Longevity is seen as a blessing in Singapore, and if latest statistics are any indication, we have much to be thankful about.
According to a 2021 report1, Singapore has one of the world’s highest life expectancy in 2020, with the average lifespan at birth being 83.8 years. And this is one blessing that doesn’t seem to be running out anytime soon, as the study indicates that Singapore’s life expectancy has increased in an average of 0.18% in the past 4 years.
Living longer means that Singaporeans have more time to enjoy what the world has to offer. Preparing adequately for a long life can ensure that one enjoys a comfortable and rewarding life well into one’s twilight years, but also involves greater resources and more advance preparation. As Singaporeans live longer, the need for an adequate retirement income becomes all the more pressing.
Certain behavioural shifts will be necessary, with some people retiring at later ages and others choosing to start planning for retirement much earlier than previous generations.
As people live longer and the population ages, the healthcare and caregiving expenses borne by a person throughout his or her lifetime are likely to rise, which adds to the financial burden of retirement.
This could trigger many changes on an individual and societal level. For instance, in future, the healthcare system might be revamped in order to prioritise screening and early detection of health issues, such as by assigning each patient a registered doctor who can track their health trajectory over time. Retirement resorts such as the recent development Hillford@Jalan Jurong Kechil2 might become more common.
Living longer lives could also catalyse a rewriting of personal narratives, allowing for a more diverse collection of life stories. Life is now less of a race to the finish-line than it is a long, meandering journey where pitstops and detours are welcomed experiences.
Already, young Singaporeans’ views of careers have changed significantly over the past decade, with mid-career switches becoming common as more contemplate the possibility of a longer working life and do not wish to be pigeonholed in one single career.
In a similar vein, the idea of taking a gap year or going on sabbatical in order to travel or volunteer, once seen as an indulgence that would place one at a serious professional disadvantage, is now viewed by an increasing number of people as a much-needed break in a long career and a sign of a well-balanced life.
In order to cater to longer lives and support the demographic changes facing Singapore’s aging population, the government has calibrated the CPF system to provide lifelong support.
In 2009, in order to prevent retirees from outliving their CPF savings, CPF LIFE was introduced to offer lifelong payouts in retirement. All Singapore citizens and Permanent Residents born in 1958 and after are automatically placed on the CPF LIFE scheme if they have adequate Retirement Account balances.
In addition, over the next decade or so, the government plans to raise CPF contribution rates for older workers3 , with the first hike already having taken place in January 2021.
The government is also making efforts to help workers remain employable until later on in life. By 2030, the retirement age and re-employment age will be raised4 to 65 and 70 respectively in order to make it easier for seniors to continue to work. Businesses are also given incentives to hire older workers through efforts such as Special Employment Credit5 , which offsets wages of local workers aged 55 and above earning up to S$4,000.
Government insurance schemes have also been ramped up, with the former MediShield being replaced by MediShield Life in 2015 to offer better coverage for life. In 2021, MediShield Life’s benefits will be enhanced6 even further and some claim limits raised.
In addition, national disability insurance scheme CareShield Life was introduced in 2020, replacing the previous ElderShield, to help the severely disabled cope with the cost of long-term care.
There is much we, as individuals, can do to ensure a happy retirement for as long as we live. When working out our financial needs in retirement, it is advisable to prepare for a long life, bearing in mind Singapore’s high and rising life expectancy.
A longer life requires smart to ensure retirement adequacy. It is never too early to start, with young people in their twenties being in an excellent position to take advantage of compounding interest to grow their retirement nest egg.
However, it is never too late either, so don’t despair if you have not yet started putting aside money for retirement. Late starters have the benefit of a more mature career, which enables them to take full advantage of some types of retirement products.
Healthcare and caregiving arrangements should be given special attention when planning for retirement. Consider purchasing insurance such as hospitalisation and critical illness insurance to lower your future healthcare costs. It is also advisable to discuss caregiving arrangements with your family ahead of time so you know what to expect as you age and can better anticipate future costs.
Finally, consider taking advantage of insurance plans that can beef up existing government support. Integrated Shield Plans build on your existing coverage from MediShield Life, and disability income insurance can enhance your CareShield Life coverage.
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