When Retirement (Old) Age Not A blessing -Cont'd

In my last posting, I've highlighted the plight of retirees in Singapore whereby as a results of longer life span and increase cost of living many are living on insufficient savings. To be fair, the trend is not confined just to Singapore alone as this is a global phenomenon and many other countries are facing the same problem too. I mentioned Japan and Germany as the other countries in the same situation.

Although increasing the retirement age as what is being done by Singapore will help reduce the problem somewhat, the proper solution to tackle the problem in my opinion lies in educating the populace on the importance of retirement planning and wealth creation in our everyday life. As a start it would be a step in the right direction if the subject was taught in schools. With greater awareness on the importance of retirement planning in our life, each of us will then be able to plan and and better manage our own life during retirement. Its about time that each of us take our own responsibility in managing our own retirement life and not depend on the government.

When Retirement( Old) Age Not A Blessing

This is what I picked up from a local paper The Star today as reported by its reporter Mr. Seah Chiang Nee, based on the island republic and rich state, Singapore.

The report told that that wealthy Singapore has unfolded a strategy to deal with the plight of a growing number of financially strapped retirees who live for 20 years with insufficient savings. As a results of better lifestyles the people in the city state are living longer today - 82 years compared with 66 years in 1970. But according to the report not everyone finds it a blessing. Singapore, according to the reporter has one of the fastest growing ageing population in Asia. Further, with the rising cost of living, especially in the health care, senior citizens who have little education, money or family support are becoming the country's rising disenchanted. The retirement age is 62. The report also mentioned that at last count there were 400,000 Singaporeans aged 60 or older, but only 73,000 or 18% of them were working.

The main theme of the strategy according to the reporter is to get Singaporean to carry on working beyond 62 years, the retirement age in the city state and increase age old savings so that it can last longer. Now payout has been increased by 1 % to 3.5% to the Central Provident Funds(401 (k) scheme equivalent) deposit of up to S$60,000 with the rest remaining at 2.5%.

My main point of highlighting the report is to increase the awareness of the correlation that exists between retirement age and longer life span. This report is also consistent with my earlier findings on the impact of longer life span to retirement age and their consequences. As mentioned in my previous posting on " Life Expectancy and Retirement Age", there are tendencies for the governments to adjust the retirement age upward to cater for the longer living population. This will put the pressure off of the pension burden on the governments. From my research, Singapore is not alone as most developed countries of the world are facing similar problems. Japan and Germany are another examples.

Retirement Issues And Solutions

Retirement is the point where a person stops employment completely. To support living during retirement, a retiree needs to accumulate enough assets. This could comprise of cash, savings or other class of assets. Not enough cash inflow during retirement is the single most important challenge that retirees face today.

The rule of thumb is that you'll need 70% to 80% of your pre-retirement income to maintain the standard of living you had when you were working. But many are not even achieving this.

And even though you might satisfy the rule, increase in medical expenses due to old age and that occasional spending splurges that you're likely to take from time to time, like say going on that dream holiday vacation that you've been longing to go or even going to that fancy restaurant will all take out a big portion of your retirement savings - which can cause you a bit of problem later on.

Also, people are living longer now. Life expectancy at birth in the United States in 1900 was 47 years and at the end of the century, it was 77 years. And a 65-year-old American man today has a life expectancy of 16.4-years, about 50/50 chance of living to 85 and a 25% chance of still being around at 91. That means Americans will now live another 15-30 years after quitting work. Chances are many will outlive their money before they outlive their years.

The answer to the problems is for you to be prepared. Have a plan. Nobody in his right mind plans to fail. But when you fail to plan, that is precisely what you'll get. Plan for your retirement years to suit your retirement objectives. And start early. Starting early will give you a longer period to achieve your required retirement objectives - which may translate into a more affordable and less excruciating saving plan.

With proper planning you'll arrive at your destination with confidence and secure - not anxious.

The above article is an extract of my lens article on Retirement Issues And Solutions. For full version of the article please go to:http://www.squidoo.com/retirementresources/

And want to write your own lens? Then follow this link: http://www.squidoo.com/lensmaster/referral/Invroz

Life Expectancy and Retirement Age

While I was researching contents for my retirement website Http://www.retirementresourcessite.com (still under construction), I was bugged by the following question: Is there a correlation between life expectancy and retirement age? Or put it another way, is life expectancy for population of a given country being taken into consideration by the power that be to formulate a retirement age for that country. After all shouldn't retirement age be higher for countries with higher life expectancy population than countries with much lower life expectancy. It would make sense for countries with high life expectancy to also have higher retirement age, as this would tackle rapid population ageing and spiraling pension costs associated with worldwide trend of people living longer.

Retirement age as I found out varies from country to country but not much. For United States the official retirement age is 65.0 However, workers may opt for early retirement at age 62.0 and is eligible for withdrawal of the social security benefits. At retirement age of 65.0 the life expectancy of American male is 16.4 years and 19.4 years for female. For Germany the retirement age is 65.0 compared with life expectancy at 65.0 of 16.0 years for male and 19.6 for female. By the way plans are underway in Germany to raise the retirement age further to 67.0 years. In France, the official retirement age is 60.0 years with life expectancy at age 65.0 of 16.9 years for male and 21.3 for female. In Japan the retirement age is also 65.0 as compare to life expectancy at age 65.0 of 17.8 years for male and 22.7 female. For Singapore the retirement age is 62.0 years, while life expectancy at age 65.0 for male is 16.0, while female is 19.2.

A couple of countries have revised their retirement age upwards. - India from 58 years to 60.0 years. Compare this with life expectancy at birth of 62.2 years. And Malaysia from 55.0 years to 56.0 years with life expectancy at birth of 72.8 years

From the statistics gathered above the highest gap between male life expectancy and retirement age is France with 21.9 years followed by Singapore with 19.0 years. Japan is next (17.8 years), Malaysia (16.8 years), The USA (16.4 years), Germany (16.0 years) and India (2.1 years). The high gap posted by France, Singapore and Malaysia is due to their lower retirement age, while for India and also Malaysia positive adjustment to the gap is in order due to the use of life expectancy at birth instead of life expectancy at age 65.0 that are used for other countries.

Ok… So what's the verdict?

With the risk of being accused as too simplistic, I think there is some correlation between life expectancy and retirement age. And there are tendencies for the governments to adjust the retirement age upward to cater for the longer living population. This will put the pressure off of the pension burden on the government. Besides, nowadays the senior population is comparatively young at age 70.0 and many can still contribute to the country. Also being gainfully employed for a few more years would increase their retirement funds as well as defer their withdrawal for a few more years - all to the advantage of the retirees.

You can read my Squidoo Lens article on RETIREMENT ISSUES AND SOLUTIONS at: HTTP://www.squidoo.com/retirementresources/

My First Post

Aspire To Inspire Too! That is what this blog is all about. And set to accomplish. Inspirational articles, ideas, insights about Retirement. For retirees, would be retirees and for those who choose the path to a happy, fulfilled retirement - whatever their age is.