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How Much Savings Should An Average Singaporean Have Accumulated By A Certain Age?

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Put aside all the “propaganda” you see online today on investing, trading and fanciful financial products. The first step towards financial freedom should always start with savings.

  • If you are someone with a great level discipline to save, great! Kick off your savings routine today!
  • If you are someone who lacks the discipline to save, set up your own system to set aside a portion of your money before it reaches the “leaky bucket”.
    Personal Finance's Leaky Bucket

How much savings should I have accumulated?

To answer this question, I probably have to blatantly visualise your life in front of you.

Instead of coming out with an absolute amount of savings, we base the savings amount on your individual yearly expense. This amount varies for each individual depending on the lifestyle which one chooses to lead.

To give a good projection of how much one needs to save, we took into account these factors:

  • Singaporean male to go through 2 years of National Service (NS)
  • Lower savings rate for early stage in life (lower pay, higher financial commitments such as student loan, marriage and housing loan)
  • Higher savings rate closer to retirement
  • Retirement is at age 62
  • Life expectancy of Singaporean male is 80 and female at 85 years old
 The age that one starts workingYears to save up for retirement
(retire at 62)
Years to enjoy retirement
Male Diploma Graduate
(after NS)
224018
Male Fresh Graduate263618
Female Diploma Graduate204223
Female Fresh Graduate 243823

A typical male fresh graduate – Savings rate

Using a male fresh graduate as an example due to him having the least time to save (36 years to save up 18 years worth of expense). From there, we work backwards to give a projection of how much you should have saved by a certain age.

To get an exact number, simple use:

(How much you need to survive per year) X (Number of years)

 

Age
(Male Fresh Graduate)
Savings RateAnnual Expenses Saved
26-30Low Salary
Clearing Loans
(Very Low)
At least 6 Months
31-35Marriage
Housing Loan
(Low)
At least 1 Year
36-40Kids Education
Housing Loan
(Low)
3-6 Years
41-45Kids Education
(Low)
4-8 Years
46-50Realised you need to SAVE for retirement!
(High)
6-10 Years
51-55Debt free
(High)
7-12 Years
56-62Retirement Planning
(High)
At least 18 Years
Target at age 62:At least 18

A typical female fresh graduate – Savings rate

Taking life expectancy into account, females tend to live longer than their male counterparts. 🙁

With this, female face a steeper saving slope due to the need to save an additional 5 more years worth of expense.

Age
(Female Fresh Graduate)
Savings RateAnnual Expenses Saved
22-25Low Salary
Student Loans
(Very Low)
At least 6 Months
26-30Low Salary
Student Loans
(Very Low)
At least 2 Years
31-35Marriage
Housing Loan
(Low)
At least 6 Years
36-40Kids Education
Housing Loan
(Low)
8-11 Years
41-45Kids Education
(Low)
9-13 Years
46-50Realised you need to SAVE for retirement!
(High)
11-15 Years
51-55Debt free
(High)
12-17 Years
56-62Retirement Planning
(High)
At least 23 Years
Target at age 62:At least 23

Further reading: Are You Saving More Than An Average Singaporean?

Do take note if you fall within the below demographic:

  • Monthly income of S$4,056 (inclusive of employer CPF contributions) and above
  • 25 years old and above

97% of middle to high-income earners above the age of 25 years old are saving between 30% to up to 49% of their salary. How much of your salary are you saving?

Seedly’s Tips: How to determine my best savings rate?

Assuming your determination to save up brought you down so “far” this article, here’s a simple exercise to determine your saving rates.

Taking into account that different individual has different

  • salary
  • financial commitments (housing loans, student loans)

A good exercise to determine your best saving rate is

  1. Start off by saving 10-15% of your salary.
  2. Challenge yourself and increase that savings percentage by 1% every month
  3. Keep doing so till it hurts if you were to increase it by another percentage.
  4. That will be your best savings rate

A simple rule of thumb will be: As your income increases, your savings rate should increase too. This is possible if one’s total expense increases at a slower rate than his income increment.


Tools to help you get there:

  • Enough nagging, but Seedly’s Personal Finance Community is the way to go.
    Ask questions and learn from individuals who have been there done that, and are way ahead in terms of their finances.
  • Knowledge is king.
    Read up on personal finance knowledge. Thank god for all the amazing personal finance blogs we have today, we can easily obtain information and knowledge on our way to work!
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