Financial Freedom SG

If one looks around in Singapore, you tend to see some senior citizens (I'm using the politically correct term) cleaning after you at hawker centres, fast food joints and even some restaurants. I feel a bit embarrassed when I am at tables that they clean and will always mutter a thank you to them. It is a little sad in a way that they have to work so hard at that age. I am not against old people working, in fact, I want to be able to work till 67 and beyond. But the kind of job that I am looking at would be those that are not as physically demanding as those that these senior citizens has. In a way, I admire them for being able to be physically fit enough to do these tasks, which I can tell you is not easy, having worked as a waiter during holidays to earn a quick buck. Standing for 6 hours or more at a stretch is no easy task, especially when you are constantly on the move.

The move to raising retirement age to 67 could be a step too far for people who move on to a better/worse/nothingness (depending on your belief system). Having worked so long, more than 30 years, just when they can enjoy a bit, they pass on without having being able to touch their retirement funds. I would have prefered a scheme whereby the senior folks have a option to draw part of their CPF savings at 55 for whatever purposes and leaving the rest till they hit 67 years. At the moment, I don't have all the details, so I don't have the full picture of what this raising of the retirement age will mean.

The conspiracy theorists out there and the coffee shop speculators will again be spinning their theories about there 'being losses on investments so that the CPF monies have to be withhold till later when it recovers'. But it is definitely not that. It is because of the twin reasons that people are really living longer and also, the population is ageing so getting the older population to work, increases the labour force- ie the people who pay taxes and consume (transport to work, money spent at work) will help the economy maintain its growth. Labour supply is increased, so using economic theories, the price of labour will be kept low. And this will lead to higher or relatively constant investment levels. So it is pretty obvious why the government wants to do this. It has no choice in the matter. Thus, not much of a decision to make.

But is there an alternative to raising the retirement age to increase labour supply? The alternatives are to either increase the population the natural way- more babies (of which the policies so far has been a complete failure) or the quick fix- foreign talent. We will look at the effect of foreign talent on prices of wages and their effect on the economy in a later post. I haven't been posting because the blogger site was unstable for the past few days. My apologies for the readers who encounter any difficulty reading this.