It Will Become Quite Common To Die Alone & Unnoticed

ST Jan 10, 2008
Man's death goes unnoticed for a year in Sydney

SYDNEY - AN ELDERLY pensioner lay dead in his apartment in Australia's largest city for a year before anyone noticed, officials and news reports said on Thursday.

The body of Jorge Chambe, 64, was found on Tuesday in his single bedroom, government-owned flat in the Sydney suburb of Yagoona when police and firefighters broke in, after concerns about his welfare were finally raised.

Decomposition of the body was advanced and bank records indicated Chambe died about a year earlier, officials said.

'It's amazing,' Detective-Inspector Ian Prye told reporters. 'This guy lives in the suburbs and he dies and no one notices for a year.'

The circumstances of Chambe's death triggered calls for a national strategy to better check on elderly people living alone, and worry that Australians were losing their sense of community.

'How can it happen that a person can die in such a lonely way and no one know?' New South Wales state Housing Minister Matt Brown told the Macquarie Radio network on Thursday.

In news reports, neighbors at the apartment block described Chambe as a quiet man who was friendly but who kept mostly to himself. He had received federal government welfare payments and his rent was paid automatically by direct debit from his bank account.

His mailbox had filled to overflowing, but no one had noticed a smell or other clues that he had died, the reports said. A worried neighbour finally called housing officials on Monday, and authorities broke in when Chambe did not respond.

The above event may seem sad and shocking. However as the years go, we may safely expect such incidents to become increasingly common in developed countries with an aging population. Oh yes, that includes Singapore.

This is the simple consequence of having smaller families, or not having children. The older you grow, the likelier it becomes that you have no relatives at all. You just outlive those who used to be around. This isn’t that difficult, because there weren’t many of them to begin with.

In the 1960s, the average 30-something adult would have, say, one spouse, four children, six siblings, eighteen cousins and too many nephews, nieces and in-laws to easily count.

In 2008, the average 30-something adult would have, say, one or no spouse; one, two or no children; and maybe one or two siblings, each likely to have one, two or no children.

So nowadays, the probability of outliving all your relatives (or all relatives who care about you) is much higher.

During the working years, loneliness is not an issue because working life itself provides a human community comprising bosses, peers, subordinates, clients etc.

Senior citizens, while healthy, can also maintain a social network. They move around on their own, pursue their interests and meet other people (mahjong kaki; qigong group; community club etc).

But over the years, the individual gradually grows older and weaker, and becomes less and less able to participate. He therefore slowly withdraws himself from society. Eventually, he becomes so disconnected from other human beings that he could die (as Jorge Chambe did), and for a whole year, no one would even notice.

To me, Jorge’s story is sad not because he died and his death went unnoticed for a year. The sad part is really more how he must have lived, in the years before he died.

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On CPF, Life, Work and Retirement

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.

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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:

(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.

Professional blogging, anyone? Sign up for my meditation class? Heheh.

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PM Lee & The Aging Population

How can Singapore deal with the financial challenges of an aging population? Sounds like a big problem. However, if you think about it, the available measures are fairly obvious:

(1) Pay higher interest on CPF savings
(2) Delay citizens’ withdrawal from their CPF savings
(3) Encourage Singaporeans to work longer and retire later
(4) Make everyone invest in annuities

Okay, that wasn’t too difficult. The devil is in the details, and the actual mechanics will take plenty of working out. But the “big picture” strategy is fairly clear, and PM Lee announced it in his Rally Speech last night. What Mr Wang will explore today are a few scenarios which PM Lee didn’t explicitly touch on.

During his speech, PM Lee mentioned “longevity risk”. This is the risk that you end up living longer than you expected, and therefore you eventually run short of money to support yourself. Furthermore, a high proportion of Singaporeans in their 20s, 30s and 40s today are choosing not to have children at all. Thus many of them will one day become senior citizens literally without any living relatives at all, to depend on.

Harsh as it may sound, the problem is its own solution.

PM Lee described a future where, thanks to advances in medical knowledge and healthcare, people will live longer and longer, with life expectancies climbing to, say, 90 or 100 years or perhaps even more. However, the implicit assumption is that you are able to afford living to such an old age, or that someone else (your relatives, or the state) will pick up the tab.

If you can’t afford this, and if no one else picks up the tab, well, you die. Death is the simple solution to living too long. That’s the brutal truth. (And it’s not so bad really, everyone has to go someday).

It is not necessarily the case that many old people will not be able to afford food and water, and therefore die alone, of starvation, in their little HDB flats. No, not so dramatic or tragic. A more likely scenario is that as they grow older and their savings gradually run out, they find themselves unable to afford the various medical treatments that would prolong life.

For example, let’s say that you are 75 years old. Your heart has developed a valve problem. The doctors recommend a $50,000 operation. They say that if you don’t go for the surgery, well, you are in no immediate danger, but your heart will probably fail sometime in the next five years. On the other hand, if you do go for the operation, they will plonk a new artificial valve into your heart, and it will probably last you another 20 years.

The question then is whether you can afford $50,000. If you can, you get to live longer, perhaps up to the age of 95 years. If you can’t, you’ll die sometime in the next five years.

So essentially your life expectancy (80 years or 95 years) has become a matter of money. Your life expectancy is a function of the medical care available to you, which in turn is a function of the amount of money you have. Ultimately you die, not of starvation, but of a curable heart condition which you could not afford to cure.

My next point is about the likely pattern of wealth distribution in an aging population. It is often said that in an aging population, the working population (that is, the young and the middle-aged) will end up bearing the heavy burden of supporting (either directly or through paying income taxes) the older retired folks.

This is no doubt true, but is there any silver lining for the younger folks? Let’s consider what happens to a person’s assets when he dies.

If you die with a will, then your assets will go, of course, to whoever you named as the beneficiaries in your will (and most people will name their own relatives as the beneficiaries).

If you die without a will, your assets will be divided according to a very specific order stated in the law. For example, if you have a spouse but no children, the spouse takes all. If you have a spouse and children, the spouse takes half the assets, and the other half is divided among the children. If you have no spouse and no children, but do have certain other relatives, then your assets will go, in a certain order, to your parents, siblings, nephews, nieces, aunts, uncles etc.

Now, assume that birth trends in Singapore don’t undergo any drastic change in the foreseeable future. So our population continues to age rapidly. In an aging population, a relatively high proportion of the general population are in the older age-groups.

This means that if in the year 2040 or 2050, you are a middle-aged working adult in Singapore, then the probability is that you will have many more old relatives than young relatives. In other words, the total number of your parents, uncles and aunties will probably exceed the total number of your siblings and cousins, and almost certainly exceed the number of your children, nephews and nieces.

Now as your older relatives start dying off, you will inherit their assets. You may not have been very close to your Auntie Ling (the one you never bothered to visit even during Chinese New Year). Nevertheless she will give you all her assets when she passes away. Why? Simply because she has no one else to give her assets to. After all, Auntie Ling was a typical Singaporean of her generation – she was an only child (or had only one other sibling, whom she outlived), married late (and also outlived her husband), and never had no children of her own. She was literally all alone in the world, except for you. So after she dies, you get everything.

As the population ages, the combined wealth of a relatively greater number of old Singaporeans will become concentrated (after they die) in the hands of a relatively lesser number of younger Singaporeans. This is in contrast to countries with a young population, where the wealth of the recently-deceased will be divided among a greater number of living people.

So in an aging population, there is some economic “silver lining” for the younger folks, after all. In a sense, this alleviates the economic hardship of the relatively younger section of the population, in supporting the relatively older section of the population.

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Retirement, Money and Singaporeans

A Straits Times article, about retirement, savings and Singaporeans' expectations.

ST Aug 11, 2007
Retire? Not so soon, say many
Singaporeans polled
They need to carry on working because of worries
over insufficient savings
By Lydia Lim

SINGAPOREANS are in no hurry to retire and most want to work beyond the official retirement age of 62, some even into their 70s.

It's a case of 'CPF no enough' for many of these workers.

Seven in 10 polled last month in a Straits Times Insight survey on CPF said they do not think their savings in the national pension fund will see them through old age.

Six in 10 of them said the same of their Medisave funds for hospital bills and specified treatments.

The survey of 636 Singapore residents aged 30 and above found that apart from CPF, 77 per cent expect to be able to draw from other sources of retirement income, mainly savings, investments and insurance.

But a significant minority of 23 per cent had nothing else set aside.

One cause for concern is that only one in two Singaporeans has done any financial planning for retirement.

Even fewer, three in 10, have done their sums on how much they need to squirrel away.

What may mitigate against any resulting savings shortfall is their willingness to work beyond the retirement age of 62. Some two-thirds said they plan to do so.

Of these, one-third are willing to work up to age 65, another third up to age 70 and the remaining third into their 70s.

The journalist has got her thinking hat on backwards. The truth can be stated much more simply. It doesn't really matter what the "official" retirement age is. You will go on working as long as you (a) need the money, and (b) are still able to keep working.

Unless you regard suicide as an alternative, you don't have a choice. What were you thinking - that Singapore is a welfare state?

Blue-collar and lower-income workers are the most likely to want to work longer.
Eight in 10 plan to do so, against six in 10 among professionals, managers, executives and business types, or those drawing more than $3,000 a month.

Older Singaporeans are also more likely to want to work past the retirement age than those in their 30s.

The vast majority - 83 per cent - are however against a recent suggestion by ministers to raise the age when they can draw down their CPF minimum sum. It is currently 62.

The only practical significance of the "official" retirement age is that it is also the age when you can start utilising (in tiny little monthly instalments) your CPF minimum sum. For an explanation of how this works, refer to my old post here.

The survey findings also revealed a good amount of ignorance of the workings of the CPF system. Seven in 10 do not know how much they had in their CPF accounts.
And one in two does not know the rate of return on CPF savings.

Of the half who do, most - 63 per cent - are unhappy with the interest rate, which
stands at 2.5 per cent for Ordinary Account savings and 4 per cent for Special and Medisave Account savings.

The top two changes CPF members would like to see are more flexibility in the use of their money, and a higher interest rate on their savings.

Financial experts and Members of Parliament said it is good that Singaporeans feel no false sense of security over their retirement finances.

Manpower Minister Ng Eng Hen emphasised in an e-mail interview that a critical factor in determining what is enough for retirement is how long people work in relation to how long they can expect to live. Average life expectancy has risen from 61 years when CPF was introduced in 1955, to 80 today.

I believe that in the long run, what will catch many people off-guard is how long they end up living. Life expectancies (except in very poor countries) have steadily been rising over many decades and the curves don't seem to show any sign of topping off.

In 1900, life expectancy at birth in the United States was only 47 years. By year 2000, it had climbed to 77 years (an increase of 30 years). In 1950, life expectancy in China was 35 years. By 2000, it had risen to 71 years.

If you google around to check out what the scientists and doctors have to say about new medical discoveries and research and their implications for how long people are going to live, well, you'd probably be quite startled. Anti-aging medicine has become an industry in itself.

The question is - how long can you afford it? Not the medicine. I mean - life itself. Living 10, 20 years longer than you expected means that you need money to support yourself for an additional 10, 20 years. That's a pretty long time.

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A Quick Note About CPF and Retirement

A reader, Louis Tan, emailed to ask about the implications of the government raising the retirement age from, say, 62 to 65, 67 or 68 years. Yes, this signals to Singaporeans that they are expected to work longer before retiring. Apart from that, does it really mean anything?

Well, yes. It affects your CPF money.

How does the CPF work? You do not get to withdraw all your CPF money when you turn 55. First you must set aside a "Minimum Sum" and leave it in a "Retirement Account" with the government. At age 55, the only CPF money you can immediately withdraw is any excess you have, above the Minimum Sum.

When will you start getting your Minimum Sum back? When you reach the official retirement age. And then only in monthly instalments stretched over 20 years.

This is basically to ensure that in your old age, you can at least afford to buy your own rice and water, so that you do not become a nuisance to the government. Hopefully, you will die within 20 years of your retirement age, before your Minimum Sum runs out. Then the PAP government will not be responsible for your basic subsistence needs.

Now, what happens if the retirement age is raised? Obviously you'll have to wait longer before getting your Minimum Sum monthly instalments. For example, suppose the retirement age is raised from 62 to 68 years. You'll have to wait till you're 68 years old, before you can get your monthly cheque.

Since it is a long wait between your 55th and your 68th birthday, you will feel more motivated to continue working after you turn 55. Otherwise you may not have enough savings to last until your 68th birthday.

How much is the Minimum Sum? Currently it stands at $94,600. It will be slowly raised through the years, until it reaches about $120,000 in the year 2013 ($120,000 figure has not been adjusted for inflation).

If at the age of 55, your total CPF money is less than the then-prevailing Minimum Sum, then you get to withdraw nothing at all. Another reason to keep working.

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The Problem With Error Messages

A reader recently commented that I was "picking bones" with Lee Kuan Yew's speech. The implication was that I was finding fault over small points.

Well, that is that reader's opinion. He's entitled to it. Personally, I think it's important for national leaders to say clearly what they mean. After all, whatever their true intentions may be, their words will simply be disseminated through the mass media into the minds of the general public.

And if the national leader uses inaccurate words, then the danger is that the general public will be infected by inaccurate thinking. Even intelligent people may start thinking inaccurate thoughts.

Here is one example. On the Young PAP blog, there is a post about foreign talent. In the comment section, the YPAP blogger writes as follows:

"Ours is a mere 4 million people state, remember. Our only resource is People. If our women are not producing enough babies to sustain our already depleting talent pool, we have to import them."

Sounds quite familiar, yes? You've definitely heard this reasoning before. For example, in his 2006 National Day Rally, PM Lee Hsien Loong said:

"Two years ago, we introduced major policy changes to encourage couples to have more babies. So far the results have been very modest. I understand why some Singaporeans do not want to have more children. But I have not given up hope and will continue to think of ways to encourage couples to have more babies.

Let me explain why we need new immigrants. To maintain a population of 4 million, Singapore needs at least 50,000 babies a year. Last year, we had 36,000 babies. This means that we are short by 14,000 babies. No matter how hard we try, it would be hard to produce another 14,000 babies. Hence we need to attract more immigrants."

Well, the reasoning is wrong. You see, adults are not babies. Babies are not adults. Before a baby can enter the workforce, it will have to spend 20 to 25 years growing up.

If the talent pool for our workforce is depleting today, it's not because our women are producing too few babies today. It's because our women were producing too few babies 30 years ago. Thanks to the Stop At Two policy in the 1970s implemented by you-know-who.

The YPAP blogger couldn't see that. Well, who can blame her. She probably got misled by PM Lee.

She probably also doesn't see that if today Singapore imports large numbers of foreigners in their 30s and 40s, this only worsens our aging population problem in the year 2030. After all, all those foreigners would be senior citizens in Singapore by then.

I find the aging population issue quite interesting because if you really stop to think it through, you'll see several complex angles to it. Unfortunately, if you only listened to the PAP (or the mainstream media reporting the PAP's views on this matter), you'd never realise that it was complex.

The picture we tend to get is a grossly simplified, straightforward doomsday scenario: "By year 2030, one in five Singaporeans will be over 65! How will our economy survive?! We're dying out!".

And the solutions offered are very blunt: "Import more foreigners! Make more babies!". Sometimes they add: "Your CPF money isn't enough! You'd better save more!"

Did it ever occur to you ......... that if one in five Singaporeans is really over 65 in the year 2030, this could be a perfectly okay situation for Singapore? In a future post, I will elaborate.

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