The poll also found that almost half of the 1,000 respondents (44 per cent) aged 25 to 50 are unprepared for retirement, with those aged 25 to 34 making up 47 per cent of this group. More than 8 in 10 respondents are worried about the increasing cost of living due to inflation (84 per cent) and rising healthcare expenses (81 per cent).
Why are people still leaving or planning to leave their jobs despite the adverse financial implications? One in two (52 per cent) of those who have resigned said they no longer felt engaged at work. Other factors include seeking better career prospects (38 per cent), taking a break for mental wellness (34 per cent) and toxic work environments (34 per cent).
Mr Dennis Tan, Prudential Singapore's CEO, said to fully enjoy and reap the benefits of a career break, one needs to plan for it financially.
"Many people leave their jobs to recharge and rejuvenate. However, without proper financial planning, a career break can result in greater stress and adversely impact one's retirement plans. It is concerning that nearly one in two respondents are unprepared for retirement. With rising lifespans, Singaporeans need to accumulate an even bigger nest-egg so as not to outlive their savings," said Mr Tan.
The silver lining is that people are taking responsible actions to manage the financial impact of their career breaks. One in two respondents would cut their spending by 31 per cent every month, while 6 in 10 respondents (64 per cent) would adjust their lifestyles by dining out, shopping, and watching movies less frequently. Slightly over half of the respondents (51 per cent) said they would take fewer taxi or private hire vehicles.
Preparing for retirement
When it comes to funding for retirement, Singaporeans mainly depend on Central Provident Fund ("CPF") and bank savings, as evidenced by findings in the poll. More than 7 in 10 respondents (73 per cent) listed CPF savings as their top source of retirement income.
The difference between those who are prepared for retirement and those who are not lies in the diversification of their financial portfolio.
68 per cent of people who are confident of having enough to retire said they invested in shares, bonds and Exchange Trade Funds ("ETFs"), and 46 per cent have insurance. On the other hand, only half of the people who are unprepared for retirement have investments, while 36 per cent have insurance.
Commenting on the importance of diversification, Mr Tan said, "Putting your money in different financial instruments, instead of only relying on savings, is important for retirement planning. Diversifying your portfolio also helps spread risk and smooth out volatilities during challenging market conditions. Regardless of how you plan, it is important to start planning early so you have a longer runway to grow your retirement funds."
The poll was commissioned by Prudential and conducted by Milieu Insight.