DINKs lag considerably behind parents on the retirement planning indicator

Singapore, 14 November 2024 – The OCBC Financial Wellness Index 2024 has found that DINKs (Dual Income, No Kids) trail parents on 8 out of the 24 OCBC Financial Wellness Index indicators. Notably, retirement planning is a key indicator where DINKs fare considerably worse than parents (score of 33 vs 44). This challenges the popular perception that DINKs – those who are married, engaged or in a serious relationship, and do not have children and do not support their partner financially – are well ahead of parents in all facets of financial wellness as they have no children to support.

These findings were based on an online survey of 2,000 respondents between the ages of 21 and 65 conducted in August this year. The survey assessed how respondents fared on all 24 indicators, which are measurable actions and outcomes representing critical aspects that influence financial health. The indicators are further subdivided into 14 key financial actions or outcomes, 5 financial virtues, and 5 undesirable habits. Notably, DINKs were behind parents on all five financial virtues (see Figure 1 below).

Figure 1: The eight financial indicators where DINKs trail parents

DINKs are less prepared for retirement than parents

Given their dual-income, no-kids status, DINKs may not feel the urgency or need to plan for the long term. 58% of DINKs have not started making financial plans for their retirement. In contrast, only 40% of parents have not done so. Among DINKs without a retirement plan, more than half (55%) indicated that they do not intend to start retirement planning in the next 12 months.

Despite not having retirement plans, such DINKs are not compromising on their dream retirement lifestyles. 1 in 4 DINKs without a retirement plan desire the most expensive retirement lifestyle C (see Figure 2 below). However, almost 9 in 10 DINKs without a retirement plan (85%) underestimate the amount needed for retirement.

They want to retire early as well – just over a third (34%) of DINKs without a retirement plan wish to retire by the age of 55, ahead of the official retirement age of 63. In comparison, only a fifth (22%) of parents without a retirement plan have such aspirations.

Figure 2: Types of retirement lifestyles

DINKs lagging parents on all 5 financial virtues indicators

1. Review financial plans annually
A smaller proportion of DINKs (39%) review their financial plans annually compared to parents (50%).

2. Seek professional advice
Generally, Singaporean investors do well when they seek professional advice. This year, among Singapore investors, 43% of those who sought professional advice had an average rate of return of at least 3% on their investments, which exceeds Singapore’s 2024 average core inflation rate ranging from 2.5% to 3%. Meanwhile, only 32% of those who did not seek any professional advice had an average annual rate of return of at least 3% on their investments.

DINKs however, are not as keen on seeking professional advice. Only 21% of DINKs who invest do so, compared to 32% of parents who invest.

3. Stick closely to a budget
37% of DINKs either do not set a budget at all or do not stick closely to it, a higher proportion than parents (30%). DINKs may not feel the urgency to keep track of their current expenses while parents tend to be more conscientious.

4. Aware of tax relief schemes
Fewer DINKs (53%) than parents (60%) are aware of tax relief schemes.

5. Ensure that finances are passed on in the event of death
Only 57% of DINKs have made arrangements to ensure that their finances are passed on after they die. This contrasts sharply with parents, where 82% of them have done so – understandable given that most parents tend to leave their assets to their children while DINKs, by definition, would not do.

OCBC Financial Wellness Index score rises to 61

The financial behaviours of DINKs and parents are just some of the findings that have surfaced in the 2024 OCBC Financial Wellness Index.

Overall, the OCBC Financial Wellness Index 2024 went up to 61—a one point increase from last year’s score. This development comes amid easing inflation and Singapore’s improving economic growth in 2024.

More Singaporeans are investing and on track with their investment goals, with fixed income assets like T-bills playing a big role
One indicator that bumped up the Index score this year was Investing. The score for this indicator rose to 57 this year, up 6 points from a year ago. This can be attributed to an increasing number of Singaporeans investing this year, with nearly 9 in 10 (88%) now holding investments, a 9-percentage point increase compared to 2023. The starkest increase was observed in the 60s age group. 89% of those in their 60s are investing—a 17-percentage point increase compared to last year (see Figure 3 below). Encouragingly, among investors, 44% of them are on track with their investment goals compared to 40% in 2023.

Figure 3: Singaporeans with investments

Fixed income assets like T-bills have played a big role. Fixed income securities and bonds such as Singapore Savings Bonds and T-bills were the top products held by investors – 43% of investors had such products, up 5-percentage points from a year ago (see Figure 4 below).

Figure 4: Investors’ top 3 product holdings

Gen Zs and young Millennials in their 20s are more inclined to overspend to keep up with their peers
An area of concern in relation to Gen Zs and young Millennials – those in their 20s – is how they are increasingly spending beyond their means to keep up with their peers. More than a quarter (27%) of those in their 20s reported doing this – an all-time high for this age group (see Figure 5 below).

Figure 5: Proportion of those in their 20s who spend beyond their means to keep up with their peers

This may be attributed to their tendency to ‘live in the moment’; 41% of those in their 20s make spontaneous purchases such as concert tickets. This figure is notably higher than other age groups (see Figure 6 below).

Figure 6: Spontaneous purchases based on current desires and impulses

With their spontaneous spending habits, it is unsurprising that 2 in 5 (41%) credit cardholders in their 20s pay only the minimum sum on their credit card. This far exceeds that of other age groups.

Seniors in their 60s are choosing the most basic retirement lifestyle
Since the OCBC Financial Wellness Index was launched in 2019, retirement has consistently been one of the poorest performing indicators. This was the case again in 2024, with the score for retirement coming in at 39.

Only 54% of Singaporeans have started making financial plans for retirement, a 6-percentage point decrease compared to last year. They are also planning for retirement later in life. A quarter of Singaporeans (24%) either intend to start or started planning for their retirement in their 50s or later. According to the survey, this is because they feel that they can just be “thrifty and save up”, “do not want to think too far ahead” or “still have time to start planning”.

As such, Singaporeans are adjusting their expectations as they approach their golden years. A growing number (36%) are opting for the most basic retirement lifestyle A (see Figure 7 below). This is especially pronounced among seniors in their 60s with almost two-thirds (63%) of them choosing this lifestyle – a sizeable 21-percentage point increase compared to last year. This could be because seniors, being closer to retirement, have a better grasp of which lifestyle is attainable given their personal circumstances. Nevertheless, 75% of those in their 60s that chose retirement lifestyle A are still underestimating the amount required to maintain that lifestyle.

Figure 7: Retirement lifestyle chosen by Singaporeans

Ms Tan Siew Lee, Head of Group Wealth Management, OCBC said, “Over the six years that we surveyed Singaporeans, we have identified several enduring trends in their financial behaviours. For one, Singaporeans excel at managing their day-to-day finances, including building savings and managing debt. With the basics covered, and increasing financial literacy, Singaporeans are also increasingly putting their money to work by placing it in investments. However, when it comes to long-term financial goals—retirement planning in particular— this area remains a weakness.

Dual-income, no-kids (DINK) couples, for instance, may overlook the importance of preparing for their future. Regularly reviewing your financial plan can help uncover gaps that might otherwise go unnoticed.

While financial planning can sometimes feel like a solitary endeavour, it does not have to be. Digital planning tools, such as OCBC Life Goals, offer a great starting point to assess your financial situation and identify areas for improvement, or you can seek the guidance of financial professionals. These resources will help in charting your financial strategy and with consistent effort, you will be able to stay on course and reach these goals.”

APPENDIX

DINKs and parents’ financial indicators scorecard