Are you ready to live up to 100 years? Do you have enough savings to have a VERY long retirement? Do you have skills to enable you to remain employable in your golden years? A more pertinent question to ask is whether YOU are prepared to live for 100 years.
It is a global phenomenon that life expectancy is increasing in many countries. Studies show that global life expectancy will increase, on average, by 2.5 years every decade – that’s an increase of three months every year or six hours every day. Singapore’s life expectancy is increasing by 3.5 years every decade. So if you were born between the 1960s and 1990s like me, half of us can expect to live for over 90 years. For those born from 2000 onwards, 50 per cent can live beyond 100 years.
If our workers are living up to 100 years old, it means that we have to work longer, or save more. Different groups of workers will be affected differently, but all workers must be imbued with the correct mindset because upgrading and reskilling will be a norm in order for us to fit into the new jobs and possess the skills required for the future economy. Otherwise, it would be stormy weather ahead as we live through our 100 years. Some of us are already experiencing this. Even after reskilling, there may be substantial switching costs when one moves from one industry to another requiring a different skill set. If we are mature workers holding a senior manager’s position, then we need to be mentally prepared to assume more junior roles to make way for younger colleagues. A whole gamut of emotions, pride and sense of entitlement will interplay when a worker moves from one stage to another.
Changing Mindsets and Taking Action for the Future
Having said this, Singaporeans will have to treat skills-related perks like the SkillsFuture Credit with more clear-headedness. It’s time to make better use of this fund to gain some skills that will actually help with employability in the next stage of life (for example, take on floral arrangement classes only if you are keen to look for a job in the floristry industry and not because you just want to use up your SkillsFuture Credit!).
However, it takes more than personal action to be prepared to live for 100 years. Current mindsets that shape and dominate HR policies may need to be radically transformed. We have to discard typical organisations’ obsession with employing younger workers and make way for an older, wiser generation. Imagine a 100-year-life norm – what then are the opportunities for companies? How would companies leverage the strength of having several generations co-exist in the workplace? There are no easy answers, but taking action now will give a higher probability of success, rather than ignoring the fact that many workers will live up to 100 years and there will be less younger workers, given the falling birth rate. Companies will have to learn to think of job redesign in a much bigger way. There will be no running away from robotisation of jobs that can be mechanised.
At the national level, current policies must be refined, and even revamped to prepare for these 100 years of life. In gist, if we want a different outcome, we must DO THINGS differently; and in order to do this, we must THINK differently. To think differently, we have to QUESTION our assumptions behind these policies.
Currently, Singapore’s retirement age is 62, with the option of re-employment up to 67 years old. Extending the “working age” has received mixed responses from workers. Given the future reality, our retirement age must increase over time to suit the age cohort given the probability of more workers living up to 100 years old. Increasing retirement age will ensure a steady income stream to sustain our livelihoods. Efforts to redesign jobs to suit an ageing workforce must be made a national imperative and it should happen sooner than later. WorkPro policies to encourage elder-friendly HR policies and workplace environments must be more aggressive. If moral suasion does not work, perhaps opting for legislation may be the most viable and practical option to create an environment conducive for our workers to lead this 100-year life. Otherwise, left unattended, many workers will be vulnerable to poverty in their old age.
The Need to Relook at Retirement Adequacy
Our CPF policies for retirement adequacy must be relooked at. It is highly probable that a $1,200 payout under the Full Retirement Sum Scheme will not be enough as inflation would decrease the real value over time. It is a no-brainer that the amount of goods and services that $1,200 can purchase will be much less in 40 years than now. As such, policy makers must think hard about how the retirement payout can be increased over the retirement years but, this must be done sustainably.
Perhaps, we should consider increasing our full retirement sum by increasing the percentage contribution to the Special Account; this can be done through increasing employers’ CPF contribution gradually to 20 per cent. As such moves will definitely be resisted by employers, the government can perhaps legislate for CPF contribution rates to be the same for all workers regardless of age. Otherwise, the government has to shoulder the responsibility should 50 per cent of its citizen population not have adequate retirement savings to last a 100-year life.
Property is an asset that many Singaporeans would have. This is also an asset that could be monetised for retirement expenses. However, the current HDB Lease Buy-Back scheme is too limiting because it is extended only to elderly living in four-room flats. This of course must be based on some assumptions that policy makers have about the elderly living in HDB flats. A more aggressive approach would be to extend the lease buy back scheme to all elderly living in HDB flats. Allowing the elderly to continue living in their HDB homes till their sunset years would be a very compassionate move and at the same time, help them have enough income to sustain daily living.
I have just touched on some possible implications of having a 100-year life. Its impact can be felt at every level from personal relationships to national policies. Your 100-year life story depends on what actions you take now to take advantage of this “extra time” in our life. Do you sense the urgency already?
This is a post by National Trades Union Congress (NTUC) Assistant Secretary-General Zainal Bin Sapari. Any extracts should be attributed back to the author. 9 January 2017.