Many polled worried if they can live long enough to get savings, but know move is to address ageing
ME, LIVE past 80?
That was the big question that gripped Singaporeans yesterday as they reacted to news that it would take a few more years before they can reach into their retirement savings in their Central Provident Fund (CPF) accounts.
They also wondered: Will I ever get to enjoy all of my hard-earned savings?
Mrs G. Dev reflected the views of the vast majority of the 50 people polled by The Straits Times yesterday.
‘If I was in the pink of health and could carry on working till 65, it might be okay,’ said the 50-year-old senior midwife. ‘But I’m already having some health problems, so what if I get too sick to work? It means I will have no money to fall back on. ‘Also, I have no idea how long I will live…With this delay, I might not even live to see the money.’
The cause of her concern was Sunday’s announcement by Prime Minister Lee Hsien Loong that the draw-down age for the CPF Minimum Sum will be postponed from 62 to 63 in 2012.
It will then be gradually raised to 65 by 2018, he said at the National Day Rally.
The majority’s reaction echoes the findings of a recent Straits Times Insight survey in which four out of five people polled were opposed to the raising of the draw-down age for the Minimum Sum.
The Minimum Sum is the amount people must keep in their retirement accounts after withdrawing their CPF at age 55. The current minimum sum required is $99,600. Before the change announced on Sunday, people get a monthly payout from the minimum sum at age 62.
Although unhappy, many of the 50 polled said they understand that the Government has to raise the drawdown age because of a rapidly ageing society.
Average life expectancy has gone up from 61 when the CPF scheme was introduced in 1955 to the current 80.
That means many Singaporeans will have exhausted all of their minimum sum amount at the end of its 20-year pay out period.
Said business consultant Wong Kai Hong, 53: ‘I’m not very happy, but we have to face reality. I still feel very young…Look on the positive side. You stand a better chance of living beyond 80 now.’
Yet, the raw insecurities of one’s mortality often dominates.
Said retired secretary K. S. Yeo, 56: ‘The Government needs to consider premature death. What about people who die before that age. You hear about a lot of people getting cancer these days.’
Other unhappiness stems from mistrust of the Government’s intentions behind the change, as well as anger over what they see as the authorities’ overly paternalistic bent.
‘It’s my money. Whether I choose to not take it out or to take it out and put it under my mattress should be up to me,’ said 45-year-old realtor Veron Chew.
CPF members are entitled to withdraw their CPF savings when they reach 55, after they leave aside the Minimum Sum.
Jalan Besar GRC Member of Parliament Denise Phua urged Singaporeans to think long term, saying: ‘The increase of the draw-down age might be a bitter pill to swallow but will do good for the long-term health of senior citizens, in terms of sustaining their retirement needs.’
But more than frustration, there was also confusion. Most still could not fathom many of the ins and outs of the CPF scheme.
Said despatch supervisor Abdul Razak Bakar, 54: ‘The changes to the CPF are happening too fast, I can’t keep track of all that is going on.’
Mr Edmund Lim, 34, a teaching fellow at the National Institute of Education, believes it is important to educate Singaporeans on how to invest wisely.
‘This will do more to help improve the CPF savings than raising the draw-down age and increasing the returns by 1 percentage point. Education, in this context, may be more effective in the long term than legislation,’ he said.
Source: The Straits Times 21 Aug 07