Mr Christopher Gee, deputy director at the Institute of Policy Studies, said that generally speaking, it is already concerning for someone to not make financial plans for their retirement.
“And particularly so for those who do not have kids, who may not have the familial support from children to take care of them at their old age,” he added. Mr Gee is also senior research fellow and heads the governance and economy department at institute.
TEND TO INVEST MORE AGGRESSIVELY
That said, it is not all doom and gloom for couples without children who have not started on their retirement planning, financial experts said.
Mr Loh Yong Cheng, team lead of the advisory team at wealth advisory firm Providend, said it is not surprising that DINK clients tend to seek retirement planning advice only in their early 40s, whereas couples tend to do so soon after they have children, which for most is before their 40s.
Younger couples in their 20s and 30s who have no children tend to be more focused on their freedom to do whatever they want without the added responsibility of raising children and they tend to indulge in travelling and other activities they enjoy, Mr Loh said.
It is only when they reach their 40s that such couples are more forward-thinking, turning their focus to retirement.
“In your 40s and 50s, you are more vulnerable in life and career opportunities than your younger counterparts. If something happens in your industry, you might need to take a pay cut,” Mr Loh said.
“Most people will enter a ‘countdown mode’ where they worry about how much time they have left at the peak of their career.”
Mr Loh mentioned two advantages that DINK couples have when it comes to retirement planning:
- The flexibility to adjust their lifestyles to save more due to having fewer dependents
- The ability to invest aggressively over a shorter time frame
Ms Karen Tang, a certified financial planner for more than 20 years, observed that DINK couples are more open to investing aggressively and have higher risk appetites compared to couples with children who prioritise hard assets such as real estate that provide long-term security but may not provide higher returns.
That said, couples with no children should not take such advantages or their existing savings for granted and unduly delay their retirement planning either. They should sit down to really take stock of their current finances.
This is because people in general, whether they have children or not, tend to just have a rough estimation of their finances instead of having a clear understanding of their financial state and whether they are on track to meeting their retirement needs.
This causes situations where couples with no children overestimate how much they have for retirement when they eventually consult a financial adviser, Ms Tang added.
As a rule of thumb, those who are planning for retirement should save what they expect to spend and then some, with any buffer money used to counter inflation and pay for emergencies.
Regardless of their marital or parental status, people should start planning their long-term financial and retirement plans early and review them regularly to account for changes in life circumstances.
“A stitch in time saves nine. By not planning on a timely basis, you may miss potential for growth or certain opportunities to take steps to turn your financial plan around,” Ms Tang said.
