S$612,045 to feel financially independent – ​​an increase of 8% from last year. Achieving this goal now seems even more difficult.

The survey also shows that it can take about 30 years for consumers to become financially independent, compared to 27 years in the previous year's survey.

With average annual savings falling to S$20,195, it may take three decades to save enough money to feel financially secure.

Four out of five consumers plan to retire at 65, which is just above the retirement age of 63 in Singapore.

They expect to need an average of S$2,856 per month for living expenses in retirement, a significant gap compared to their average monthly savings of S$1,682 and underscores the need to build cash reserves.

Almost 80% plan to retire in Singapore, but a small percentage are considering retiring overseas due to lower living costs, slower pace of life or better climate, with a preference for countries such as Malaysia, Australia, New Zealand and Thailand.

In addition, the survey shows that there is a significant coverage gap. While most consumers have, on average, three different insurance products, only 57% report having life insurance and only 38% have critical illness coverage.

The average life insurance coverage is S$286,670, less than half the recommended nine times annual income.

Critical illness cover averages S$207,238, 12% below the recommended amount.

Although 78% of consumers have an emergency fund for at least three months, only one in three believes they are sufficiently prepared for unexpected events.

Despite these challenges, the survey offers a glimmer of hope. A slight increase in the number of people who believe they know how to achieve financial freedom provides some optimism.

Nevertheless, the road remains rocky for many, especially for those in their mid-thirties to mid-forties, for whom achieving financial freedom is the greatest challenge.

Debra Soon, Group Head of Brand, Communications, Marketing and Experience at Singlife, said:

“This year's Financial Freedom Index shows that it is becoming increasingly difficult for consumers to achieve financial freedom. Perception studies are important to understand how we can help Singaporeans find a better path to financial freedom.

By understanding the challenges they must overcome to become financially independent, we believe we can help them plan and implement meaningful steps to achieve their dream of financial freedom, whatever that may be.”

Photo credit: Edited by Freepik