Retirement at 60: No longer possible?

By Elena Torrijos


About two weeks ago, Yahoo! Answers Singapore asked: “Do you think you will be able to retire by 60?” Majority of the 623 who posted replies were quite pessimistic about their prospects. No way, unless one marries rich or wins the Toto, was an oft-cited response.

A good number of posters pointed out that life in the city-state is all about debt – Singaporeans will have to work until they die to pay off their obligations. This perception might be exaggerated, but the argument that debt may hold back retirement at 60 is hard to discount, especially now that prices of HDB flats have risen, and wages haven’t exactly caught up.

“Singaporeans are all ‘paper rich.’ Almost everyone is in debt: Housing, Car, Study, etc…” said one poster that earned agreement from fellow posters. Another poster noted that Singaporeans incur debt starting from the time they study in university to the time they have to buy a house and car.

The increasing cost of living in Singapore is frequently mentioned as a major constraint to achieving retirement goals. “With exorbitant prices of HDB flats… I doubt Singaporeans can even think of retiring,” one poster said. Inflation is high and medical expenses are rising, observed another. A poster said that if Singaporeans went by current estimates of financial planners, he would need to have at least a million dollars to retire at 60.

A fair number thought that retirement at 60 might be possible – if they spend their post-job years in a lower-cost country. “If I take all my money and go abroad I can survive a long time,” asserted one user. Another poster believes Singaporeans with lower incomes will have to “migrate to a third world country” for their retirement. The popular view is that the average-income family cannot enjoy retirement by age 60, believing only the “only the rich can do that.”

Nevertheless, a significant minority said retirement by age 60 is doable, with some posters explaining how they managed to do it through frugal living or key investments.

“Trick is to make your money work hard and not you, work hard,” said one user. Downgrading to a smaller HDB flat will free up funds for retirement was another option mentioned.

Others underscored the importance of lifestyle choices: “I’ve retired at 40…. It’s a lifestyle choice.” “It’s a matter of whether you are disciplined or not.”

One user offered this formula: “Investing + saving + Start early = Retire early.”

Pessimism Or Preparation

Many Singaporeans, however, have not started to plan for retirement though they profess it is a goal. A recent survey of more than 500 fully-employed Singaporeans aged between 35 and 55 revealed that 60% of Singaporeans want to retire by the time they reach 60, but only 40% have made, or intend to make, a retirement plan.

More than half of the respondents fear they will retirement savings not last long enough and run out, and around 70% believe they are “very likely” to turn to part-time employment when they retire.

Simply being pessimistic about the future, however, will do nothing to change it. Ultimately, as some posters recognise, being able to retire at 60 (or when you want) will depend on how you handle your situation now. The higher your income and the lower your household and other expenses, then the more room to save. The earlier you start to prepare and plan, the earlier you can retire

If a person were to save S$500 per month, after expenses, from the age of 30 onwards and reaches 60 with 190k, can retire comfortably?.

190k by then see doctor also not enough

I think this is the case in most 1st world nation. Also take note that in most 1st world nations, it now takes a dual income family to afford bringing up kids. So it is not specific to Singapore.

Much of this has to do with the increasing lifespans. 30 years ago, people dies at late 60s but today people die at late 70s. The 10 year difference means 10 more years of use of $$$$ so much work longer to pay for it lor.

If you work till you die, basically you need to save $0 for retirement, unless you want an extravagant funeral.

There are a host of financial calculators available at http://www.sorted.org.nz

I noticed this amongst Singaporeans for quite a long while. When they talk about retirement, they talk about living frugally, being thrifty and more along the lines of spartan living. Retirement also means premature retrenchment, unable to find work etc.

In the advanced countries, it refers to finally not needing to work, using the dividends from a lifetime of investment and careful planning. Typically, it involves more time for holidays and more time for hobbies such as golf, fishing and meeting buddies over coffee. It also means volunteering for charity work etc.

I can't help but blame this govt which ran this country like a nanny state that people actually thought their CPF will do all the work.

In the old days, I remember people use to find medical reasons to get into early retirement to get out of their contracts and enjoy the fruits of their investment and the property boom of the 70s and 80s.

Suddenly despite putting money into CPF, a whole generation will not be able to draw a penny out and but their fund will ensure that hospitals bills are paid and they won't be burden to the country. Surely this alone must be reason to kick out the PAP.

Note real wages has steadily deteriorated except those in the Civil Service and the Political offices. Truly a dumb country.

scroobal said:

Note real wages has steadily deteriorated except those in the Civil Service and the Political offices. Truly a dumb country.

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Not everyone is dumb. Hundreds of thousands of S'poreans are now living in other countries on a permanent basis, either as PRs or citizens of those countries or just not intending to return. They can see the writing on the wall too. I know of at least 30 friends and family members who have gone overseas. Many singaporeans if given the chance would do the same too. This is why the PAP has to import large numbers of FTs to make up for those lost to emigration.

The population increased to over 4 million from 2.3 million. Most Singaporeans are still here. The foreigners are sitting on them.

Papsmearer said:

Not everyone is dumb. Hundreds of thousands of S'poreans are now living in other countries on a permanent basis, either as PRs or citizens of those countries or just not intending to return. They can see the writing on the wall too. I know of at least 30 friends and family members who have gone overseas. Many singaporeans if given the chance would do the same too. This is why the PAP has to import large numbers of FTs to make up for those lost to emigration.

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scroobal said:

The population increased to over 4 million from 2.3 million. Most Singaporeans are still here. The foreigners are sitting on them.

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Check your numbers. The figure was 2.3 million for the longest time, than all of a sudden popped up to the 4 million range. To achieve an additional 1.7 million population, it took a very short time. Achieved only thru mass importation of FTs. Just sit down make a list and add up how many people u know living overseas, than multiply that number with every other native born singaporean's list. The problem with sinkies is that when they leave they do it very quietly. At least 20,000-40,000 singaporeans leave every year for the last 3 decades. U do the numbers.
Look at the attitude of the PAP leadership in the last 20 years. First, they use the threatening tone. i.e. all sinkies that leave are quitters, losers, the grass seems greener on the other side, etc. Than it became conciliatory i.e. maybe dual citizenship for people who have left, encourage them to return and keep ties with the home country, etc. Now, you never here anything on this topic. That's because they have given up, and now just import FTs to make up the difference.

Think you can find anwser by looking at revenue generated per person. Between 18 to 55 Singaporeans are positive revnue for the Gov. Between 18 to 21 Singaporeans contribute cheap labor in terms NS. When I say rev gen I mean GST, parking fuel tax, COE, maid levy, CPF,....

At 55 Singaporeans starts becoming a liability and there is a net loss. Withdrawal of CPF, spending like spartans upon retirement (less GST), requirement for more medical costs. So there is a sweet spot of 35 years but then you have problem of no rev for 1 to 18 years and 60 to grave.

So if you want rev machine to be positive why not just import FTs. At the very least they are a boost for the short term - no loss for formative years, they just come at 22 years old and each one is a goldmine for the Gov. Of course there is potential issues with them too wanting to stay and tap medical benefits BUT then there is no medical benefit for them to taps. Who knows, many of the PRC might very well move back to China for retirement (fast forward 30 years, it is entirely possible and likely that China has a robust state subsidized medical benefit) same too for those from India.

You see it is all very business like. Each person hold office job will make about $3K and will probably spend close to $2K on living expenses, GST, COE ERP. Each maid generates $300 in maid levy and probably spend 70% of her pay of $400 on weekend food, clothing, buy stuff for going home etc. So from each maid they can collect $350 a month.

Papsmearer said:

Not everyone is dumb. Hundreds of thousands of S'poreans are now living in other countries on a permanent basis, either as PRs or citizens of those countries or just not intending to return. They can see the writing on the wall too. I know of at least 30 friends and family members who have gone overseas. Many singaporeans if given the chance would do the same too. This is why the PAP has to import large numbers of FTs to make up for those lost to emigration.

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If you have the will, there will be a way out.

im only 45 n oredi retired liao.
many people are retiring at 50 nowsday.
whats the big deal?

longbow said:

Who knows, many of the PRC might very well move back to China for retirement (fast forward 30 years, it is entirely possible and likely that China has a robust state subsidized medical benefit) same too for those from India.

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That's what most of the FTs will do, mess up SG and then go back to their respective country where they call Home, leaving the poor Singaporeans that have nowhere to go, to clear up the mess.

longbow said:

So if you want rev machine to be positive why not just import FTs. At the very least they are a boost for the short term - no loss for formative years, they just come at 22 years old and each one is a goldmine for the Gov. Of course there is potential issues with them too wanting to stay and tap medical benefits BUT then there is no medical benefit for them to taps. Who knows, many of the PRC might very well move back to China for retirement (fast forward 30 years, it is entirely possible and likely that China has a robust state subsidized medical benefit) same too for those from India.

.

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I don't agree with this part. I can tell u the vast majority of FTs are earning money here and remitting it back to their home countries. There are no numbers on it, but its possible that FTs remit over $500 million a month (1.5 million FTs remit average of $333) back to their homeland. This money is spend on the economy of their home countries and not in the S'pore economy. They come from countries with no immunization programs and poor health care and bring their diseases with them and the associated cost and burden to the health care system. FTs are not the goldmine that native sinkies are.

Papsmearer said:

I don't agree with this part. I can tell u the vast majority of FTs are earning money here and remitting it back to their home countries. There are no numbers on it, but its possible that FTs remit over $500 million a month (1.5 million FTs remit average of $333) back to their homeland. This money is spend on the economy of their home countries and not in the S'pore economy. They come from countries with no immunization programs and poor health care and bring their diseases with them and the associated cost and burden to the health care system. FTs are not the goldmine that native sinkies are.

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Agree with you there.

Many FTs I saw bring their own lunch in packed boxes. Something our kids likely won't even want to eat, like sandwiches, bread with butter with an occassional egg. they squeeze into MRT/buses and go the Changi beach for their weekends.

Contribute to via their spending ? I think it is more a liability to the system, including forcing many citizens to stay at home twiting their thumbs without a job.

i dun see myself retiring, in fact i am prepared to work till I pass on. Things i will like to do when i am at retirement age,I will apply to become a posty,riding my scooter,sian a bit of indon or philipino maids from house to house.ha...ah...

Ramseth said:

If you work till you die, basically you need to save $0 for retirement, unless you want an extravagant funeral.

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Papsmearer said:

I don't agree with this part. I can tell u the vast majority of FTs are earning money here and remitting it back to their home countries. There are no numbers on it, but its possible that FTs remit over $500 million a month (1.5 million FTs remit average of $333) back to their homeland. This money is spend on the economy of their home countries and not in the S'pore economy. They come from countries with no immunization programs and poor health care and bring their diseases with them and the associated cost and burden to the health care system. FTs are not the goldmine that native sinkies are.

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agree that sinkies (who stay) are debt slaves and cash cows of the current regime. when many of the younger, more educated, more qualified and more capable folks left sg, they took their wealth, tax base, potential enterprise spirit and earning power with them. when they brought along their families out of the sinkhole, they added to the hole by not needing maids anymore, thus reducing or eliminating maid levy payments. their cpf withdrawals, absence of purchasing power and consumer contribution, multiplied by the numbers and years, can also be felt.

You validated my point - that Singaporeans did not leave in large numbers but FT was placed on top of them. Your first post was that Singaporeans left in large numbers and thats why FTs had to be called in.

I have no doubt that a significant numbers amongst the better qualified leave. But most can't even if they want to. They however can make a difference at the polls without or without the FTs. Thats my point.

Papsmearer said:

Check your numbers. The figure was 2.3 million for the longest time, than all of a sudden popped up to the 4 million range. To achieve an additional 1.7 million population, it took a very short time. Achieved only thru mass importation of FTs. .

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I think the main problem is that people, especially people in SG, are too scared.
Too scared to die, too scared they have no money or possessions, too scared that they will lose out, too scared of the government and in some cases, too scared of their wives.

To summarize, kia see, kia boh, kia soo, kia cheng hu, kia bor.

Why be so scared?

scroobal said:

You validated my point - that Singaporeans did not leave in large numbers but FT was placed on top of them. Your first post was that Singaporeans left in large numbers and thats why FTs had to be called in.

I have no doubt that a significant numbers amongst the better qualified leave. But most can't even if they want to. They however can make a difference at the polls without or without the FTs. Thats my point.

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No, I haven't validated your point. What I am trying to say is that if NO singaporeans left, the total of native born singaporeans will be close to your 4 million number. But now, the 4 million number is acheived thru importation of FTs, meaning the difference has left singapore. Yes, some of the brightest and most courageous have left the country, never to return. They have kids in their new countries, kids that should by right be born in S'pore and hence be counted in the population numbers. Unfortunately, its a catch 22 situation. The ones that stay are the timid ones, ones who do not dare to take a chance and suffer hardship in another country. These people are not likely to vote anything other than PAP. The ones that are likely to vote against the PAP are the same ones that have left. It is their rebellious spirit that has given them the confidence to leave the motherland.