How Much Does It Cost To Live In Singapore 30 Years From Now?

Singapore 30 years later - ever wondered how much it would cost then? Constantly ranked as one of the world's most expensive cities¹, the cost and affordability of living in Singapore is undeniably one of our biggest concerns.² With the rising cost of living and inflation at its highest in three years, the prices of necessities and other household expenses are inevitably driven up.³ Take for example housing - a 5 room HDB flat that used to cost approximately S$110,000 now averages at S$552,371 as shown in our previous article "5 Unbelievable Properties You Can (Almost...) Afford With Your HDB". Therefore, understanding and preparing for inflation and its costs is important in allowing us to lead a comfortable lifestyle in Singapore.

(See "Your Must-Have Guide To Term Insurance")

#1 Food

A $3.50 bowl of noodles - this may soon become a thing of the past.

With food inflation at a constant 2.9 per cent, ⁴ this means that food prices in Singapore are increasing at a faster pace than our general inflation rates of 2.65 per cent. ⁵ To reiterate, this means that your S$3.50 bowl of noodles is likely to become S$8.25 after inflation 30 years later. This reflects a staggering 135 per cent increase in price and is more than twice of the current prices.

(See "Are Financial Disasters Your Thing? Here's 4 Mistakes You Must Avoid")

#2 Child's education

As written in our previous article "What Wikipedia Can't Tell You About Your Child's University Education", we showed the hefty costs required for a university degree. However, while pricey, an education could help your child with his/her career, providing him/her with a head start or access to more career opportunities.

According to previous statistics, tuition fees for universities inflate at an average rate of 3.74 per cent yearly. This means that the average university costs in 30 years are likely to be S$28,507 per annum. Three times of the current tuition fees, a degree for your child could then cost you an upwards of S$85,521 for a 3 year programme.

(See "Why Getting A Degree Is Like Being A Penguin")

#3 Retirement

Would you like to live in comfort during your golden years? Proper retirement planning can help you to achieve this. As shown in our previous article "3 Surprising Facts About CPF Life You Probably Didn't Know", your Basic Retirement Sum (BRS) is expected to inflate at a projected rate of 2.971 per cent. This means that the current BRS of $83,000 could possibly become S$199,484 in 2047. With this increase in BRS, it is likely then that you would also require more than the current estimate for your future retirement expenses.

An important first step for retirement planning is to determine your required retirement expenses and account for inflation for the next 30 years. As a general guide, approximately two thirds of your current income is required for you to sustain your present-day lifestyle during retirement.⁶

(See "Are Financial Disasters Your Thing? Here's 4 Mistakes You Must Avoid")

#4 Healthcare

As Singaporeans experience rising life expectancy, we are now expected to live to an older age. ⁷ However, a longer life expectancy could result in increased healthcare expenses with over half a million Singaporeans admitted into the hospital last year.⁸ Moreover, the majority of these hospital admissions comprised of those aged 50 and above.⁹

With medical inflation set at an astonishing 15 per cent¹⁰, the average amount spent on healthcare may potentially rise from S$51,410 to S$3,386,070 in 30 years' time.¹¹ Therefore, it is imperative that we are prepared with adequate savings and/or coverage for our future healthcare expenses.

(See "Do you know that Medical Inflation in Singapore is 15% now? Part 1")

How FSMOne can help you get on track

Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and offer you investment and insurance advice specific to your needs. If you would like assistance in reviewing your financial and protection portfolio, or simply to get a quote for an insurance plan, you can contact our advisers at advisory@fundsupermart.com.

^{1Source: http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-13}

^{2Source: http://sbr.com.sg/economy/news/climbing-cost-living-biggest-concern-among-singaporeans}

^{3Source: http://www.straitstimes.com/business/economy/inflation-in-may-reaches-highest-level-in-three-years}

^{4Source: http://sbr.com.sg/economy/news/low-income-households-burdened-high-food-inflation}

^{5Source: https://tradingeconomics.com/singapore/inflation-cpi}

^{6Source: https://www.cpf.gov.sg/members/schemes/schemes/retirement/cpf-life}

^{7Source: https://www.moh.gov.sg/content/dam/moh_web/PressRoom/Highlights/2016/cos/Life%20Expectancy%20in%20Singapore%20Information%20Note_120416.pdf}

^{8Source: https://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/Admissions_and_Outpatient_Attendances.html}

^{9Source: https://www.moh.gov.sg/content/moh_web/home/statistics/healthcare_institutionstatistics/hospital_admissionratesbyageandsex/Hospital_Admission_Rates_by_Age_and_Sex_2016P.html}

^{10Source: http://www.aon.com/attachments/human-capital-consulting/2016_Med_Report_US_WEB.pdf}

^{11Source: http://www.businesstimes.com.sg/government-economy/tenfold-rise-forecast-in-annual-healthcare-costs-of-elderly-in-singapore-by-2030}

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