For the record, I agree with PM Lee’s views on the aging population. I agree with his proposed changes to the CPF system. When the specific details are announced, I will probably have a few quibbles and disagreements. But by and large, I agree with PM Lee’s general direction.To be frank, there aren’t many alternatives to choose from. PM Lee’s solutions are not at all brilliant. They are quite obvious. It’s a “not-much-choice” situation.
As I poke around the blogosphere, I hear some people mumbling and grumbling. Their dissatisfaction is with the notion that they’re going to have to work to the ripe old age of 62, or 65, or 67. While I understand the sentiment, I think that these people may not be fully appreciating the issues.
The government is not forcing you to work. If you have enough money, you could choose to stop work at 60, or 58, or 55. As a matter of fact, if you have enough money, you could jolly well retire at 35. Come to think of it, I have ex-classmates who had already become tai tai’s at the grand old age of 30.
In all cases, it’s just that a certain portion of your CPF savings (known as the Minimum Sum) will not be available to you, until you reach 62, 65, or 67 years of age. And even then, you won’t get all of the Minimum Sum at one go. You’ll only get a small instalment, every month for the next 20 years (starting from age 62, 65 or 67).
Some people are peeved because they don’t want to wait till they’re 65 or 67, before they start receiving their monthly instalment. They feel that this rule compels them to keep working until they’re 65 or 67. Ideally, they would like to retire instead at, say, 55 or 60.
What do I think? Well, the monthly instalment is quite small. It was never going to make you feel wealthy. The whole idea of this monthly instalment is just to cover your basic survival needs.
For example, if you turn 55 after 1 July 2008 and before 1 July 2009 (and are able to set aside the Minimum Sum in full), then the monthly instalment you’ll get from age 62 onwards is about $416. That works out to about $14 a day. This will cover three square meals at your neighbourhood HDB coffeeshop. And leave you a few dollars for a kopi and an ice kachang.
If you turn 55 after 1 July 2008 and before 1 July 2009 (and are NOT able to set aside the Minimum Sum in full), you will get even less than $416.
Now, suppose you feel unable to retire at your ideal retirement age of 60, if you do not immediately start getting your monthly instalment. Then in my opinion, you really should not retire anyway. If with your own non-CPF savings, you cannot afford your own three square meals per day (plus kopi and ice kachang), from age 60 to age 65 or 67, then you must be quite broke.
You should probably keep working until you hit the then-prevailing official retirement age. And quite possibly, well beyond that.
Remember – the current life expectancy is around 81 years. There’s a 50% chance you’ll live beyond that. And the national life expectancy is still rising, year after year.
Singaporeans need to start adjusting their mindset about work. They also need to start adjusting their mindset about “old” age. The good thing is that we all grow older gradually, day by day, and not all at once. That means we have plenty of time to slowly adjust our mindsets.
Life expectancies in all developed countries have been climbing steadily through the past century, with no sign of leveling off. PM Lee is peering as far as he can into his crystal ball, trying to see what the future might hold. And he’s making plans for that future.
Our error would be to judge and criticize those plans according to our notions of how human society operates today. Because PM Lee is not preparing for today – he’s preparing for quite a distant tomorrow.
Today when we see a 70-year-old woman, frail, bent over, still working hard in a coffeeshop for meager pay, we feel sorry for her. That sympathy is justified. But if today you are 35 years old and live to be 70 years old in the year 2042, it’s quite probable that you will turn out to be rather different from that 70-year-old woman.
Due to medical advances, it is entirely possible that at 70, you will still be fit, healthy and fully functional. With another 35 years of life left in you. If that is the case, you will be quite happy to still be working at the age of 70. Because 35 years is a very long time to be sitting around and waiting to die.
Inevitably, over time, our views about work, and the role it plays in our lives, will also evolve and change. Currently we think of a working life spanning 35 years as “normal”. In time, we may come to think of a working life spanning 50 or 55 years as “normal”. When that happens, how might society change? Here are some possibilities:
Professional blogging, anyone? Sign up for my meditation class? Heheh.(1) Currently, many modern women delay or avoid marriage / having children, so that they can focus on their career. This idea may gradually become redundant, as the length of the average working life increases. When you have 55 years to build your career, and not just 35 years, the idea of putting your career on the backseat for five or six years to prioritise your family life will become much more agreeable.
(2) Constant learning and relearning will naturally become accepted as a way of life. If you are going to work 50 years, you will probably be around long enough to see everything you learned in the first 40 years of your career become completely obsolete in the last 10 years of your career.
(3) It will become quite common to see people in their 40s or 50s go back to university and study for a new degree, in a completely different field from what they had been working. If you qualify as a doctor at the age of 55 but intend to retire at 75, you still have 20 years to practise as a doctor. That’s long enough to justify the opportunity cost of quitting your engineering job to enter medical school at age 48 or 49.
(4) As industries continually emerge, grow, boom, die or reinvent themselves, more people will from time to time be retrenched, made redundant or otherwise become unemployed. Over a 55-year working lifespan, it may become unreasonable for any individual to expect continuous, unbroken employment.
(5) The older workers of the future are not going to be like the older workers of today. A much higher proportion of the older workers of the future will be well-educated, skilled, trained, trainable and retrainable. Consequently, they will be quite able to compete against younger workers. In fact a very young worker with 1 year's working experience may be at a severe disadvantage compared to a very old worker with 54 years of working experience.(6) A new species of workers will emerge – I’ll call them the Life Explorers. These are people who earn, save and invest well, within the 1st half of their working life. They accumulate a pool of income-generating assets (with potential for capital appreciation) sufficient to provide fairly indefinite financial security.
For the next 25 or 30 years of their working lives, the Life Explorers work not so much for the money, but for the fun of working, and for the sake of pursuing their various interests in life. Typically they will turn their hobbies into their jobs, or select jobs related to their hobbies.