a) Longer life expectancy
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).
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."