Most of us picture a “modest” retirement in Singapore as coasting around an HDB flat, hopping into a taxi now and then, and taking a couple of regional getaways each year. It feels within reach. Yet a survey conducted by OCBC paints a different reality: 75% of Singaporeans aren’t on track for their desired retirement lifestyle, 37% have no plan at all, and only a quarter are fully aligned with their goals. On average, people underestimate their nest-egg needs by 32%, and millennials miss by nearly 39%. Clearly, something deeper than financial ignorance is at play
As we move through our careers and into midlife, subtle psychological shifts alter how we view time, risk and resources, often to our detriment.
1. Present Bias Deepens
With age, the temptation to prioritise today’s comforts over decades‐ahead needs grows stronger. We tell ourselves “I’ll start saving more next month,” yet next month never truly arrives.
2. Positivity “Filter” Intensifies
Experience teaches us to seek out feel-good moments and avoid bad news. That positivity effect dulls our willingness to confront harsh realities: rising inflation, medical bills, or extended long-term care.
3. Risk Aversion Rises
After years on steady payrolls, many retreat to the safety of cash, CPF and fixed deposits. But with inflation at 2–3% annually, sitting on low‐yield assets quietly erodes real wealth.
4. Status Quo Bias Strengthens
Habits harden. Once we routinely check our CPF statements or stick with a single insurance plan, changing course feels unsettling, even when our current path no longer serves us.
5. Overconfidence in “Safety Nets”
A healthy CPF balance or years of salary credits can breed false security. We overestimate how far these fixed sources will carry us and underestimate episodic costs like major home repairs or eldercare.
6. Cognitive Simplification
Our working memory and numeracy tighten with time. We rely on mental shortcuts, “I just need 70% of my last salary”, which rarely account for longer lifespans or volatile market returns.
Together, these forces leave most Singaporeans blissfully underprepared, shaving off nearly a third of the wealth they’ll actually need. For the 25% of individuals on track to meet their retirement goals, the strategy is often an open secret: they diversify their investments and don't rely solely on CPF Life.
However, knowing the solution is one thing; taking concrete steps to execute it is another. The fear of losing money is a significant emotional barrier, causing many to procrastinate on starting their investment journey. I'm no stranger to this feeling. It took me nearly six months of personal research before I finally made my first investment.
The best advice is to take small, manageable steps. Dedicate time to reading and learning first. Then, open a brokerage account to get the administrative part out of the way. When you're ready, invest a small initial amount and simply observe how you react when the market gets volatile. This process is as much about understanding yourself as it is about understanding the market.
In my previous article, I wrote about the example of a Taiwanese lady who earned just S$1,300 a month but started planning at 29. Through fierce discipline, tracking every dollar, living below her means, and funneling tiny sums into diversified investments, she managed to retire at 43. There was no windfall, no exotic strategy. She simply harnessed the power of early compounding and kept her biases in check. Retirement security isn’t about luck or high salaries, it’s about early planning, discipline, and making tough trade-offs. The real danger isn’t dreaming too big; it’s underestimating the cost of living “just enough.
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