The Southeast Asian city-state of Singapore may boast of the highest percentage of millionaires in the world, but retiring in this wealthy financial hub is becoming even more difficult for the common man.



According to a latest study by HSBC, the citizens of this country, which has one of the highest per capita incomes in the world, face the grim prospect of running out of their savings almost halfway through retirement as the high cost of living and increased life expectancy eats into their nest egg.



Singapore has gradually moved up human resources firm Mercer's global rankings of the world's most expensive cities, moving to sixth place in 2012 from eighth in 2011 and eleventh in 2010.



(Read more: Singapore's High Cost of Living May Come at a Cost )

"There is cause for concern from the finding that the retirement savings of people in Singapore will run out after nine years, which is about the time they are entering into frail retirement and a stage of their lives when medical costs and other elderly care expenses are expected to rise," Paul Arrowsmith, head of retail banking and wealth management, HSBC Singapore, said in the report released on Wednesday.



"People are living longer, through tougher economic times, and expectations about their standard of living in retirement have risen," Arrowsmith added.



More than half of the 1,000 Singaporeans interviewed for the survey said that either they were not adequately prepared or not prepared at all for retirement as they expected to continue working beyond the age of 65 to be able to afford their desired lifestyle.



One also needs more money to fund one's retirement in Singapore. According to the study, the annual household income required to lead a "comfortable" retired life in Singapore is the third highest among Asia's major economies, behind Australia and Hong Kong, at $48,773. This figure is 68 percent higher than what was needed in 2011, the survey, which has been running for eight years, found.



The rising cost of living in Singapore has 58-year-old Singaporean Janice Tan worried about her retirement.



"I think the cost of living is really escalating a lot," Tan told CNBC. "During the Chinese New Year season, when I went to buy the goodies, it really shocked me, because the cost is really going up too fast."