Tuesday, 28 August 2007

Common Concerns

I saw this post on channelnewsasia.com today:

Job availability and health are two main concerns of ageing workers

SINGAPORE : Most groups accept that working longer is an inevitable reality in an ageing population like Singapore.
For workers who will be directly affected, two big concerns seem to be job availability and health.

Financial planner Yash Mishra says retiring without planning is like a long, and perhaps difficult 20-year-vacation, without a single pay cheque.

Yash Mishra, Senior Vice-President - Private Client Advice, Ipac Financial Planning, says: "And if you have 20 years when you don't draw a pay cheque, you must make the most of it when you have one."

Which is why planning is not really a matter of choice in Singapore's ageing society.

And that is something Potong Pasir MP Chiam See Tong referred to immediately after the National Day Rally.

He says: "Well it's a fact that people are growing older. So the government will have to delay in the paying out - there's no other way. The life span of a person is going to 82 or above 80 - people are living longer. So the CPF is not inexhaustible. I mean if it's too long, people don't save enough money in the CPF, they just don't have enough for their old age, as simple as that."

On Friday, Manpower Minister Ng Eng Hen released some information on how those who voluntarily defer their CPF drawdown age, would get a bonus.

No details were given, and there are many variables.

And financial planners say it could work out to a few thousand dollars.

Yash Mishra says: "What it could translate into is that if you make an assumption that close to 62 years old, an average Singaporean would have close to $70,000 in his account. And if you were to get to defer that in terms of retirement to about 65, at Singapore long term bond rate plus 1%, you could look forward to an additional $7,000 in that account. And that would last you about 7 years in drawdown."

Labour leader Halimah Yacob says most workers accept that they have to work longer.

But most have two questions - "Will I get a job after 62? And if I do, will I be healthy enough to perform?"

Halimah Yacob, Assistant Secretary-General, NTUC, says: "Many of the reactions I get from union leaders are if we have jobs after the age of 62 that's okay, we have a source of income - only when we don't have jobs we have that concern. Some people feel will they be healthy enough after 62? Some may be suffering from chronic illnesses and so on."

Madam Halimah says there is a little-known provision in the CPF Act, that those too sick to work to support themselves, can withdraw their CPF.

The question is, what happens to those who fall in between.

Halimah Yacob says: "I'm not so ill as to be completely unable to work, but my ability to work is very limited and therefore my ability to earn (an) income is also very limited. Those cases I suppose one has to look at it very closely I'm not sure whether CPF can make it flexible in such a case."

A ministerial statement on this issue will be delivered in Parliament in September.

This goes to show that this is a common concern, refer to my previous post PM National Day Rally Speech 2007

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