Prime Minister Lee Hsien Loong outlined several plans at the recent National Day Rally, and one of them is to raise our “retirement age and re-employment age to 65 and 70 respectively by 2030”.
If you have trawled through the comments sections of local media publications enough, you would already be able to foresee the kind of ruckus people will make over this.
For example, the most common narrative will sound like this: “This is gahmen’s way of forcing you to work till you die!” And in this case, it’s easy to translate this to mean ‘working until 65 before one can retire’.
But What Do The Changes Mean For Us?
Accompanying this change is an increase to the CPF contributions for older workers as well, but there are no changes to the CPF withdrawal policy. Thus, as written by Investment Moats, the government (or PM Lee) is effectively saying: “I will raise the retirement age, I will give you more official protection on working longer, yet you can still withdraw your CPF as same as the current plan. It is your choice whether you want to delay to 70 years old or not. It is up to you.”
And for those who wish to retire, nothing is stopping them.
Ultimately, these changes are merely a way for the government to create a more inclusive landscape for the older folks who still want to continue working in their sixties.
However, therein lies the problem as well.
Do People Really Want To Continue Working In Their Sixties?
In a dipstick survey I did with 20 Singaporean millennials in their twenties and early thirties, the general consensus (more than half) is that while this is a positive change, it also worries them because in a way, it is a reminder of the very real worry of not being able to retire early (or at all).
It’s undeniable that this is a well-intentioned change to help citizens cope with the rising costs of living, but it also shows the sad reality of how it is the only way forward for some people: to continue working to survive.
For one 25-year-old white-collar worker, the government may frame it as people wanting to work longer, but “it’s more like they are saying ‘please let me work’ because they don’t have enough financial support and still need to earn money—it’s a need, not a want.”
Times are different now
For Johnathan, 29, it makes sense to raise the retirement age because of the increased average life expectancy in Singapore today.
“In the past when people die at 65, the retirement age of 55 makes sense. You work for 35 years and retire for your last 10 years. That’s an approximate 3:1 ratio. Checks out.
Today, we have people hoping to work for 45 years (20 to 65) and retire for 20 years (65 to 85).”
That’s an approximate 2:1 work-retirement life ratio.
In other words, unless you’re saving 50% of your salary right now, it doesn’t make practical sense for you to be retiring at 65 or even earlier.
With that said, the financial capability to retire depends on one’s earning power in our prime working years, which is also determined by many other factors as well.
“I think the entitled mindset frames this as ‘I work hard for 40 years and yet don’t have money to retire,’ but the truth is, what you choose to do in these 40 years matter too.”
For instance, if one hadn’t studied or worked hard in earlier years, one would be less financially capable of retiring early than those who had worked for it.
Another, a 22-year-old university student, added that she supported the move also because it encourages the older generation to stay active.
“Everyone I know that retired early and did not have some sort of hobby or passion has experienced some sort of mind degeneration. I think it’s super sad.”
Oh the other hand, I managed to speak to one Singaporean in his fifties, who opined that this move, while positive, is also “the government admitting it cannot support the citizens sufficiently,” and that “the CPF scheme is a partial failure.”
He explained that there must be a reason why the government is legislating an extension of the retirement and re-employment age, and at the ‘expense’ of individuals and businesses: “it comes with an increase in CPF rates, which will reduce take-home pay as well as increase cost to businesses.”
Simply put, raising the retirement and re-employment age is a solution for citizens who aren’t financially capable to retire in their sixties, which is also an acknowledgement that it is very probable for one to not be able to afford retirement in Singapore.
Does This Change Quell The Worries Of Singaporeans?
Moving forward, whether this change will really benefit the older workers (and us, in time to come) also depends on how it is going to be administered on the ground.
Despite the government’s efforts, the same intentions may not necessarily be embraced by employers.
A 25-year-old working in the engineering industry revealed: “Personally, I’ve witnessed some colleagues who had to leave at their retirement job despite enjoying their work because they had to take on similar job loads but at a lower salary.”
Because of re-employment plans, these employees were shifted to a contract basis arrangement and in those cases, “the workload wasn’t halved, although the pay was halved.” In such a situation, what choice do the older employees have? Either they continue slogging it out under a clearly unfair arrangement, or be indirectly forced to retire from that job.
There are practical benefits for companies to retain older employees, like the sharing of expertise. On the other hand, for an experienced employee to stay longer in the company could also mean less opportunities for younger employees to rise in ranks, especially in PMET positions, which makes up most Singapore citizens. Longer term, this could give rise to dissatisfaction in career mobility.
It’s encouraging that our government are aware of these challenges, and are looking into helping businesses transition with the new changes, and offering better training opportunities for older workers.
However, beneath all of this, we are also fighting a war against ageism, which was very accurately discussed in a Business Insider article on the barriers older Americans face in finding high-paying jobs.
The article is based on the context of the US but we face a similar problem: We can always retrain older workers. We can arm them with new skills to take on jobs that are more suitable for their age and physical ability, but they will still face stiff competition against younger workers.
“Even for highly skilled senior workers, activists say ageism can be a barrier to entry for high-paying jobs.”
Ultimately, there’s really only so much our government can do. The rest is up to companies and employers to dedicate time and effort in cultivating an inclusive workplace for older workers. And it cannot only be lip service.
On an individual level, it is an inevitable fact that we are now living in a time where cost of living is high. Retirement and re-employment may seem like something too far off in the future for us to think about now, but it isn’t. Because this is a reminder for us to either work hard now and conscientiously save up for our preferred choice of an early retirement in the future, or continue working to survive in our sixties or even seventies.
At this point, it is no longer just the problem of our government. It is all of our problem.
Also read: ‘Money No Enough’ Is Real – Why We Can Never Seem To Save.
(Header Image Credit: Jay Wen on Unsplash)