Monday, August 20, 2007

My thoughts on PM’s National Day Rally Speech

Much of his speech centred on the issue of Singapore’s ageing population; in other words, people of my generation. But yet, for the first time in years, I did not listen to the entire speech. When he started to talk about housing, I went to take a shower. It’s not just that I find it difficult to be excited about what else of the old Singapore they are going to tear down. I am actually somewhat disappointed with last night’s speech. On reflection, my disappointment stemmed not from what he spoke about, but rather what he left out. I will just touch on 2 aspects:

a) Longer life expectancy

b) Children’s role

Point No. 1 - Longer Life Expectancy

PM is right. “People are living longer, we have to work longer, and we’ve to start drawing on the reserves later.” And it is good that the government has the foresight to address this problem early. As Confucius - or was that Lao Tze, who said, “If a man takes no thought for what is distant, he will find sorrow close at hand".

Nevertheless, his speech gave the impression that everyone will live till 80 years at least. Thus the entire policy he proposed was geared towards this statistical fact. If you start withdrawing your savings at 62, you will not have enough to last till 85 or 90, and thus you will become a burden to the state. (this last part was not articulated of course)

PM has ignored one other statistical fact: 80 is an average figure! Using powerful visual aids, including one very active 81-year old lady in the audience, he painted a very rosy picture of healthy, active senior citizens. But the plain statistical truth is that a large number of people will still die before 70; and become very sick in their sixties. Exactly what is the percentage will depend on what in statistics is called the standard deviation. But we can make a rough guess that it will be at least nine thousand five hundred. I say this because, he said that there were 9,000 Singaporeans who were aged 90 and above and another 500 who were above 100. Assuming life expectancy is normally distributed with a mean of 80, then, the number below 70 should be equal to the number above 90.

Thus my question is this. Is it right to tweak the entire system to cater to only to those at the healthy end of the normal distribution; i.e. those ones who will live beyond 80? How about those of us who don’t? Let’s consider a dark scenario. You are approaching 62, and have many health problems and you really don’t expect to live beyond 70. You had hoped that you could withdraw the $99,600 in your Retirement Account, to tide you over this difficult period. But now the government says that you cannot touch it for another 3 years. In the mean time, you succumb to your illnesses and that money goes to your children; assuming you have children.

PM quoted a Chinese proverb; 人生七十古来稀. The Old Testament has something similar; "The days of our years are threescore years and ten; and if by reason of strength they be fourscore years, yet is their strength labour and sorrow; for it is soon cut off, and we fly away." (Psalm 90:10).

I don’t see any wisdom in ignoring this sombre reminder in the twenty-first century. Take myself as an example. I am 55 and apparently quite healthy. But so was my former classmate from ACS, Ananda Rajah. Yet, some months ago, my classmates and I from ACS68 had the unpleasant experience of attending his funeral; and we realised that 4 of our friends had already departed; and that is a full 10 percent of Sec 4C!

Still not convinced? Then go to the Obituaries page in the Straits Times. In today’s edition I counted no less that 6 people aged 70 and below.

Point No. 2 - Children’s Role

PM practically made no mention of the role of children in taking care of their parents financially. He did briefly mention that it is best that they stayed with their aged parents and take care of them rather than living separately or putting them in old age homes. It looks to me like PM doesn’t have much faith in the filial piety of our children. No wonder this year, he did not try to persuade us to have more children.

Again taking myself as an example. I have three children. Some of my friends have no children. Certainly when we reach the end of our careers, those friends would have much more savings than I. Is it selfish or demeaning to expect that our children will at least help pay some of our bills when they become financially independent; especially when PM paints such a rosy picture about Singapore’s economic future?


Right at the beginning of his speech, PM said that the best strategy is to generate more resources to help those in need – in other words, to grow the economy.

I believe this strategy should apply to individuals as well. Educate your children to the fullest of their potential. Didn’t he say that for every extra year of education your child receives, his salary can increase by 14%?

More importantly, teach them to "fear God and keep His commandments" (Ecclesiates 12:13) including of course Commandment number 5; "Honour thy father and thy mother: that thy days may be long upon the land which the LORD thy God giveth thee."

Nevertheless, like all kiasu Singaporeans, we should not put all our eggs in one basket. So be frugal, spend wisely, keep yourself healthy, save up …. and leave the rest to God.


peter said...

I agree with Chun See's observations although I did not follow the speech because there was something more interesting on Channel 27 - English Premier League.

Now I got some questions; hoping those 20something or young couples can help me.

1. How do the elderly survive through major illness without "taxing" their children. I fully understand that after graduation, they have to repay the university loans, buy a car (bcos gf say so), lifestyle dining (like those in Dempsey Hill at least twice a week to meet social friends or else their gf/bf)...ah that overseas travel to some exotic destination. How then help to pay for the medical bills when they need to spend on themselves before marriage? Meanwhile we parents need to dig into our savings or life insurance plans.

2. What about those committed to "More Good Years" slogan of investing their hard-earned CPF into housing? If not for those people how then could Singapore enjoyed the housing boom between 1990 and 1997?

What I now begin to see:

1. Before the young get married, they will stay with their parents. Why not? Meals subsidized, housing subsidized. I like to use the word "sibsidized" because they dont pay market value what.

2. After they marry, where got enough to even give an allowance to their parents let alone pay for a major illness. Come children and then foreign maid (foreign maid levy).....thta new car must upgrade otherwise people think we have not arrived yet. HDB housing - well we still need to eat and pay for foreign maid bcos of children. When children big must send to kindergarten, also need money what!

The solution.

1. Become a "banker", work for some fancy MNC. However the catch is earn $10K/month on reahcing target but career life-span is short. Have you seen a banker beyond 40 years of age today in Raffles Place, Marina Bloulevard or Shyenton Way?

2. Play tyhe stock-market whilst you work for someone. Hopefully you dont need to see Ah Long too often

3. Buy 4D, TOTO or BIG SWEEP and pray for the best

Cheers from BKK Internet Cafe

zen said...

PM mentioned that in Japan there are temples where people can pray for a quick death when the time comes, and he may visit one the next time around in Japan. I am sure if there is such a temple in Singapore, there would be no shortage of believers queuing up to pray in it.
The greatest fear in young people is: not earning enough money, having to look after their own families as well as their aged parents. For old parents their greatest fear is: prolonging old age, ill health, abandoned by their children, and not enough money to cover their medical expenses. PM message is clear enough - 'goat hairs have to come from the goat itself' The govt sole duty is to cleverly juggle the people's money in the kitty, and see that it is not depleted. No wonder the Chinese says: 'A good birth cannot beat a good death'.

peter said...

I am surprise! When did Singaporeans ever thot that the govt should look after their parents, etc?

FEAR? When I went out to work, my first thot was to take the first job that came along so that I would not burden my parents anymore, albeit I come from a well-to-do family. To me it is honourable to earn your own keeps and be able to pay your own bills and and give treats to one's parents.

Did I ever think of the cost of living? NEVER entered my mind. To me my time will come. I dont need to drive a Mercedes on Day 1 when I graduate. I dont need a condo after 1 year of work. To me these things will come if you only seek for work. So what to be worry about?

My worry is when the day comes for parents to leave this earthly world: Did I dishonour them? Did I provide happiness to them (not necessarily money)? Did I make them proud of who I am and the way I raise my own children?

These are the same principles I have inculcated in my kids who are in their 20s. I am no Confucian believer myself and I hate the mention of such things in the first place.

peter said...

Chun See
Ananda Rajah related to MP Indranee? If yes her elder sister was Rajahkumari died at a tender age of 20+. She was my classmate.

Lam Chun See said...

Yes. She delivered a moving eulogy.

Victor said...

Chun See, that was a nice addendum to PM's National Day Rally, covering points which he missed out.

On making babies, he did say that he was not going to talk about the subject (not because the problem is solved) but he quoted Nike's tagline, "Just do it".

I also feel that the government is making too many personal decisions for the individual. It is becoming overly intrusive. After all, CPF is my own money. If I am foolish enough to splurge it on a mistress in a neighbouring country, so be it.

I just hope that they are not also considering changing the rules to the Supplementary Retirement Scheme which is withdrawable from age 62 over 10 years. (That was the rule since the scheme first started about 5 years ago.) You will understand why I am so concerned when I tell you that I am one of the few rare ardent supporters of this scheme.

Victor said...

One more thing which I forgot to say - I fear that we may become the "new sandwich class", i.e. people who live long enough to see the CPF rules change (for the worse) but not long enough to benefit from the new changes.

Lam Chun See said...

Victor, even if you wanted to splurge all your CPF money on your mistress you can't. When you reach 55, you have to set aside $99,600 in your RA (that's Retirement Account, not Restricted whatever). That amount is being raised continuouslly. When your turn comes, it will definitely exceed $100k. You cannot touch it until you reach age 62; by which time, even if you still have the virility to splurge it on your mistress, you are only 'given' about $980 per month to do it.

Personally, I think the system as it is is safe enough and our govt is being too kiasu and too calculating, to the point of being uncaring. I mean so what if a small group of people used up all their money in their Retirement A/c by the time they reach 80? So what if the govt has to bail them out for a couple of years? How much money are talking about? It's literally peanuts compared to the huge salaries that the higher echelons of our society are earning.

It's peanuts compared with the huge amounts we are pouring into building beautiful schools and univerisities used to benefit foreign students and children of immigrants. If we can be so generous to 'outsiders', why can't we show some compassion towards the weaker members of our previous generation whose hard work and sacrifice made it possible for us to do so in the first place.

I recall seeing this visual at the beginning of the speech of some people at the top of the ladder stretching to pull up those who were below. Do you think the proposed changes to the CPF scheme reflect that noble spirit at all?

zen said...

It is said that a lion does not fear challengers from outside, but the parasites from within, which though small, can bring the big beast down like a piece of cake. This principle applies to human beings also. There are 101 enemies from within our bodies ready to strike with the slightest opportunities, to bring us down, especially through aging. A case in point, recently a bubbly HK actress is brought to her knees by an aggravated bile (just a small organ) problem. The govt knows very well of the medical and related problems arising from a aging population. Hence s huge safety net is put in place having mesures such as: medisave, income shield (including rider), insurance scheme, CPF payouts and an assortment of others. The message is loud and clear - everyone has to sail their own boat across the turbulent sea themselves, with the govt to prop them up only when neccessary (very appreciated). How many of us can be lucky enough like the highly spirited grand old lady of Radin Mas still working healthily around at the age of 91. Perhaps she has divine help and infused with good genes. Full govt support (people's money) can only come to those who are: homeless, jobless, without families or siplings, aged, disease strikened and dropped by the roadside.

fighting fit said...

I also find it hard to believe so many of us will live past 80 that it will become a burden to take care of us. According to the Yearbook of Statistics Sg, an estimated 56,700 people are above 80 yrs old. That is 1.6% of the Sg Resident (citizens + PR) population. So that's like less than 2 out of 100 people will be so old that the CPF money will not be enough to live on. What is the chance that this one or two persons will not have any children to look after them?

You made a very valid point Chun See. The system should not be tweaked for this. If there are people who don't know how to spend their money, educate them. Isn't that what the govt advocated in the past?

Anonymous said...

just happen to read ur blog today...

My dad die at the age of 54 yr old and my mum gt some health problem that cant even work before she reach the age of 60.

So I quite angry when i heard that the retirement age increase again and again....Ppls around me dun live that long and i dun wan to live that long either...

What is the percentage of the ppl getting the money from CPF?? If ppl cant live that long, the money will leave to their children or if they have no children den it will goes to the charity. This will nt become the govt problems but ageing is govt problem. Old uncle take the CPF $$ go spend on mistress and old aunties kena con...Is also the govt problems...

I am in my late twenties and i cant image another 35 yrs of working lifes...Aunnal increment of 3-5% is it enough for the high expenses in s'pore??

I love s'pore bt why is it so hard to live here happily....

fighting fit said...

If you are unhappy, don't keep it inside. Think about why you are unhappy, what you are unhappy about, and if you have very valid arguments, voice it out convincingly. In the forum, in cyberspace, at the kopitiam, to your MP. Don't keep it all inside. You might die younger if you bottle it up--and you know what that means! No chance to live life to the fullest, cannot enjoy your CPF. And heck, we don't want that, do we?

Lam Chun See said...

It's been more than a week since PM's speech. We read lots of comments from ministers, journalists, and even forum letters. But no one seem to be concerned about the issue I brought up. What about those who die before 70? There are thousands of them. Why are the opposition MPs so quiet.

fighting fit said...

If the annuity thing takes effect, or rather, when it takes effect, I remember reading one sentence saying those who die before the annuity starts paying out will get nothing. The money goes back into the pool. Is that what you are asking?

Lam Chun See said...

No I am talking about the minimum sum which you cannot touch until 62 (to be raised to 65). After that you get monthly payouts for the next 20 years or so.

fighting fit (maybe not for long) said...

I think the general understanding is if we croak before 70, the remaining money in our CPF will be distributed by the Public Trustee to our families according to intestacy laws. If you want it differently, must state so in CPF nomination form. CPF money is not covered under your will.
Arguing to take the minimum sum out earlier probably will fall on deaf ears.

Anonymous said...

Hi Mr Lee,

Ur qs : What about those who die before 70? U have to fill up the CPF nomination form in order for ur kids or wife to get the money. If ur kids are under 21 yr old, they can take the money out...

If there is no nomination, den it will go to charity...

If u r that suay, u and ur wife die before 70 and ur kids are under 21 yr old..maybe ur kids can request help from the MP...or depend on the public or depend on their fate.