Wednesday, 30 June 2021

A 'silver tsunami' looms. What can Singapore do about it?

The issues of the elderly in a few years' time may not be the same as what we are worried about today.
By Royston Sim, Deputy News Editor, The Straits Times, 27 Jun 2021

Singapore is greying rapidly.

While this development has been flagged on multiple occasions in the past, the release of population census data earlier this month provides a stark illustration of the looming silver tsunami.

Census 2020 showed that residents aged 65 years and above formed 15.2 per cent of the resident population last year, up from 9 per cent in 2010.

Meanwhile, the old-age dependency ratio increased from 13.5 per cent to 23.4 per cent in the same period.

This ratio will only increase. By 2030, about one in four people here will be aged over 65.

Institute of Policy Studies head of governance and economy Christopher Gee notes that in the span of 10 years, Singapore has gone from being classified as an ageing society (defined by the United Nations as one in which more than 7 per cent of the population is aged 65 and over) to an aged society (above 14 per cent).

By 2030, going by projections, Singapore will be classified as a super-aged society (above 20 per cent), joining the ranks of countries like Japan.

This means there will be fewer children to take care of ageing parents, and more seniors will end up living alone.

The burden on those of working age will grow, while spending on healthcare and long-term care for the aged will rise as people live longer.

There is also the risk of Singapore's economy losing its dynamism and competitiveness, as its overall pool of workers gets smaller.

Bringing in migrants to offset the declines in population size and overall ageing - a politically charged issue that has already given rise to social tensions - will have to be carefully managed.

Other countries are facing the same challenge of a shrinking working population.

The 2021 ageing report by the European Commission projects that the labour supply for those aged 20 to 64 in the European Union will fall by 2.8 per cent by 2030, and by a further 13.1 per cent between 2030 and 2070.

The report also projects that by 2070, the EU would go from having about three working-age people for every person aged over 65 years, to having only less than two.

Assistant Professor Tan Poh Lin from the National University of Singapore's Lee Kuan Yew School of Public Policy says Singapore's combination of a greying population and very low fertility rate "reduces the timeframe for society, the economy and public policy to catch up, and increases the risks of unmet needs and inability of the economy to adequately adjust".

What steps should Singapore take to address this pressing issue?

IPS' Mr Gee sums it up thus: "Singapore can manage the rising costs of a more aged population by ensuring older persons continue to lead purposeful lives that enrich all of society. We do that by adapting our institutions to cater to different generational needs and requirements, revising our norms, especially those that anchor behaviours and activity to arbitrary chronological age markers, and ditching discriminatory ageist mindsets."

One area which needs attention is retirement adequacy, he says.

While Singapore has created a nation of home owners by allowing Singaporeans to pay for housing with their Central Provident Fund (CPF) contributions, he notes that this has resulted in a number of households having too much of their assets tied up in the home they occupy, with the other assets unable to fully cover all the costs of post-retirement living.

This issue is compounded by the prospect of diminishing property values as public housing leases go down.

"I believe this is an issue that will need to be addressed through the provision of a more flexible set of housing monetisation options, perhaps utilising concepts of social risk-pooling and professional asset management, handled by an updated HDB and accompanied by modifications to our housing finance policies," he says.

Retirees as volunteers

On the caregiving front, Mr Gee says more resources will have to be allocated to building up Singapore's long-term care institutions - especially within the community - and providing facilities in the homes of people as the population ages and societal pressures for such care increase.

Professor Paulin Straughan, a sociologist at Singapore Management University, says the aim should be to promote ageing in place and have seniors continue living in their own homes as far as possible.

Most homes will not have the luxury of hiring a foreign domestic worker who can take care of the elderly, she notes.

"So moving forward, we will have to leverage social capital in the community where the young and the old play important roles in facilitating ageing in place for the older members who are living with disabilities."

She highlights the growing pool of retirees who are better endowed and better prepared for retirement.

They should be seen as community assets, and tapped as potential volunteers, she adds.

One suggestion she has is to relook existing volunteer programmes to assess if frameworks to engage volunteers are robust enough.

"We must go back to the basics and curate a recruitment plan to attract a core group of younger retirees within each community to drive the initiatives," she says.

"We might also look at how to resource honorariums for these older volunteers as many will appreciate a small amount of funds to stretch their retirement savings."

In terms of infrastructure, the Government will also have to continue upgrading housing estates to be silver-friendly - for instance having basic essential services available within walking distance and safe communal spaces where volunteers can run regular activities.

Discarding ageist mindsets

As the population greys, another key thing that has to change is the way employers regard older workers. Allowing people in their 60s to remain productive and work for longer - should they wish to - will go some way towards countering the rising old-age dependency ratio.

Associate Professor Angelique Chan, executive director of the Duke-NUS Medical School's Centre for Ageing Research and Education, says society has to get more used to the idea that older workers can be productive.

Employers have to be willing to hire older workers. Having policies that do not discourage working after 65 will be key to this, she adds.

The current statutory retirement age of 62 will be raised to 63 from July 1 next year. The re-employment age will go up from 67 to 68 as well.

By 2030, the retirement age will be raised to 65 and the re-employment age to 70.

Workers cannot be dismissed on the grounds of age before they reach the retirement age, and employers have to offer eligible staff work up to the re-employment age - but with the flexibility to adjust contract terms based on new duties or responsibilities.

On this front, one common practice that should be relooked is offering employees a re-employment contract with reduced terms and benefits - even though they are doing exactly the same job as before they reached the retirement age.

Mr Gee notes that being old or older is often associated with diminished capacity and productivity, by both employers and even the employees themselves.

The perception of the elderly as being less productive than younger workers needs to be continually challenged, says Prof Tan, especially as successive generations hold more and more human capital and are increasingly adaptable to new technologies and innovations.

"This would reduce the demographic penalty of population ageing to some extent," she adds.

Prof Straughan calls for a scan of current labour market conditions, to ensure there is no ageism in the various labour policies and practices. Further investments in retraining and upskilling, to ensure the older labour pool remains relevant, is necessary as well, she adds.

Allowing workers to retire later should also keep them healthy for longer.

In a paper that she co-authored and published in 2018, Prof Chan examined data for older employees over six years from 2009 to 2015.

She found that compared with those who remained in the workforce, retired older adults felt lonelier, were more depressed, and exhibited poorer cognitive function.

They also reported a significant deterioration in health over time, including having more chronic diseases.

The findings suggest there are major benefits to continued employment in old age, she wrote.

Singapore University of Social Sciences economist Walter Theseira notes that older workers are currently over-represented in professions such as craftsmen, plant and machine operators, cleaners and labourers.

This is due to their lower education levels compared with younger workers, he adds.

"It would be a mistake to think the issues of the elderly in a few years' time will look exactly the same as that we are concerned with today, when we worry about why there are elderly cleaners or cardboard collectors," he says.

Singapore will likely still have some elderly in low-wage, manual jobs or in poverty.

But if the country does not manage the transition to older workers well, it will soon have tens of thousands of professionals, managers, executives and technicians (PMETs) out of work - many of whom may feel they were forced to exit their careers in their prime, or forced to accept much lower standards of living from what they were used to, he says.

"That would also be a massive waste of human capital."

In general, Singapore has been looking at the right areas in terms of extending and encouraging older workers to stay in the labour force, as well as getting them to reskill and catering to the needs of the elderly through social and financial support, Associate Professor Theseira says.

"The problems are that we don't know enough about whether some of these policies, such as for skills upgrading and reskilling, have been effective. We also are not prepared, I think, for the ageing of our heavily PMET, higher- educated workforce, which will pose quite different challenges from the ageing of our less educated pioneer generation workforce."

He notes that the problem facing the elderly today is largely basic financial adequacy, which can be addressed by significantly increasing financial and social support beyond existing measures like the Silver Support scheme.

But the problems of tomorrow will likely be much more expensive to solve, because ageing PMETs will not be satisfied with a basic standard of living, or with low-wage retirement jobs, or with current standards of long-term care, he adds.

IPS' Mr Gee notes that Singapore society, like many others around the world, has got used to the standard three major stages of the human life cycle - childhood, adulthood and middle age, and old age. Shifting to a more dynamic, adaptive model of living that is less determined by one's age will allow a society to cope with population ageing, he says.

He is optimistic that with greater numbers of healthier, better educated Singaporeans who are living purposeful lives well beyond traditional milestones of old age, society will be able to move away from its legacy associations of old age with infirmity and loss of capacity.

What is clear is that decisive steps have to be taken to keep older workers in jobs for longer and improve the caregiving landscape, for Singapore to cope with its rapidly ageing population.

Use Singapore's Census 2020 to plan your own retirement
Getting a peek at growing trends, such as the ageing population, should signal how older folk will need more help
By Tan Ooi Boon, Invest Editor, The Straits Times, 27 Jun 2021

The latest Census of Population 2020 has not only uncovered new trends that policymakers will need to address, but also served as a timely reminder that we all need to take stock of how we should run our households.

Some of the statistics, especially on our ageing population, may seem distant if you are young and at the peak of your career. But you should take the once-in-a-decade survey as a peek into the future because if such trends persist, the findings related to senior citizens will apply to you too one day.

So you would do well to see how you can put in place longer-term financial planning strategies that will help you age gracefully and comfortably. Here are three census findings that you should heed.

Property ownership

If you have moved to a condominium in the past decade, congratulations for acquiring the most difficult of the "5Cs" and for increasing private apartment ownership from 11.5 per cent to 16 per cent of the 1.37 million resident households here.

But being a fairly new condominium owner, chances are you still have many years ahead before you pay off your home loan.

When it comes to paying your mortgage, watch your budget so that you can continue to save and plan for your retirement.

For instance, you should use cash as much as possible to pay the loan instead of relying on your Central Provident Fund (CPF) because the 2.5 per cent interest of the Ordinary Account is much higher than the prevailing mortgage interest of about 1 per cent.

In short, it makes no sense using the more valuable CPF to pay off a cheaper loan.

If you deplete this retirement kitty, you risk being an asset-rich and cash poor owner in old age.

A couple living in a private home who still own their Housing Board flat, which generates $2,100 a month in rent, recently wrote to say that they intend to sell the $600,000 flat.

This is because maintaining more than one property is leaving them with low retirement sums in their CPF. Selling the flat will allow them to use part of the proceeds to top up their CPF Life to the prevailing enhanced retirement sum that pays over $2,000 a month from 65.

So the couple stand to receive over $4,000 a month, or double the current rental income. Another big plus is that they no longer have to worry about paying taxes and repair costs for the flat as well as the hassle of finding good tenants.

If you also find yourself in the same asset-rich but low retirement sum scenario, meet CPF Board officials to discuss whether you can enjoy higher CPF Life payouts or whether you should continue to hold on to your investment properties and earn rental income.

What if you have only one home and that's your HDB flat - about 78.7 per cent of households here live in one, the census noted. Around 30 per cent of this group live in four-room units, making them the most common type of home over the past decade.

Not all HDB flats are equal - some are more valuable due to location and you have the option to sell and downgrade to a cheaper one if you find yourself short of cash in old age.

But if you like your neighbourhood and don't want to move, there is another option - sell part of your lease back to the HDB and then increase your CPF Life monthly payout. This allows you to keep living in your flat while having more money to spend every month, for life.

More double-income families

One of the more uplifting census findings is that most families saw their monthly household income increasing, across all the income groups.

While the pandemic has impacted some families, the saving grace is that there are more families with dual incomes that can cushion the blow.

Households with both spouses working have increased by around five percentage points to 52.5 per cent from a decade ago.

Indeed, women are carrying the flag for many families because those employed among married couples had risen from 52.9 per cent in 2010 to 60 per cent last year.

On the other hand, the proportion of households with only the husband employed dropped from 32.6 per cent to 24.9 per cent.

It is good to have both spouses working in a household because double the income means double the firepower for everything, including retirement planning.

It is not unusual for some couples, especially those with high salaries, to own more than one property since such assets are preferred over other investments.

Indeed, such folk have resulted in a uniquely Singapore investment term - de-coupling - which refers to couples removing one of their names from their first matrimonial home so that the other can buy another property without incurring the dreaded hefty stamp duties for buying second properties.

Property aside, when it comes to retirement planning, it is always prudent for married couples to plan as a team, especially when one spouse, usually the wife, is not working.

At the very least, the sole working spouse should make regular top-ups to the other's Special Account so that they can enjoy two sets of CPF accounts earning 4 per cent interest. This allows the working spouse to claim at least $7,000 worth of tax reliefs annually as well as ensuring both spouses have decent monthly payouts from their CPF Life.

This is a basic lifelong double-income plan that all married couples must strive to have for their retirement so that they no longer have to work after 65.

More elderly Singaporeans

That there are more people aged 65 and above here should not surprise you because you can see silver-haired folk regularly the moment you step out.

To put it even more starkly: 34.5 per cent of all households have at least one family member aged 65 or more.

What is even more worrying is that the number of seniors living alone has more than doubled in the past decade, from 27,900 in 2010 to 63,800 last year.

The census also revealed that nearly 98,000, or 2.5 per cent of residents aged five and above, were unable to carry out or struggled with at least one basic activity, which includes seeing, hearing, walking, concentrating, dressing or communicating. Most of those suffering from such conditions are aged 65 and above.

As the population ages, the burden falls on many of us as we must factor in the additional expenses of taking care of our elderly parents.

Many underestimate their needs for retirement, including seniors who used to earn decent salaries themselves. For instance, you may think it is enough to go on $3,000 a month at 65 and since you have $700,000 saved up, that's more than enough to last you through 85.

Chances are folk who think this way have not factored in other kinds of expenses, such as healthcare costs and medical insurance, which will be hefty as they age.

Last year, an HSBC poll noted that about 50 per cent of Singapore workers said their parents had difficulty coping with retirement due to insufficient savings. These include parents of families with high-income earners.

The survey also found that most of those earning under $40,000 annually could not afford to pay for most of their parents' needs because they have to take care of their own families.

Not surprisingly, it is common to see folk in their 70s and 80s rejoining the workforce as menial workers today.

This part of the census should be a wake-up call for all families - it is critical to plan for lifelong income in old age by ensuring you have sufficient savings to join the CPF Life annuity scheme that guarantees stable monthly payouts from 65.

If you have elderly parents, it may be a stretch to ensure they too have adequate CPF Life payouts now without affecting your own family's retirement needs later.

But do consider putting them on CareShield Life at least, when the scheme, which is affordable, opens to those aged 41 and older soon. This scheme aims to provide at least $600 a month to those needing help to perform at least three of the basic essential tasks of life such as showering and walking so their families can consider paying for caregivers.

The census has given you a peek at possible future trends and you would do well to be ready for it before you join the greying population too.

When no one pays for you in old age
By Tan Ooi Boon, Invest Editor, The Straits Times, 27 Jun 2021

What is the common link between a single person and a married couple with either one or no kids? All three must be financially independent because chances are they will have to fend for themselves in old age.

This is the stark reality of two growing trends highlighted by Census 2020 - fewer residents are getting married and more married couples are choosing not to have kids or only one child.

Take the 40 to 49 age group. The proportion of people in this cohort who do not have kids increased from 9.3 per cent to 13.5 per cent in just a decade, while those aged 50 and over without children went up from 4.6 per cent to 6.7 per cent.

Couples in the 40 to 49 age group with only one child increased from 19 per cent in the census 10 years ago to 24 per cent while the proportion of those aged 50 years and over rose from 12.2 to 15.1.

As for singles, the proportion rose across all age groups over the past 10 years. The sharpest increase was among younger residents aged 25 to 34 years.

For those aged 25 to 29, the number of single men rose from 74.6 per cent to 81.6 per cent, and from 54 per cent to 69 per cent for women. As for those aged 30 to 34 years, the increase was 37.1 per cent to 41.9 per cent for men, and 25.1 per cent to 32.8 per cent for women.

Married couples

An HSBC survey found that 84 per cent of Singaporeans said they would support their parents in full or in part when they hit old age.

While this figure exceeds the global average of 69 per cent, it trails behind families with a strong Chinese culture of filial piety, such as those in Hong Kong (94 per cent) and China (88 per cent).

That said, in many surveys done by financial institutions, the responsibility of supporting parents is often cited as a burden by those polled because it takes a heavy toll on their own savings.

Take a couple with one son. If he goes on to marry the only child of another couple, this means that husband and wife will eventually have the task of taking care of four elderly parents.

This can get even more challenging - if the wife has to give up work to take care of her own child, the sole breadwinner in the family has to shoulder the burden of taking care of seven people, including himself.

Of course, you may say that such cases are rare but the reality is harsher than you might think.

The HSBC poll, which was reported in Invest last year, noted that more than half of those who earned $150,000 or more annually confessed that while they would give their parents monthly allowances, they would not be able to pay for most of their expenses.

And around 75 per cent of those earning $40,000 to $150,000 said they would not be able to support their parents totally.

If there is a lesson to be drawn from such data, it is that many people, especially parents, underestimate their own retirement needs.

For example, how many know that the annual premiums for medical insurance alone are between $10,000 and $15,000 the moment you hit 80? So a retired couple at that age level will need to pay $20,000 to $30,000 annually just to keep their policies intact.

For those who like to dote and splurge on their children such as taking them for holidays every school holidays and buying whatever things they wish for, you may want to pause and do the maths to see whether regular high expenses will derail your own retirement plans.

You should know that your most valuable investment for your children is actually your time with them and not money. So if you truly love your children, make sure you can take care of yourself first, so that they do not have to live with the guilt if they cannot afford to pay your medical bills in old age.


The census found that less-educated men are more likely to stay single while educated women are likely to remain unwed.

It is hard to fathom the reasons just based on educational levels - many less-educated people are very rich and can afford to get married, and likewise, high qualifications do not automatically make you a millionaire.

But one thing is clear though - if you are well-off, you have more freedom to choose your desired lifestyle, including whether to stay single or get married.

There are many high-flying women who remain single and they certainly have no problems taking care of themselves because they are both asset- and cash-rich.

But instances of wealthy bachelors are not as common as many do get hitched along the way and start their own families.

That said, there are many single men living quiet and unassuming lifestyles in heartland estates and they are quite well-off.

Recently, an Invest reader who is single and in his early 50s disclosed that he lives in a fully-paid-up, three-room Housing Board flat and has over $1 million in his Central Provident Fund (CPF).

Just based on what he has in his CPF, he stands to enjoy a lifelong monthly income of about $5,000 derived from CPF Life payouts and interest earned alone from 65 onwards.

This excludes his high CPF savings and other cash and investments, such as insurance policies that he can slowly draw on for a very comfortable retirement.

What it means is this: Whether married or single, you need to plan for your own retirement because no one else will pay for you.


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