Only 4 in 10 Singaporeans have enough money to retire in Singapore.

From The Straits Times:

By 2030, one in five Singaporeans will be aged 65 and above. According
to surveys, many older Singaporeans do not have enough in their
savings to retire on. The solution? Work longer. But what does that
mean for employees and employers? Aaron Low finds out

LIFELONG employment used to mean working in a single company until you
hit the retirement age.
Out of fashion for a while due to the dynamics of an ever-changing
economy, it is making a comeback, albeit in a different form: Having
to work for as long as you can.
Over the past two years, the Government has introduced a slew of
measures such as Workfare to encourage more people to work longer and
to get companies to keep their employees on the job.
The reason? An ageing population that is living longer, and many of
whom have insufficient funds to see them through their later years.
Only four in 10 active CPF members – those earning an income and who
turned 55 in 2005 – had the Minimum Sum of $90,000 in their CPF at the
end of last year.
With a longer average lifespan of 82 years today, this means that 60
per cent of CPF members would be short of the minimum amount needed to
fund their retirement over the next 20 years.
So for many people, retirement either at the current official age of
62, or earlier, is no longer a viable option.
It is the end of the idea of being able to put their feet up after a
30- or 40-year stretch in the workforce.
Are they prepared to work on into the twilight of their lives? And
even if they intend to, are employers willing to take them on?
Changing expectations
SECURITY supervisor Chua Seng Kee, who earns about $1,500 a month,
wants to take a trip around the world to visit friends and see places
when he retires.
The only problem, says the 49-year-old, is that he does not know when
that will be. Maybe in 15 years' time, maybe in 20, when his children,
now aged 10 and 12, get jobs.
"But I don't think I can stop working altogether. Maybe I'll do
part-time work because we'll always need some money around, like for
medical expenses."
The worries Mr Chua has about finances reflect the concerns of many here.
A survey on retirement by banking giant HSBC of 21,000 people in 21
countries – including 1,004 Singaporeans aged 40 to 79 – found that
the idea of retirement, or early retirement, no longer holds true for
most.
According to the bank's Future of Retirement survey, more than six in
10 Singaporeans said they want to work for as long as they can.
For more than half of those polled here, this was because they fear
not having enough post-retirement funds. This was especially so for
those aged 60 and above.
A major problem is that many people still do not plan for retirement,
especially older-generation Singaporeans, says Mr Joseph Chong, chief
executive of New Independent, a financial advisory firm.
A separate survey by French financial firm AXA Group recently showed
that only half of working adults here plan for retirement.
"People don't realise that with just 15 per cent of savings, a
financial plan and some sensible investing over one's working life,
retirement, or early retirement, can still be achieved," says Mr Chong.
"Unfortunately, most still don't have such a plan."
But even those who do have enough to retire on want to continue
working, simply because it gives them something to do.
Consultant Louis Tan is one such person.
The 61-year-old wants to continue beyond the retirement age as he
believes he has the skills, knowledge and ability to contribute to his
employer.
Mr Tan, who left the civil service two years ago, works for a water
management company and does not mind the hefty pay cut.
He is earning about $2,000 a month – half what he used to earn as an
engineer.
"It's not the money. I still have skills to contribute, and work keeps
my brain ticking and my limbs moving," he says.
"I still want to step down at some point, when my body cannot take the
stress.
But for now I'm content working for as long as I can." Changing
attitudes
SO WHILE there are those with older limbs who are ready for an
extended run in their careers, the question many have is whether
employers are willing to take them on.
The picture was mixed when the Manpower Ministry surveyed 2,900
private sector employers last year.
While almost all of those polled – or 97 per cent – had workers aged
40 and above, only half of the respondents had workers who were in
their 60s and above.
MP Halimah Yacob (Jurong GRC) tells Insight that while this shows that
companies are increasingly seeing the value of older workers, a lot
more needs to be done to help more people find work.
The NTUC assistant secretary-general says it is "disappointing" that
just 60.6 per cent of those in the 55 to 59 age group are still
employed, compared to other developed economies. The employment rate
for those aged between 60 and 64 is lower – at 41.9 per cent.
Economists and human resource experts explain this by saying that
there are rigidities in the market when it comes to older workers.
One major issue, as shown in the MOM survey released last month, is
that many employers say older workers are not able to meet physical
demands like heavy lifting or standing all day.
Other reasons include high medical costs, older workers being
inflexible when it comes to changes, and their not being open to training.
There is financial assistance from the Government to help companies
cope with the adjustments they have to make.
Companies can draw up to $400,000 from the Advantage! scheme to, for
example, redesign jobs, introduce flexible working hours and buy new
equipment to make it easier for older workers to work.
But employers say that while the funding is available, it usually is
not enough to pay for restructuring the workplace.
Says Mr William Lim, chief executive of curry puff maker Old Chang
Kee: "The money helps, but it is not going to cover all the costs of
hiring an older worker, like upgrading machinery to help them do their
jobs better."
Old Chang Kee has about 400 staff, of whom four in five are older workers.
It redesigned its job processes and last year added machines, like
conveyor belts, to help older employees.
Mr Lim estimates that the funding scheme covered about a quarter of
his costs.
"Eventually it boils down to an economic decision: how much value does
the older worker give to the company. We make our decision based on
that," he tells Insight.
A law will also come into force in five years' time to get companies
to re-hire workers past the age of retirement.
But while employers like local jeweller On Cheong say they want older
workers, they worry that the law will take away the flexibility a
business needs when it comes to hiring and keeping staff.
For example, if a worker can no longer be at the frontline due to age
or health considerations, the ideal situation would be to move him to
a backroom job.
"But what if there are no places? And industries like fashion and
beauty may not suit older workers because they sell youth," says On
Cheong's managing director Ho Nai Chuen.
He is quick to add, however, that his company values workers with
experience, as customers welcome their advice when it comes to buying
expensive gems and jewellery.
So as long as an employee can do the job and has a positive attitude,
Mr Ho will give him a job or keep him on at work.
But what of an older worker with little training?
Mr Ho is not too keen on them then. "If they are not trained, it is a
risk for us since we are not sure how long they can work for us as
there is always a concern over their health," he says.
But the biggest rigidity in the market for older workers may not
actually be their age.
It is their qualifications.
National University of Singapore labour economist Park Cheolsung
points out that the current crop of older workers are baby boomers who
worked in the old economy.
This means many do not have the skills to work in the new economy,
which requires a high level of technological knowledge. The MOM survey
bears this out.
It showed that the lowest incidence of older workers, by industry, was
in the information communication industry.
Just one in four employers said they employed a worker aged 60 and above.
MOM says this was because the industry is relatively young and
requires workers with the latest technical skills and knowledge.
"I think the push now to get workers employed is really for this
current generation of older folk," says Dr Park.
"But I expect future generations of Singaporeans – who are far more
educated – to have less problems finding employment when they are in
their 60s.
"In fact, the problem in the future may be that too many workers want
to retire, leaving a gap in the labour force."
For now, at least, the "death" of retirement is a sad situation, notes
NUS sociology professor Paulin Straughan
Sad, because many of the current generation of older workers had grown
up in the belief that all they had to do was to get an honest job,
work, and depend on their children to support them when they retire.
"Now many find they don't have enough money to enjoy a golden
retirement and wonder when they can finally rest."
While employers and workers are gearing up for the end of retirement,
society too will have to adjust to this new and developing situation.
Building up a silver industry that caters to the needs of older
consumers, or creating longer term insurance and better financial
planning programmes are just some of the areas where adjustments will
be required.
And just as bosses and workers have started to grapple with the
demands and challenges, the rest of society needs to begin thinking
about that process sooner rather than later.