Close family ties are eating away at Singaporeans' retirement stash: HSBC

Retirees are giving money to grown kids.

Singaporean retirees are failing to meet their retirement goals due to ongoing and prolonged financial support of family members, according to HSBC's Future of Retirement report.

The report showed that 59% of retired Singaporeans are providing ongoing financial support to dependants and a quarter of these retirees regularly give to grown-up children and grandchildren.

“Singaporean retirees are failing to achieve their retirement aspirations due to financial commitments that have continued into retirement. Singaporeans’ strong family ties are playing a role in the rise of the 'living inheritance’ phenomenon where parents are supporting children into adulthood.This adds another dimension to the already complex financial pressures faced by Singapore retirees,” said Matthew Colebrook, Head of Retail Banking and Wealth Management, HSBC Singapore.

The report also showed that this phenomenon of ‘giving while living’ is creating a chasm between Singaporeans’ desire to leave an inheritance and their ability to do so.

Majority or 66% of Singaporean pre-retirees intend to leave an inheritance to  their children, but only 18% of pre-retirees have received an inheritance. This is significantly lower than the global average of 32% and regional average of 30%.

“There is a widening gap in the inheritance that Singaporeans want to leave and what they actually will. This demonstrates that while 'giving while living' is on the rise, the provision of traditional inheritance may be declining,” Colebrook said.