Do I need to plan for Retirement till Age 99?

Retirement to me, is when as an individual, I am able to choose whether I “want” to work and not whether I “have” to work. Some people amassed enough to live by, based on their current lifestyle for the rest of their lives, but still remain in the workforce to keep themselves active. To possess this choice, you probably need to have:

  • Your own home which is fully paid up
  • No more debts
  • Adequate health and medical insurance coverage
  • Enough savings or continuous income flow to sustain your retirement lifestyle

The aged-old saying for early retirement planning still holds true: put time on your side… When time is your friend, the earlier you start the more you end off with. However, it is not uncommon to have doubts:

  • How much is enough really enough?
  • Will inflation erode my retirement funds faster than expected?
  • What if I outlive my retirement funds?

Do I really need to plan my retirement till Age 99?

Everyone wants to live a long life — while long is subjective, what they mean is probably to live life as fulfilling and satisfactory long as much as possible. Competing to be a centenarian is probably not on the minds of anyone, I believe.

So, does your retirement funds need to last you till age 99? The good news is, you don’t have to plan till so far. The bad news is, you are probably “gone” by age 83 plus or minus. The average life expectancy for Singaporeans is 83.6 years for year 2019, 82.6 in 2014 and 81.4 in 2009.

One one extreme, we have Singaporeans doing far too little for their future — their retirement plans won’t last beyond a few years due to ‘excessive’ lifestyle or pittance retirement pot. On the other extreme, there are few (but small numbers) who over-plan. I have to quantify, over-planning is never a bad thing — it’s a matter of whether you are sacrificing too much (when you are young) for too little additional (for when you are old).

If you retire at age 65, you would do well to ensure that your retirement pot lasts well for another 18 years. And so on for any other retirement age. Planning for another 34 years (till 99) sounds abit far-fetched now, seeing that it is not very probable.

Source: Department of Statistics (Singstat)

Do I have to plan for a longer retirement today as compared to the past?

Yes, yes, YES!

The infographics above has clearly shown that both male and female residents in Singapore are gradually showing a higher life expectancy. If we look at the population level, 16.4% of Singapore Residents are aged 65 and over in 2019, 9.1% in 2010 and 7.7% in 2000. The average age is inching higher year-by-year, from age 34.0 in 2000, to 37.4 in 2010 and 41.1 in 2019.

It is a undisputed fact that people are indeed living longer — whether it is due to better education, housing, healthcare provided today as compared to yesteryear.

Source: Department of Statistics (Singstat)

Females statistically live longer — the numbers double / almost double especially for the various 5-year age categories above 80.

How Singapore’s population demographics progressed over the last 20 years (2000 — 2019)?

I have included the progress of the population demographics over the past 20 years. The top (> age 65) is getting fatter, while the bottom (< age 15) thinner. It is a clear indication of an ageing society. It is good that people are living longer; it ain’t so good when it is accompanied with a dwindling birth rate.

Aging population

Source: Department of Statistics (Singstat)

The Resident Old-age Support Ratio shows how many young residents are present in relation to each older resident. In a span of almost 10 years, the ratio had dipped from 7.4 to 4.5. One direct impact will be on taxes. We expect most if not all older residents to fully retire from active work or at least have a chargeable income low enough not to warrant the paying of income taxes from age 65 onwards. This potentially places a higher tax burden on the future younger residents who have to pay more to maintain or even increased government expenditure on societal good.

We have not included the burden for schemes to take care of people who had fallen behind on their retirement funds for daily expenses or even for healthcare needs. It is on the government to take care of its citizens and ensure that no one gets left behind, yet we know that the source of funding still comes from its citizens.

What is my take for the future?

In comparison to my parents’ and grandparents’ generation, we have a better change of living longer, more healthier and better. Healthcare in Singapore is one of the top-notch in the world, coupled with early detection technology, the chances of discovering illnesses or recovering is also higher.

On a good gauge being age 35 today, there’s still a good 47 years or half-way through a life-long marathon.

Source: Department of Statistics (Singstat)

As an individual, I refuse to fall between the cracks during my retirement. In addition so as not to burden on society and the next generation, we really need to play our part as individuals. I do not want to create a future whereby my descendants are burdened due to the incapability of our generation to plan ahead. This is also an irony when people today are more well-educated and experienced as compared to the earlier generations.

Planning for retirement is not only (being responsible) for yourself, but also for your family and of course society. Life is short and as we go through the various stages in life, we find that there is only so much time to plan for it backwards and make it fulfilling as best as we can.

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