If Singaporeans expect to live to 100, can they still afford to retire in their 60s?
The question was posed by Mr Wilf Blackburn, chief executive of Prudential Singapore, at the discussion on ageing: Who can afford to fund four decades of retirement?
The answer is, not many – but allowing people to work as long as they are able would help.
Last October, Prudential Singapore began letting their employees work beyond the age of 62 on their existing contracts.
“We recognise many people want to work in their 60s, 70s and 80s, and are able to perform,” he said.
According to the Ministry of Manpower, about one in four workers last year was aged 55 and older.
In this year’s National Day Rally last month, Prime Minister Lee Hsien Loong announced that the retirement age will be raised from 62 now, to 63 in 2022, and eventually to 65 by 2030. Meanwhile, the re-employment age will also be raised from 67 now, to 68 in 2022 and to 70 by 2030.
Older workers will also get help in building up their retirement funds, with their Central Provident Fund contribution rates set to rise.
But income is just one side of the coin. Most people are also concerned about their expenditure in their retirement years, especially on health care.
This includes insurance premiums, which are likely to go up when people use more healthcare services and make more claims with age.
To encourage prudent use of healthcare services, Mr Blackburn said claims-based pricing was adopted by Prudential a few years ago.
Under this pricing strategy, premiums for the Integrated Shield plan rider for private hospitals are lower for those who do not make claims.
He added that more than 80 per cent of Prudential Singapore’s clients now benefit from a discount of 20 per cent because of this pricing method, which he said was similar to the no-claim discount approach for motor insurance.
In response to the joke that one can afford to die but not afford to be sick in Singapore, Senior Minister of State for Health Amy Khor said the Health Ministry has “worked very hard” to change this perception.
The Pioneer Generation and Merdeka Generation packages, which offer healthcare subsidies to Singaporeans born in 1949 or earlier and between 1950 and 1959 respectively, were put together to lift the burden of healthcare costs for older Singaporeans and give them the peace of mind that they will be able to afford medical care.
Dr Khor said many other programmes are being run in the community to help older people stay healthy.
“But at the end of the day, we have increased subsidies so that if they need to see the doctor, they will not be denied care because they cannot afford to see the doctor,” she said.
“Therefore, please don’t think that you cannot afford to fall sick. You can. But we hope that you will not fall sick.”
Extracted from Straits times