Researchers from Lee Kuan Yew School of Public Policy calculate sum needed for basic standard of living after focus group dialogues
By Yuen Sin, The Straits Times, 23 May 2019
For the first time, researchers in Singapore gathered people aged 55 and above to talk about what they considered to be their basic standard of living, and calculated that a single man or woman aged 65 and above would need at least $1,379 a month to sustain it.
A couple aged 65 and above would need $2,351.
By Yuen Sin, The Straits Times, 23 May 2019
For the first time, researchers in Singapore gathered people aged 55 and above to talk about what they considered to be their basic standard of living, and calculated that a single man or woman aged 65 and above would need at least $1,379 a month to sustain it.
A couple aged 65 and above would need $2,351.
The researchers, from different institutions, based their calculations only on items that all participants agreed were necessary to them - which they had to justify - and which included occasional inexpensive meals out with family or friends, safe and comfortable homes, and an annual holiday to a nearby place costing about $500.
Left out of the list were things deemed too extravagant, like air-conditioning and a car.
Left out of the list were things deemed too extravagant, like air-conditioning and a car.
Published yesterday, the household budgets study, "What older people need in Singapore", raises a range of policy concerns, said the researchers, as to how the older population would have enough to meet their aspirations.
Among other things, it may not be sustainable for coming generations to rely on family support as a source of retirement income, while basic retirement payouts from the Central Provident Fund (CPF) alone may also be inadequate.
The qualitative study, led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy (LKYSPP) and including Associate Professor Teo You Yenn, head of sociology at Nanyang Technological University, involved focus group discussions with 103 participants from diverse backgrounds. They included people who lived in rental flats as well as private property and a larger representation of some groups, such as minorities and women, for a diversity of views.
In defining a basic standard of living, participants went beyond housing, food and clothing, and included opportunities to education, employment, work-life balance and healthcare. It should also enable a sense of belonging, respect, security and independence and include freedom to participate in social activities, and engage in one's cultural and religious practices.
The list, said researchers, reflected the norms and values held by Singaporeans today.
With a detailed agreed-on list, which included items that were not the cheapest but priced "low" or "average", researchers worked out a budget based on price lists at stores like FairPrice, and consulted experts on the sums needed for expenses such as food and healthcare.
With a detailed agreed-on list, which included items that were not the cheapest but priced "low" or "average", researchers worked out a budget based on price lists at stores like FairPrice, and consulted experts on the sums needed for expenses such as food and healthcare.
The overall shape of the household budgets was strikingly similar to retired households' actual expenditure patterns, said researchers. But the budgets had larger recreation and culture components, and smaller healthcare components, as the study assumed good health.
The study's authors noted that some of Singapore's older population would not have the means to retire, but would have to supplement their incomes through sources such as transfers from family members and personal savings to achieve their desired basic standard.
For instance, while the median monthly work income of full-time workers aged 60 and above was $2,000 in 2017, the median monthly work income of cleaners and labourers in the same age group was $1,200 that year, the study said.
Only 55 per cent of persons turning 55 had enough savings in their CPF accounts to fulfil the Basic Retirement Sum in 2013, meaning that around half will not even receive the basic annuity of less than $800 a month, the study added.
Prof Ng said that while the study did not look into how many people relied only on government assistance and handouts from social organisations to meet these needs, Singapore may face constraints if it continues to promote family as a primary source of income for the elderly, as household sizes shrink.
It is key to ensure that other income sources, such as wages, are adequate, he said.
$1,379 a month for retirement in Singapore: Too much or too little?
Recent study's suggestion that at least $1,379 a month is needed by seniors raises questions
By Yuen Sin, The Sunday Times, 2 Jun 2019
Surviving your golden years on a pittance is one thing but being able to thrive and have an enjoyable retirement is a far bigger challenge, as former odd-job labourer Chow Yit Keong knows all too well.
Mr Chow, 66, began experiencing heart problems two years ago that made it hard for him to lift and carry heavy objects, forcing him to quit his job.
He soon found himself in dire straits. He has no children to look after him and exhausted what little savings he had, from his salary of about $1,000, looking after his father who died a few years ago.
Mr Chow now lives in a one-room rental flat in Tampines and gets by on about $500 a month. About $250 comes from his monthly Central Provident Fund (CPF) payouts and he gets $750 each quarter from the Silver Support scheme, which provides retirement assistance for people who have had low incomes throughout their lives.
This $500 sum that Mr Chow survives on is on a par with the median combined payout that an elderly person aged 65 and above and living in one-or two-room Housing Board flats received from CPF and Silver Support last year.
Like many others in that group, he has also received additional support, such as rental subsidies.
"I mostly eat at home and only go out to the coffee shop or exercise corner nearby to socialise," he says.
"Money can get tight towards the end of the month, but I just have to be thick-skinned and borrow money from my friends to tide myself over."
While Mr Chow has just about enough to make ends meet, a study out last month suggests that he may need more money if he wants to be able to thrive in his golden years, rather than just survive.
"Money can get tight towards the end of the month, but I just have to be thick-skinned and borrow money from my friends to tide myself over."
While Mr Chow has just about enough to make ends meet, a study out last month suggests that he may need more money if he wants to be able to thrive in his golden years, rather than just survive.
The study, which gathered people aged 55 and above in focus groups to talk about what they considered to be their basic standard of living, found that a single person aged 65 and above would need at least $1,379 a month.
A budget like that would allow Mr Chow to buy his own two-room HDB flat instead of having to just make do with his sparsely decorated one-room rental flat and restricting social activities to the cheap and cheerful.
He may also be able to go out for meals in restaurants with friends once in a while, and take an annual vacation to Malaysia or Indonesia.
IS $1,379 A REASONABLE MONTHLY SUM?
Social workers and other observers agree that while $1,379 sets a reasonable basic benchmark for the average Singaporean, the sums seniors need vary from person to person.
Dr Jeremy Lim, a partner at consulting firm Oliver Wyman's Asia-Pacific health and life sciences practice, notes that the study led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy had assumed that a senior would be in good health, so healthcare expenditure was not factored in.
Most seniors can expect to incur some medical expenses in their later years, says Dr Lim, noting that even the MediShield Life scheme, which covers all Singaporeans for their basic hospitalisation needs, requires co-payments.
Jalan Besar GRC MP Lily Neo says $1,379 is "neither too much nor too little" for a senior aged 65 and above who is living alone.
It is fair to have a budget for various social activities for this group, including meals with friends and short trips overseas, she adds.
"You can't stay home all the time as this can lead to isolation and depression, leading to more costs in the long run," notes Dr Neo, a general practitioner.
But this is not to say that those who do not have enough for $1,379 are necessarily deprived.
Dr Neo points out that a number of community care services and help schemes have been rolled out to assist those like Mr Chow who are relying on handouts that may not add up to $1,379.
Such groups have integrated their services so a senior in need will be able to take part in activities, like karaoke, or get home care services and meal deliveries at little to no extra cost.
They can even go on organised day trips to Malaysia at subsidised costs of about $20 to $30 each, she says.
Ms Peh Kim Choo, chief executive of Tsao Foundation, says the profile and needs of elders vary depending on their life experiences, health status and social circumstances.
"As such, $1,379 may not be entirely representative of their needs. However, the study does provide a checklist for us to start a conversation with the elders to understand and know how they might want to live," adds Ms Peh.
DO SINGAPOREANS HAVE ENOUGH FOR $1,379 A MONTH?
It is not clear how many seniors fall short of this $1,379 figure if all their assets and income - including CPF payouts, government subsidies, private savings and income from work or other sources, such as investments, are taken into account.
This is due to the lack of publicly available data on such figures, says labour economist and Nominated MP Walter Theseira.
However, Institute of Policy Studies senior research fellow Christopher Gee points to data from the Household Expenditure Survey done in 2012 and 2013 that gives an approximation.
It found that about 58,300 resident retiree households, comprised solely of non-working people aged 60 and above, had a per capita income of $601 and below.
They fell into the bottom 20 per cent among all households when income from various sources, such as contributions from friends and CPF payouts, was taken into account, though the use of savings was not factored in.
Dr Theseira notes that a National Wages Council report out last week suggested that about 8 to 10 per cent of income earners get less than $1,400 a month.
This group is unlikely to have enough savings to meet the $1,379 threshold when they retire if they continue to earn around the same amount, he adds.
Dr Jamie Phang, cluster director of community eldercare services at Methodist Welfare Services, says that a large percentage of her clients would not be able to meet the $1,379 budget, as the organisation primarily serves the elderly who are from the bottom 10 per cent of the household income group.
"Some of them are unable to retire due to income inadequacy," she notes. "Often, these seniors continue working, sometimes to the detriment of their health, as they do not wish to be a burden to their families or even to social service organisations that extend financial assistance to them."
Some also find it difficult and embarrassing to apply for the financial assistance that they need, she adds.
The household budgets study by Prof Ng cited figures from a 2011 national survey which showed that about 80 per cent of the elderly relied on adult children for financial support.
This dependence is not sustainable in the long run, notes Dr Theseira: "You're just kicking the can down the road, as every $300 to $400 that children give their parents is a sum that they could be saving for their retirement."
But given that each successive generation has had higher educational attainment than others before them, their ability to provide for their needs in old age will improve over time, says Mr Gee.
Manpower Minister Josephine Teo said in February that about 60 per cent of active CPF members, who turned 55 in 2017, have met the CPF basic retirement sum of $83,000, which will give them a monthly payout of about $700 to $750 for life. This is up from 2013, when just 55 per cent of people turning 55 had enough savings in their CPF accounts to fulfil the basic retirement sum.
Despite such strides, there will be those who have been unfortunate and end up unable to meet the basic standards of living, says Mr Gee.
The study could prompt a conversation about how much taxpayers are prepared to pay to support the basic living needs of the less fortunate, beyond mere subsistence, he adds.
"Are (they) comfortable, for example, to pay more in taxes so that an elderly Singaporean might receive sufficient government transfers to enable her to afford the means to remain socially connected or to go on a modest holiday?"
He may also be able to go out for meals in restaurants with friends once in a while, and take an annual vacation to Malaysia or Indonesia.
IS $1,379 A REASONABLE MONTHLY SUM?
Social workers and other observers agree that while $1,379 sets a reasonable basic benchmark for the average Singaporean, the sums seniors need vary from person to person.
Dr Jeremy Lim, a partner at consulting firm Oliver Wyman's Asia-Pacific health and life sciences practice, notes that the study led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy had assumed that a senior would be in good health, so healthcare expenditure was not factored in.
Most seniors can expect to incur some medical expenses in their later years, says Dr Lim, noting that even the MediShield Life scheme, which covers all Singaporeans for their basic hospitalisation needs, requires co-payments.
Jalan Besar GRC MP Lily Neo says $1,379 is "neither too much nor too little" for a senior aged 65 and above who is living alone.
It is fair to have a budget for various social activities for this group, including meals with friends and short trips overseas, she adds.
"You can't stay home all the time as this can lead to isolation and depression, leading to more costs in the long run," notes Dr Neo, a general practitioner.
But this is not to say that those who do not have enough for $1,379 are necessarily deprived.
Dr Neo points out that a number of community care services and help schemes have been rolled out to assist those like Mr Chow who are relying on handouts that may not add up to $1,379.
Such groups have integrated their services so a senior in need will be able to take part in activities, like karaoke, or get home care services and meal deliveries at little to no extra cost.
They can even go on organised day trips to Malaysia at subsidised costs of about $20 to $30 each, she says.
Ms Peh Kim Choo, chief executive of Tsao Foundation, says the profile and needs of elders vary depending on their life experiences, health status and social circumstances.
"As such, $1,379 may not be entirely representative of their needs. However, the study does provide a checklist for us to start a conversation with the elders to understand and know how they might want to live," adds Ms Peh.
DO SINGAPOREANS HAVE ENOUGH FOR $1,379 A MONTH?
It is not clear how many seniors fall short of this $1,379 figure if all their assets and income - including CPF payouts, government subsidies, private savings and income from work or other sources, such as investments, are taken into account.
This is due to the lack of publicly available data on such figures, says labour economist and Nominated MP Walter Theseira.
However, Institute of Policy Studies senior research fellow Christopher Gee points to data from the Household Expenditure Survey done in 2012 and 2013 that gives an approximation.
It found that about 58,300 resident retiree households, comprised solely of non-working people aged 60 and above, had a per capita income of $601 and below.
They fell into the bottom 20 per cent among all households when income from various sources, such as contributions from friends and CPF payouts, was taken into account, though the use of savings was not factored in.
Dr Theseira notes that a National Wages Council report out last week suggested that about 8 to 10 per cent of income earners get less than $1,400 a month.
This group is unlikely to have enough savings to meet the $1,379 threshold when they retire if they continue to earn around the same amount, he adds.
Dr Jamie Phang, cluster director of community eldercare services at Methodist Welfare Services, says that a large percentage of her clients would not be able to meet the $1,379 budget, as the organisation primarily serves the elderly who are from the bottom 10 per cent of the household income group.
"Some of them are unable to retire due to income inadequacy," she notes. "Often, these seniors continue working, sometimes to the detriment of their health, as they do not wish to be a burden to their families or even to social service organisations that extend financial assistance to them."
Some also find it difficult and embarrassing to apply for the financial assistance that they need, she adds.
The household budgets study by Prof Ng cited figures from a 2011 national survey which showed that about 80 per cent of the elderly relied on adult children for financial support.
This dependence is not sustainable in the long run, notes Dr Theseira: "You're just kicking the can down the road, as every $300 to $400 that children give their parents is a sum that they could be saving for their retirement."
But given that each successive generation has had higher educational attainment than others before them, their ability to provide for their needs in old age will improve over time, says Mr Gee.
Manpower Minister Josephine Teo said in February that about 60 per cent of active CPF members, who turned 55 in 2017, have met the CPF basic retirement sum of $83,000, which will give them a monthly payout of about $700 to $750 for life. This is up from 2013, when just 55 per cent of people turning 55 had enough savings in their CPF accounts to fulfil the basic retirement sum.
Despite such strides, there will be those who have been unfortunate and end up unable to meet the basic standards of living, says Mr Gee.
The study could prompt a conversation about how much taxpayers are prepared to pay to support the basic living needs of the less fortunate, beyond mere subsistence, he adds.
"Are (they) comfortable, for example, to pay more in taxes so that an elderly Singaporean might receive sufficient government transfers to enable her to afford the means to remain socially connected or to go on a modest holiday?"
Worries over retirement income
By Tan Ee Lyn, Senior Correspondent, The Sunday Times, 2 Jun 2019
Working hard all your life does not mean you will have enough saved to enjoy your golden years - a distressing outcome highlighted in a new survey.
It found that around 60 per cent of retirees say they have a monthly income of at least $1,379, an amount experts recently recommended as necessary for a basic standard of living.
But among the remaining 41 per cent, the online poll noted that 28 per cent of the group say they fall short by at least half the recommended amount.
And 52 per cent of the group with less than $1,379 say they expect help from their children while 55 per cent are looking to government assistance or charities.
The online poll was commissioned by The Sunday Times and carried out last week by consumer research firm Milieu Insight.
It surveyed two groups - one comprising 553 residents over 45 (18 per cent are retirees); and the other, 1,407 residents between 25 and 40.
The poll is representative of the national demographics for the two age groups.
Among the retirees, 62 per cent say $1,379 is either "more than enough" or "just nice", while 38 per cent feel the amount is inadequate.
The poll found that 58 per cent of respondents over 45 who are not retirees say the amount is insufficient, while 51 per cent say they are not confident they would have $1,379 a month to live on by the time they retire.
Retirees have various sources of income: 69 per cent cite a mix of savings and other assets; 49 per cent have contributions from children or relatives; 38 per cent have Central Provident Fund (CPF) savings; and 13 per cent receive government assistance or donations.
Interestingly, folk over 45 who are still working feel they need to depend more on savings and other assets or CPF (both are cited by 78 per cent), while only 29 per cent say they would depend on children or relatives, and 23 per cent mention government assistance or donations.
The online poll follows the household budget study led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy which found that a single person in Singapore aged 65 and above would need at least $1,379 a month to sustain a basic standard of living.
FINANCIAL PRESSURE
The help children give their parents was also reflected in the poll. It noted that 59 per cent of respondents aged 25 to 40 say they and their siblings can contribute up to a combined $600 to each of their parents, 31 per cent can give a combined amount of between $601 and $1,200 to each parent, while 10 per cent can give more than $1,200.
A notable 60 per cent of the younger age group are worried they would not have enough for themselves if they continue to support their parents in the future, given job instability, illness and having to support children of their own. Such worries are all too real for older people who are still working.
Researcher Magdalen Yeo, 52, hopes to retire at 55 but as she needs to support her two teenage sons through university as well as her parents, she thinks she will need to work until at least 65.
Her husband, a former civil servant in his 50s who took time off work two years ago to look after their younger son, is now trying to rejoin the workforce.
"I don't feel prepared for retirement at all. I live from month to month as a single-income household," said Mrs Yeo, who has to monitor her health regularly due to a heart condition.
Associate Professor Tan Ern Ser of the sociology department at the National University of Singapore said the worries expressed by the younger group of respondents stemmed from them not feeling financially secure themselves.
He highlighted a past study on financial adequacy among seniors: "In my co-authored 2011 study, one out of four seniors (and near seniors) aged 55 years or older reported 'perceived current financial inadequacy' and almost one out of three reported 'perceived future financial inadequacy'.
"The top two reported reasons they gave were high costs of living and their own low income," he added. "I am not surprised that the proportion reporting 'financial inadequacy' is double digit, though the actual figures may be contested. I believe a more thorough study is needful, given that (around) 40 per cent is obviously a significantly high figure."
By Tan Ee Lyn, Senior Correspondent, The Sunday Times, 2 Jun 2019
Working hard all your life does not mean you will have enough saved to enjoy your golden years - a distressing outcome highlighted in a new survey.
It found that around 60 per cent of retirees say they have a monthly income of at least $1,379, an amount experts recently recommended as necessary for a basic standard of living.
But among the remaining 41 per cent, the online poll noted that 28 per cent of the group say they fall short by at least half the recommended amount.
And 52 per cent of the group with less than $1,379 say they expect help from their children while 55 per cent are looking to government assistance or charities.
The online poll was commissioned by The Sunday Times and carried out last week by consumer research firm Milieu Insight.
It surveyed two groups - one comprising 553 residents over 45 (18 per cent are retirees); and the other, 1,407 residents between 25 and 40.
The poll is representative of the national demographics for the two age groups.
Among the retirees, 62 per cent say $1,379 is either "more than enough" or "just nice", while 38 per cent feel the amount is inadequate.
The poll found that 58 per cent of respondents over 45 who are not retirees say the amount is insufficient, while 51 per cent say they are not confident they would have $1,379 a month to live on by the time they retire.
Retirees have various sources of income: 69 per cent cite a mix of savings and other assets; 49 per cent have contributions from children or relatives; 38 per cent have Central Provident Fund (CPF) savings; and 13 per cent receive government assistance or donations.
Interestingly, folk over 45 who are still working feel they need to depend more on savings and other assets or CPF (both are cited by 78 per cent), while only 29 per cent say they would depend on children or relatives, and 23 per cent mention government assistance or donations.
The online poll follows the household budget study led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy which found that a single person in Singapore aged 65 and above would need at least $1,379 a month to sustain a basic standard of living.
FINANCIAL PRESSURE
The help children give their parents was also reflected in the poll. It noted that 59 per cent of respondents aged 25 to 40 say they and their siblings can contribute up to a combined $600 to each of their parents, 31 per cent can give a combined amount of between $601 and $1,200 to each parent, while 10 per cent can give more than $1,200.
A notable 60 per cent of the younger age group are worried they would not have enough for themselves if they continue to support their parents in the future, given job instability, illness and having to support children of their own. Such worries are all too real for older people who are still working.
Researcher Magdalen Yeo, 52, hopes to retire at 55 but as she needs to support her two teenage sons through university as well as her parents, she thinks she will need to work until at least 65.
Her husband, a former civil servant in his 50s who took time off work two years ago to look after their younger son, is now trying to rejoin the workforce.
"I don't feel prepared for retirement at all. I live from month to month as a single-income household," said Mrs Yeo, who has to monitor her health regularly due to a heart condition.
Associate Professor Tan Ern Ser of the sociology department at the National University of Singapore said the worries expressed by the younger group of respondents stemmed from them not feeling financially secure themselves.
He highlighted a past study on financial adequacy among seniors: "In my co-authored 2011 study, one out of four seniors (and near seniors) aged 55 years or older reported 'perceived current financial inadequacy' and almost one out of three reported 'perceived future financial inadequacy'.
"The top two reported reasons they gave were high costs of living and their own low income," he added. "I am not surprised that the proportion reporting 'financial inadequacy' is double digit, though the actual figures may be contested. I believe a more thorough study is needful, given that (around) 40 per cent is obviously a significantly high figure."
All have role in helping the elderly age with dignity
By Mary Ann Tsao, Published The Straits Times, 11 Jun 2019
A recent study released by the Lee Kuan Yew School of Public Policy triggered a discourse on the amount of money a relatively healthy older person will need today to have a minimum standard of living that goes beyond the basics of housing and food.
When the Tsao Foundation, which I chair, funded this study, the aim was to give older people a voice and allow us to hear what they need and consider as the minimum standard of living - a standard that they feel will give them a sense of belonging, respect, security, independence and participation.
What was most useful about this study was not the dollar amount the survey found to deliver this minimum standard, but the fact that we heard directly from older cohorts what they needed to enjoy quality of life.
The study found that $1,379 per month is needed for a relatively healthy single older person aged around 65 to meet a decent standard of living. This has generated spirited discussion on whether this amount is too little, too much or just enough. At the same time, we hope the study will give Singaporeans food for thought to reflect, in more concrete terms, on what their expected quality of life is in later life and to plan accordingly.
For people in their 40s and 50s, financial planning for their future is critical, especially given Singaporeans' increasing longevity well into their 80s. For those who are near retirement age, the study provides a framework to help them determine how much they will need and how much longer they may wish to work and earn, and think more proactively about savings and investments.
Planning for old age is not just for the individual, but also for the family. For many older people today, their family is their old-age financial plan.
With little educational opportunities in their youth, many among the older generation laboured to raise and educate their children so that the next generation could have a brighter future. As a result, many of today's elderly people have relatively little savings of their own and are dependent on the family.
The study prompts families to have a conversation and for grown-up children to discuss their parents' aspirational quality of life and explore how to meet this standard.
Shrinking family size, however, does challenge this reliance on family for old-age income. While inter-generational solidarity remains strong in Singapore, having fewer children to share the cost of support does strain family finances, especially with longer life expectancy.
A study by the Institute of Policy Studies (IPS) showed that all generations felt strongly that the responsibility to care for older parents remains with the family. However, that sense of support is less strong with those in the sandwich generation, most likely due to the real strain they experience in providing for their children and parents.
Since 1993, the Tsao Foundation has been innovating and providing a range of community-based health and social services to meet the needs of older people in Singapore. Some have no children, some live alone, while others live with their families. As we are a non-profit group, most of the elders we serve are poor or have modest means; in this regard, we are deeply familiar with their social and financial circumstances.
For older people with limited or no means, a basket of financing generally covers basic daily living needs, as well as their health and social care expenses: this typically comes from government subsidies and grants, their own money if they work, family income and donations. While this basket of financing is usually adequate to pay for necessities, there is little money left for anything else.
The situation is similar for those whose income level just misses subsidy eligibility.
Given longer lifespans and smaller families, the state needs stronger support for elders, but the rest of us in society must also step up.
The community and the non-profit sector must look beyond the traditional practice of just focusing on meeting basic needs, and address a standard of living that embraces dignity and respect. Some initiatives are already happening. Habitat for Humanity ensures that older persons' housing is not just a roof over their heads, but a comfortable home. Tsao Foundation's Cafe Kawan in Whampoa Community Club is a home away from home, where older people can meet and make friends, find a listening ear, discover and learn new interests.
Finally, the private sector must do more to make the life of current and future generations of older people better. Companies can provide more age-inclusive practices, such as having eldercare leave for staff who do not have small children but have older parents to look after.
Employers need to have fair human resource management practices. According to the same IPS study, a survey of working people of all ages noted that ageism is rampant in the workplace. Companies need to hire, compensate and retain according to roles and abilities rather than age, with equal opportunities for learning and career development for older workers.
International studies have shown that older workers have lower absenteeism and make fewer mistakes than younger co-workers, and, contrary to common belief, older workers can be retrained, though they need to be trained differently.
With a decreasing pool of younger workers due to a falling birth rate, employers must awaken to a new demographic reality and adapt the workplace for older workers. If elders are able to work longer with fair pay and earn more, they will be better able to have sufficient funds to meet a minimum standard of living in their later lives.
Just as it takes a village to raise a child, it takes the same attitude and effort to ensure that all of our elders can live with dignity. We should not allow some to live poorly. Collectively as a society, Singapore - with all its wealth - must ensure that its people get to enjoy a decent standard of living in their old age, when they are no longer able to create a better material future for themselves.
Mary Ann Tsao is chairman of the Tsao Foundation, a non-profit organisation that works on ageing issues.
* Future cohorts of seniors will have more resources to retire on
Improvements in education, incomes will make this possible despite the ageing population and smaller family sizes: Govt
By Yuen Sin, The Straits Times, 8 Jul 2019
A major source of financial support for retiring Singaporeans - their family members - is coming under strain, due to the ageing population and smaller family sizes, says the Government.
That notwithstanding, future cohorts of seniors will still have more resources to retire on due to improvements in education and incomes over the years.
This was a key thrust in a joint statement issued by the Ministry of Manpower (MOM) and Ministry of Social and Family Development (MSF) last week to The Straits Times when asked to comment on a recent study on retirement adequacy.
MOM's director for retirement systems Shaun Goh said: "Retirement adequacy through the Central Provident Fund (CPF) has improved over the years, and will continue to improve for future cohorts."
It was the Government's first remarks on the study, What Older People Need In Singapore, released by a team of researchers in May, which had sparked a heated discussion about whether Singaporeans have enough income to meet their needs in old age.
The study was led by Assistant Professor Ng Kok Hoe of the Lee Kuan Yew School of Public Policy, and found through focus-group discussions that a single person in Singapore aged 65 and above would need at least $1,379 a month to sustain a basic standard of living.
It added that about four in five of the elderly relied on adult children as their income source as of 2011, and warned that this dependence may be increasingly unsustainable , given the demographic trends.
Such reliance may also exacerbate inequality as supporting the elderly takes up a greater share of household costs for the lower-and middle-income, compared with those of higher incomes, it said.
The average household size dropped from 3.5 to 3.24 between 2008 and last year.
The resident old-age support ratio - the number of those aged 20 to 64 available to support an older person - is expected to fall from 4.8 last year to about 2.7 by 2030.
While acknowledging this challenge, Ms Kong Kum Peck, director of the ComCare and social support division at MSF, said: "The individual's role in financial planning for retirement is ever important."
She cited how younger Singaporeans' CPF savings have been increasing, with more expected to meet the Basic Retirement Sum (BRS).
The latest available figures show that the average balances of CPF members grew at 8 per cent annually from 2006 to 2016.
Meanwhile, 62 per cent of active members who turned 55 last year met the BRS, as opposed to just 38 per cent in 2008. "This is expected to increase with each successive cohort," Ms Kong said.
The BRS would give those who turn 55 this year a monthly payout of about $730 to $790.
Addressing concerns that some will not have enough to retire on, Mr Goh said that the country's retirement system helps Singaporeans meet three basic needs in old age: home ownership, healthcare adequacy and retirement income.
He reiterated the Government's stance on how this works. It is contingent on three parties: The individual who works and saves; employers who provide jobs, wages and CPF contributions; and the Government which gives interest on CPF savings and help for those who wish to monetise their homes, among other things.
Certain labour trends bode well, said Mr Goh. "As people earn more and stay in the workforce for longer, they are also able to save more through the CPF," he said.
The labour force participation rate among those aged between 25 and 64 is up, from 79.7 per cent in 2008 to 83.1 per cent last year.
Median gross monthly income has also increased, by 45 per cent between 2008 and last year, climbing to $3,949.
Aside from CPF, housing is also another source of retirement income, said Mr Goh. More than 90 per cent of Singaporeans own their homes and, even among the lowest 10 per cent of households by income, eight in 10 own their homes.
WHAT ABOUT THOSE WITHOUT CPF PAYOUTS?
Question marks, however, hover over the retirement adequacy of those who do not work and have little CPF savings.
In a commentary published in ST last month, former Nominated MP Kanwaljit Soin cited a parliamentary response that said that just 268,000 people aged 65 and older were receiving monthly payouts from the CPF Life scheme or Retirement Sum Scheme last December.
"The number of people over 65 is more than half a million, and so the remainder was left out of these two schemes. Who are these people and how are they managing?" she asked. This group presumably comprises housewives and others not in the formal workforce, and people over 88 years of age who were able to withdraw their total CPF at age 55, said Dr Soin.
In response, Mr Goh clarified that they may also include those on the Retirement Sum Scheme who have depleted their Retirement Account savings after drawing monthly payouts for some time, as well as those who have savings in their Retirement Account but have not yet activated their monthly payouts.
MOM does not keep track of the financial status of those who have chosen to withdraw their CPF savings, said Mr Goh. He did not comment on how many in Singapore have outlived their CPF payouts.
When asked, the two ministries also did not say if they collect data on whether the elderly have enough for retirement if income from various sources, such as CPF, private savings and investments, is taken into account.
But the Government, families and the wider community have extended more support to those in need in recent years, said Ms Kong.
For instance, about 4,700 individuals received ComCare Long-Term Assistance in the financial year of 2017, an increase of 20 per cent from four years before.
MORE NEEDS TO BE DONE
Commenting on the ministries' response, Nee Soon GRC MP Henry Kwek said that more needs to be done to improve Singaporeans' financial literacy so that they can plan adequately for the future.
He is a member of the People's Action Party Seniors Group, which made a call earlier this year for the CPF contribution rates for workers beyond the age of 55 to be increased. An update on this is expected by September.
Mr Kwek also hopes that there can be more casual job opportunities in the sharing economy that can be made available to seniors who want to supplement their retirement income.
National University of Singapore economics professor Chia Ngee Choon said that investment income may grow to be an important source of funds for the elderly in the future, and that there is also a need for Singapore to strengthen its social protection schemes.
While future cohorts are projected to have more savings in their CPF accounts, Dr Soin said she is worried about those in the interim cohorts who may still find that they are short of money for their needs.
"Many are concerned about healthcare costs, and it will take a load off people's minds if there is a universal healthcare scheme that can provide for outpatient visits to a family doctor," said Dr Soin, adding that individuals' usage of this scheme can be capped so that it remains sustainable.
"Such visits to a regular GP are an important part of preventive healthcare as they can advise you on issues such as diet and exercise. This can help one to avoid chronic conditions that lead to spiralling costs in old age."
Additional reporting by Tan Ee Lyn
By Mary Ann Tsao, Published The Straits Times, 11 Jun 2019
When the Tsao Foundation, which I chair, funded this study, the aim was to give older people a voice and allow us to hear what they need and consider as the minimum standard of living - a standard that they feel will give them a sense of belonging, respect, security, independence and participation.
What was most useful about this study was not the dollar amount the survey found to deliver this minimum standard, but the fact that we heard directly from older cohorts what they needed to enjoy quality of life.
The study found that $1,379 per month is needed for a relatively healthy single older person aged around 65 to meet a decent standard of living. This has generated spirited discussion on whether this amount is too little, too much or just enough. At the same time, we hope the study will give Singaporeans food for thought to reflect, in more concrete terms, on what their expected quality of life is in later life and to plan accordingly.
For people in their 40s and 50s, financial planning for their future is critical, especially given Singaporeans' increasing longevity well into their 80s. For those who are near retirement age, the study provides a framework to help them determine how much they will need and how much longer they may wish to work and earn, and think more proactively about savings and investments.
Planning for old age is not just for the individual, but also for the family. For many older people today, their family is their old-age financial plan.
With little educational opportunities in their youth, many among the older generation laboured to raise and educate their children so that the next generation could have a brighter future. As a result, many of today's elderly people have relatively little savings of their own and are dependent on the family.
The study prompts families to have a conversation and for grown-up children to discuss their parents' aspirational quality of life and explore how to meet this standard.
Shrinking family size, however, does challenge this reliance on family for old-age income. While inter-generational solidarity remains strong in Singapore, having fewer children to share the cost of support does strain family finances, especially with longer life expectancy.
A study by the Institute of Policy Studies (IPS) showed that all generations felt strongly that the responsibility to care for older parents remains with the family. However, that sense of support is less strong with those in the sandwich generation, most likely due to the real strain they experience in providing for their children and parents.
Since 1993, the Tsao Foundation has been innovating and providing a range of community-based health and social services to meet the needs of older people in Singapore. Some have no children, some live alone, while others live with their families. As we are a non-profit group, most of the elders we serve are poor or have modest means; in this regard, we are deeply familiar with their social and financial circumstances.
For older people with limited or no means, a basket of financing generally covers basic daily living needs, as well as their health and social care expenses: this typically comes from government subsidies and grants, their own money if they work, family income and donations. While this basket of financing is usually adequate to pay for necessities, there is little money left for anything else.
The situation is similar for those whose income level just misses subsidy eligibility.
Given longer lifespans and smaller families, the state needs stronger support for elders, but the rest of us in society must also step up.
The community and the non-profit sector must look beyond the traditional practice of just focusing on meeting basic needs, and address a standard of living that embraces dignity and respect. Some initiatives are already happening. Habitat for Humanity ensures that older persons' housing is not just a roof over their heads, but a comfortable home. Tsao Foundation's Cafe Kawan in Whampoa Community Club is a home away from home, where older people can meet and make friends, find a listening ear, discover and learn new interests.
Finally, the private sector must do more to make the life of current and future generations of older people better. Companies can provide more age-inclusive practices, such as having eldercare leave for staff who do not have small children but have older parents to look after.
Employers need to have fair human resource management practices. According to the same IPS study, a survey of working people of all ages noted that ageism is rampant in the workplace. Companies need to hire, compensate and retain according to roles and abilities rather than age, with equal opportunities for learning and career development for older workers.
International studies have shown that older workers have lower absenteeism and make fewer mistakes than younger co-workers, and, contrary to common belief, older workers can be retrained, though they need to be trained differently.
With a decreasing pool of younger workers due to a falling birth rate, employers must awaken to a new demographic reality and adapt the workplace for older workers. If elders are able to work longer with fair pay and earn more, they will be better able to have sufficient funds to meet a minimum standard of living in their later lives.
Just as it takes a village to raise a child, it takes the same attitude and effort to ensure that all of our elders can live with dignity. We should not allow some to live poorly. Collectively as a society, Singapore - with all its wealth - must ensure that its people get to enjoy a decent standard of living in their old age, when they are no longer able to create a better material future for themselves.
Mary Ann Tsao is chairman of the Tsao Foundation, a non-profit organisation that works on ageing issues.
* Future cohorts of seniors will have more resources to retire on
Improvements in education, incomes will make this possible despite the ageing population and smaller family sizes: Govt
By Yuen Sin, The Straits Times, 8 Jul 2019
A major source of financial support for retiring Singaporeans - their family members - is coming under strain, due to the ageing population and smaller family sizes, says the Government.
That notwithstanding, future cohorts of seniors will still have more resources to retire on due to improvements in education and incomes over the years.
This was a key thrust in a joint statement issued by the Ministry of Manpower (MOM) and Ministry of Social and Family Development (MSF) last week to The Straits Times when asked to comment on a recent study on retirement adequacy.
MOM's director for retirement systems Shaun Goh said: "Retirement adequacy through the Central Provident Fund (CPF) has improved over the years, and will continue to improve for future cohorts."
It was the Government's first remarks on the study, What Older People Need In Singapore, released by a team of researchers in May, which had sparked a heated discussion about whether Singaporeans have enough income to meet their needs in old age.
The study was led by Assistant Professor Ng Kok Hoe of the Lee Kuan Yew School of Public Policy, and found through focus-group discussions that a single person in Singapore aged 65 and above would need at least $1,379 a month to sustain a basic standard of living.
It added that about four in five of the elderly relied on adult children as their income source as of 2011, and warned that this dependence may be increasingly unsustainable , given the demographic trends.
Such reliance may also exacerbate inequality as supporting the elderly takes up a greater share of household costs for the lower-and middle-income, compared with those of higher incomes, it said.
The average household size dropped from 3.5 to 3.24 between 2008 and last year.
The resident old-age support ratio - the number of those aged 20 to 64 available to support an older person - is expected to fall from 4.8 last year to about 2.7 by 2030.
While acknowledging this challenge, Ms Kong Kum Peck, director of the ComCare and social support division at MSF, said: "The individual's role in financial planning for retirement is ever important."
She cited how younger Singaporeans' CPF savings have been increasing, with more expected to meet the Basic Retirement Sum (BRS).
The latest available figures show that the average balances of CPF members grew at 8 per cent annually from 2006 to 2016.
Meanwhile, 62 per cent of active members who turned 55 last year met the BRS, as opposed to just 38 per cent in 2008. "This is expected to increase with each successive cohort," Ms Kong said.
The BRS would give those who turn 55 this year a monthly payout of about $730 to $790.
Addressing concerns that some will not have enough to retire on, Mr Goh said that the country's retirement system helps Singaporeans meet three basic needs in old age: home ownership, healthcare adequacy and retirement income.
He reiterated the Government's stance on how this works. It is contingent on three parties: The individual who works and saves; employers who provide jobs, wages and CPF contributions; and the Government which gives interest on CPF savings and help for those who wish to monetise their homes, among other things.
Certain labour trends bode well, said Mr Goh. "As people earn more and stay in the workforce for longer, they are also able to save more through the CPF," he said.
The labour force participation rate among those aged between 25 and 64 is up, from 79.7 per cent in 2008 to 83.1 per cent last year.
Median gross monthly income has also increased, by 45 per cent between 2008 and last year, climbing to $3,949.
Aside from CPF, housing is also another source of retirement income, said Mr Goh. More than 90 per cent of Singaporeans own their homes and, even among the lowest 10 per cent of households by income, eight in 10 own their homes.
WHAT ABOUT THOSE WITHOUT CPF PAYOUTS?
Question marks, however, hover over the retirement adequacy of those who do not work and have little CPF savings.
In a commentary published in ST last month, former Nominated MP Kanwaljit Soin cited a parliamentary response that said that just 268,000 people aged 65 and older were receiving monthly payouts from the CPF Life scheme or Retirement Sum Scheme last December.
"The number of people over 65 is more than half a million, and so the remainder was left out of these two schemes. Who are these people and how are they managing?" she asked. This group presumably comprises housewives and others not in the formal workforce, and people over 88 years of age who were able to withdraw their total CPF at age 55, said Dr Soin.
In response, Mr Goh clarified that they may also include those on the Retirement Sum Scheme who have depleted their Retirement Account savings after drawing monthly payouts for some time, as well as those who have savings in their Retirement Account but have not yet activated their monthly payouts.
MOM does not keep track of the financial status of those who have chosen to withdraw their CPF savings, said Mr Goh. He did not comment on how many in Singapore have outlived their CPF payouts.
When asked, the two ministries also did not say if they collect data on whether the elderly have enough for retirement if income from various sources, such as CPF, private savings and investments, is taken into account.
But the Government, families and the wider community have extended more support to those in need in recent years, said Ms Kong.
For instance, about 4,700 individuals received ComCare Long-Term Assistance in the financial year of 2017, an increase of 20 per cent from four years before.
MORE NEEDS TO BE DONE
Commenting on the ministries' response, Nee Soon GRC MP Henry Kwek said that more needs to be done to improve Singaporeans' financial literacy so that they can plan adequately for the future.
He is a member of the People's Action Party Seniors Group, which made a call earlier this year for the CPF contribution rates for workers beyond the age of 55 to be increased. An update on this is expected by September.
Mr Kwek also hopes that there can be more casual job opportunities in the sharing economy that can be made available to seniors who want to supplement their retirement income.
National University of Singapore economics professor Chia Ngee Choon said that investment income may grow to be an important source of funds for the elderly in the future, and that there is also a need for Singapore to strengthen its social protection schemes.
While future cohorts are projected to have more savings in their CPF accounts, Dr Soin said she is worried about those in the interim cohorts who may still find that they are short of money for their needs.
"Many are concerned about healthcare costs, and it will take a load off people's minds if there is a universal healthcare scheme that can provide for outpatient visits to a family doctor," said Dr Soin, adding that individuals' usage of this scheme can be capped so that it remains sustainable.
"Such visits to a regular GP are an important part of preventive healthcare as they can advise you on issues such as diet and exercise. This can help one to avoid chronic conditions that lead to spiralling costs in old age."
Additional reporting by Tan Ee Lyn
Different method used to calculate CPF payout sums: Ministry of Manpower
By Yuen Sin, The Straits Times, 8 Jul 2019
A recent study, which had found that those in Singapore aged 65 and up would need at least $1,379 a month to achieve a basic standard of living, is "useful for personal goal-setting and retirement planning".
However, the methodology used by its researchers is fundamentally different from the Government's method of arriving at payout sums under the Central Provident Fund (CPF), a key pillar for retirement adequacy, said Mr Shaun Goh, director for retirement systems at the Ministry of Manpower (MOM).
The study, which was based on an established research method known as minimum income standards (MIS), was done by a team of researchers led by Assistant Professor Ng Kok Hoe of the Lee Kuan Yew School of Public Policy at the National University of Singapore.
It had gathered people aged 55 and above in focus groups to talk about what they considered to be their basic standard of living, before arriving at the figure of $1,379 a month.
This amount, which assumes that a senior would be in good health, covers expenses for social activities such as meals at restaurants, and also factors in the sum a senior needs in order to buy a two-room HDB flat.
"Such income standards can help by translating societal values and real experiences into unambiguous and substantive benchmarks that policy can aim for," Dr Ng had said when the study was released in May.
MOM, which did not say if it agrees with $1,379 as a baseline figure for what Singaporeans need in old age, had established the CPF retirement sums and corresponding payouts by examining actual expenditure patterns reflected in the Household Expenditure Survey (HES), said Mr Goh. The HES is conducted once every five years.
This was done at the advice of experts from the CPF Advisory Panel, which was convened in 2015 to recommend ways to improve the CPF system.
For instance, the monthly payout under the Basic Retirement Sum (BRS) corresponds to the average expenditure of retiree households per household member for the 21st to 40th percentile.
This payout is what CPF members get if they can meet half the Full Retirement Sum (FRS), combined with a sufficient property pledge or charge to make up the rest of the full sum. For those turning 55 this year, the BRS is $88,000, and the FRS is $176,000.
Those who achieve the FRS will get a monthly payout of $1,350 to $1,450.
"Individuals' needs vary, and members should plan for their retirement based on their estimated monthly income required," added Mr Goh, who also did not comment on whether MOM had its own baseline figure for basic living needs.
Those who expect to spend more in retirement may also set aside more savings in their CPF, and Singaporeans can supplement their CPF payouts with other income sources such as private savings, and family, community and government support, he said.
In response, Dr Ng said that the MIS approach generates benchmarks for policymaking that are based on citizen participation and social consensus, and which are easily understood by the public.
"More generally, the eligibility rules and generosity levels of all social policies should be decided in a principled, consistent and transparent manner, not just CPF retirement sums. This will allow the public to understand the intentions behind policies and ensure accountability," he added.
By Yuen Sin, The Straits Times, 8 Jul 2019
A recent study, which had found that those in Singapore aged 65 and up would need at least $1,379 a month to achieve a basic standard of living, is "useful for personal goal-setting and retirement planning".
However, the methodology used by its researchers is fundamentally different from the Government's method of arriving at payout sums under the Central Provident Fund (CPF), a key pillar for retirement adequacy, said Mr Shaun Goh, director for retirement systems at the Ministry of Manpower (MOM).
The study, which was based on an established research method known as minimum income standards (MIS), was done by a team of researchers led by Assistant Professor Ng Kok Hoe of the Lee Kuan Yew School of Public Policy at the National University of Singapore.
It had gathered people aged 55 and above in focus groups to talk about what they considered to be their basic standard of living, before arriving at the figure of $1,379 a month.
This amount, which assumes that a senior would be in good health, covers expenses for social activities such as meals at restaurants, and also factors in the sum a senior needs in order to buy a two-room HDB flat.
"Such income standards can help by translating societal values and real experiences into unambiguous and substantive benchmarks that policy can aim for," Dr Ng had said when the study was released in May.
MOM, which did not say if it agrees with $1,379 as a baseline figure for what Singaporeans need in old age, had established the CPF retirement sums and corresponding payouts by examining actual expenditure patterns reflected in the Household Expenditure Survey (HES), said Mr Goh. The HES is conducted once every five years.
This was done at the advice of experts from the CPF Advisory Panel, which was convened in 2015 to recommend ways to improve the CPF system.
For instance, the monthly payout under the Basic Retirement Sum (BRS) corresponds to the average expenditure of retiree households per household member for the 21st to 40th percentile.
This payout is what CPF members get if they can meet half the Full Retirement Sum (FRS), combined with a sufficient property pledge or charge to make up the rest of the full sum. For those turning 55 this year, the BRS is $88,000, and the FRS is $176,000.
Those who achieve the FRS will get a monthly payout of $1,350 to $1,450.
"Individuals' needs vary, and members should plan for their retirement based on their estimated monthly income required," added Mr Goh, who also did not comment on whether MOM had its own baseline figure for basic living needs.
Those who expect to spend more in retirement may also set aside more savings in their CPF, and Singaporeans can supplement their CPF payouts with other income sources such as private savings, and family, community and government support, he said.
In response, Dr Ng said that the MIS approach generates benchmarks for policymaking that are based on citizen participation and social consensus, and which are easily understood by the public.
"More generally, the eligibility rules and generosity levels of all social policies should be decided in a principled, consistent and transparent manner, not just CPF retirement sums. This will allow the public to understand the intentions behind policies and ensure accountability," he added.
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