A survey conducted by Jobscentral.com.sg (full article here) shows that 2 in 3 Singaporeans save no more than 20% of their income. I’m not sure if this is before or after CPF but I’m assuming it’s ‘before’ since the article says it’s a percentage of monthly income.

If the average Singaporean uses all of his CPF Ordinary Account (CPF-OA) contribution to pay for housing, then it must mean that this 20% of income is in preparation for the conventional concept of retirement. 20% on its own seems pretty ok, that was the proportion recommended in All Your Worth as well.

But the other statistic that was a little disconcerting was this one:

Of the respondents who said they do, these are the common sources of additional income:

1. Dividends from stocks/bonds (37.5%)
2. Freelance projects (28.5%)
3. Part-time jobs (25.3%)

Despite being the most common source of additional income, less than 4 in 10 respondents have income-producing stocks/bonds. This means that 6 in 10 (I’m being generous) Singaporeans should start worrying because in my recent memory, savings deposits or fixed deposits have not returned rates higher than inflation. The fact that most people don’t directly own Stocks/Bonds (also assuming that this means most people don’t have monies in an index fund) mean that there is a pretty low level of financial literacy in Singapore.

Also, we have an aging population which means that when I grow old, there will be a smaller number of working-age people which reduces the number of income-tax paying individuals. That means that social services (if any) will have to be supported in some other way. I don’t plan to count on who I vote to do that for me and neither should anyone.

If your only idea of a savings vehicle now is a savings account/fixed deposit, be prepared to eat fewer burgers in future.