S’poreans’ retirement funds enough for only 13 years: DBS survey

Reduced PMET lifespan is the most worrying.
S'more with increasing wk stress lvl, nt sure if most can sustain till 55
Sad life of a typical singaporean

(22-10-2014, 09:57 PM)investor101 Wrote: I think a large majority of Singaporeans will not be able to retire. They are all in for a very nasty surprise.

1. They overspent on housing.

Property prices have increased much faster than salaries. When property prices rise by huge percentages, there is much much rejoicing. When property prices drop by 1%, the property market is gloomy. Are you for real?!
When salaries rise by 5%, gahmen and businesses are suddenly very worried by rising business costs.

Salaries go up no good. Property price go up good. Most people are simply going to expend their money in vain, overpaying for their properties with salaries that is not keeping up.

2. Cars here are overpriced.

Whatever your reasons are, paying $100k for an average car is not financially prudent. The car is simply not worth $100k whatever reasons you claim. And you have to pay that amount every 10 years, when your COE expires.

3. Reduced lifespan of a PMET

Working lifespans of professionals are decreasing at an alarming rate. Not surprising to find PMETs in their early 40s manning security posts or driving taxis. This of course, translates into massive income reduction.


In the past, many Singaporeans can retire by age 55-60, with enough savings and a comfortable retirement. Now, we need to pass legislation to up the retirement age to 67, so that companies can legally employ singaporeans to work as toilet cleaner, table cleaner and security guard when they are in their 60s. You work for long hours in your old age for a pittance, and your company still thinks your pittance is way too expensive for them.

And the funny part is, some people still are grateful for the reduction in the quality of their lives. Stockholm Syndrome at its best.

Hi CY09,

Thanks for your mini-STI idea. If done right, it may out-beat STI, the reverse is true as well.

Yuppies spending - I think it's OK to spend after he/her practices "Pay yourself first" to save for retirement. If people don't spend, then SG economy will not be sustainable or grow. LOL

With regard to the SG economy, this is what G said.

Slower, but quality economic growth over next 20 years

A SLOWER pace of growth can be expected in Singapore over the next 20 years, with the economy projected to expand at about 2 to 3 per cent annually after 2020.

But there is a silver lining in this slowdown, according to the Government's new report on population issues facing the country that was released yesterday.

The growth would be of a quality that will allow the economy to stay competitive to create high- value and good jobs for Singaporeans amid a rising Asia, said Second Minister for Trade and Industry S. Iswaran at a press conference. The projection will also help ensure the country strikes a balance between staying dynamic and avoiding over-straining the economy with searing growth.

"It is a challenging but realistic forecast of what we can achieve based on our aspirations and our domestic constraints," said Mr Iswaran, elaborating on the White Paper on a Sustainable Population for a Dynamic Singapore.

"If we want to support the aspirations, then we need a certain level of growth that will ensure vibrancy, a certain pep in the economy to create more opportunities, not just for Singaporeans in terms of jobs but also for our businesses... A slower growth rate compared to the historical rates does not mean the growth cannot be one of quality," he added.

This vitality is imperative as the profile of the future workforce is set to change dramatically.

As Singaporeans become more educated, the number in white- collar PMET jobs will swell from half the workforce to about two- thirds by 2030. This means 1.25 million Singaporeans will be professionals, managers, executives and technicians (PMET), against 850,000 today.

Such jobs, said Acting Manpower Minister Tan Chuan-Jin, "come when you have good companies being here". "So we need to remain competitive, productive and attractive enough for them to exist," he added.

But the projected economic growth rate will not come easy, as two factors have to change: The labour force will have to expand slower, while productivity needs to rise faster than in the past.

If productivity is to grow 2 to 3 per cent a year, and the labour force, 1 to 2 per cent at the same time, Singapore's gross domestic product (GDP) growth will be about 3 to 5 per cent. But to expect productivity to rise at around 3 per cent is a "stretch target", so overall economic growth is more likely to be between 3 and 4 per cent from now to 2020.

And from 2020 to 2030, productivity growth is likely to slow to about 1 to 2 per cent each year, because high productivity is a struggle for mature economies.

In addition, Singapore's greying population means the labour force will inch up even slower, at about 1 per cent a year over the later decade. Together, these will result in an annual GDP growth of 2 to 3 per cent.

Said Bank of America Merrill Lynch economist Chua Hak Bin: "Businesses and Singaporeans will have to accept that 2 to 3 per cent is the new growth norm. This represents a balance between achieving economic dynamism and social cohesion."

But economist Yeoh Lam Keong, vice-president of the Economic Society of Singapore, believes the Government could further cut labour force growth.

"I don't think the difference in additional jobs created is going to be that significant relative to the crowdedness and difficulties with a bigger foreigner population."

Association of Small and Medium Enterprises president Chan Chong Beng said the slower growth and tighter labour force will be "tough on businesses", but agreed that it was necessary for the long term. "If we don't take this approach we will end up like Japan, with a shrinking workforce and a lot of industries affected. Then it will be too late," he said.

- See more at: http://www.straitstimes.com/the-big-stor...9IuVq.dpuf

http://www.straitstimes.com/the-big-stor...years-20-0

(22-10-2014, 10:37 PM)CY09 Wrote: Hi Ray,

True and may not be true. Our STI has companies listed in SGX but have businesses activities related to the global economy. Thus their current CAGR is rarely restricted to SG but a proxy of the global economy. Best examples will be Kep Corp, Semb corp, Marine, St Engg, GLP, Comfort and Jardines who are in our constituents. Jardine Strategic has the Mandarin Oriental hotel portfolio and JLT who have worldwide exposure. If one has the expertise in stocks, I will recommend investing in a portfoilo of good STI constituents, but removing the bad eggs such as SIA, Olam, Noble, HPH Trust, wilmar etc. VB forum serves as a good source of information for picking good STI constituents. Secondly, do note the STI is an market-cap weighted, so there may be way to outperform it

http://www.fool.sg/2013/06/19/a-simple-w...he-market/

Lastly, as "there is always a seed before there is a rose", so too must one save when young to serve as the seed for a flower of $15k passive income to bloom. The problem for many Singaporeans is that they live a lifestyle where they do not prepare the seeds. I am referring particularly to the 20s and 30s age group who many fall into 1) spend money at Tiong Bahru/Clarke Quay and don't save much, 2) Saves a tidy sum of money monthly, wishes to invest but money still sits in POSB accounts or 3) the group who has finally overcome the inertia to save/invest but do it in the wrong avenue of endowment funds and REITS.

(22-10-2014, 03:45 PM)Contrarian Wrote: > Let's say "Mr Contrarian" at age 25 realizes he needs $3,000 monthly in today's term for retirement at age 65. Assuming inflation rate of 3.5% throughout this
> exercise, he will need $11,800 per month until he is 85.

A bowl of noodle at the hawker ctr costs $2.50 10 years ago. The same bowl of noodle in the same hawker ctr costs $3-$3.50 now.

1. The same noodle does not quadruple in cost.
2. The lifestyle of a retiree is different from a working adult in mid 30s

IF one does not go upmarket for everything, and sticks to the basics, then this projection will be very very sufficient :-)

You raise an important point. Many retirement planning like to use the inflation rate. that is fine. you need a yard stick.

But we didn't frame that our personal inflation can be rather different.

if the basket of goods that generate the CPI includes a home and a car, and you are not paying for them after 35 years old, is that applicable to you?

(23-10-2014, 09:33 AM)Drizzt Wrote:

(22-10-2014, 03:45 PM)Contrarian Wrote: > Let's say "Mr Contrarian" at age 25 realizes he needs $3,000 monthly in today's term for retirement at age 65. Assuming inflation rate of 3.5% throughout this
> exercise, he will need $11,800 per month until he is 85.

A bowl of noodle at the hawker ctr costs $2.50 10 years ago. The same bowl of noodle in the same hawker ctr costs $3-$3.50 now.

1. The same noodle does not quadruple in cost.
2. The lifestyle of a retiree is different from a working adult in mid 30s

IF one does not go upmarket for everything, and sticks to the basics, then this projection will be very very sufficient :-)

You raise an important point. Many retirement planning like to use the inflation rate. that is fine. you need a yard stick.

But we didn't frame that our personal inflation can be rather different.

if the basket of goods that generate the CPI includes a home and a car, and you are not paying for them after 35 years old, is that applicable to you?

IIRC, our F. Minster said Singapore inflation was very manageable or very low for ordinary households if you did not buy a car, etc... In another words (to me) you don't have to aspire to live like the FTs or the $Million Elites. So why & what we are striving for? Why need VB? Why Singapore needs to import FTs by the truck load? Why you can have so many things and i can not??? How about just wee bit of the things you have? What talking you???

(23-10-2014, 10:52 AM)Temperament Wrote:

(23-10-2014, 09:33 AM)Drizzt Wrote:

(22-10-2014, 03:45 PM)Contrarian Wrote: > Let's say "Mr Contrarian" at age 25 realizes he needs $3,000 monthly in today's term for retirement at age 65. Assuming inflation rate of 3.5% throughout this
> exercise, he will need $11,800 per month until he is 85.

A bowl of noodle at the hawker ctr costs $2.50 10 years ago. The same bowl of noodle in the same hawker ctr costs $3-$3.50 now.

1. The same noodle does not quadruple in cost.
2. The lifestyle of a retiree is different from a working adult in mid 30s

IF one does not go upmarket for everything, and sticks to the basics, then this projection will be very very sufficient :-)

You raise an important point. Many retirement planning like to use the inflation rate. that is fine. you need a yard stick.

But we didn't frame that our personal inflation can be rather different.

if the basket of goods that generate the CPI includes a home and a car, and you are not paying for them after 35 years old, is that applicable to you?

IIRC, our F. Minster said Singapore inflation was very manageable or very low for ordinary households if you did not buy a car, etc... In another words (to me) you don't have to aspire to live like the FTs or the $Million Elites. So why & what we are striving for? Why need VB? Why Singapore needs to import FTs by the truck load? Why you can have so many things and i can not??? How about just wee bit of the things you have? What talking you???

It may be also time for supernormal returns not to negate the concept of money, but as a complement to it. In other words, genuine quality of life...

> If the basket of goods that generate the CPI includes a home and a car, and you are not paying for them after 35 years old,
> is that applicable to you?

At retirement age, I dont need I will need to continue servicing a home and a car. My current OPC was paid for by an investment.

> Our F. Minster said Singapore inflation was very manageable or very low for ordinary households if you did not buy a car, etc...
> In another words (to me) you don't have to aspire to live like the FTs or the $Million Elites. So why & what we are striving for?
> Why need VB? Why Singapore needs to import FTs by the truck load? Why you can have so many things and i can not???
> How about just wee bit of the things you have? What talking you???

I agree that the import of FTs by the truckloads and indiscriminately is overdone. Remember it is easier to win a new citizen than to win over an existing Singaporeans who is born and grew up here.

And yes the flood of FTs made housing, cars and MRT to buses so damn crowded. The most capable team did not work the ground to realise it. They are the elites who write papers upon papers, work in silo teams and did not understand the ground.

Last few years they are more politically savvy. However this "most capable team" as LKY said - are the most capable fire-fighters.
The most capable teams are the 1965+ ministers. No need go harvard but got smart brains...

{I agree that the import of FTs by the truckloads and indiscriminately is overdone. Remember it is easier to win a new citizen than to win over an existing Singaporeans who is born and grew up here.

And yes the flood of FTs made housing, cars and MRT to buses so damn crowded. The most capable team did not work the ground to realise it. They are the elites who write papers upon papers, work in silo teams and did not understand the ground.}

Last few years they are more politically savvy. However this "most capable team" as LKY said - are the most capable fire-fighters.
The most capable teams are the 1965+ ministers. No need go harvard but got smart brains...}

Unquote:-
i don't think it's a matter of the Elites did not know the ground or anything of this sort. With their highly intelligent calibre how can it be? i think the ground is not so stupid to believe the Elites are like them (the ground) so stupid 5 years after 5 years. Actually the ground is not stupid, Papys is still the best over-all. Because there are just no better opposition parties that can govern. Heck can't even form the 1/3 majority in parliament.
i think they (PAPY) knows Singaporeans can not do anything much.

NB:-
i have read all Gs of the world (except more tribalistic countries) the first thing to do to solve their country's any short-comings is to import Fts and then increase the population as much as possible until the local population protests. But i think no G did it like our G. Until Singaporeans had protested and only mildly at Hong Lim Park.

Let's see what is going to happens next?
But i don't think Singapore opposition parties are ready for anything. Bah!
They are not even ready to be the 1/3 majority in Parliament.
i hope the next generation the opposition parties will at least be ready for 1/3 majority. Or maybe , only maybe after LKY says bye bye to Singapore.

1. They thought that the electorate dont dare to vote against the ruling party. And just complain but vote kuai kuai. They woke up when they lost the GRC.

2. Now it will be seen, if now the Singaporeans vote based on the value of their homes. That's the reason why they will do much to protect the value of homes and get a soft landing.

3. The opposition - I can't find anyone close to calibre of SMU professor Eugene Tan. I don't think it is hard to find smart competent people to question the leadership. Maybe they want to field those who fall in line with the leaders. The very smart ones could pose a threat to the opposition's leadership... :-)

I dare venture many of our respected Vb members will make good opposition to the govt by challenging them in the fields of personal finance or securities regulation. We have a few good posts here such as how the SRS scheme has rooms for improvement

Just that instead of fighting them, our members mainly prefer to stick to our day jobs in the public/civil service or private sector and make investments in great companies. If ever, an opposition wishes to fight based on retirement planning etc against the ministers in MOM, the resources here is sufficient to mount a strong claim.

If i am not wrong, i think this coming GE even if PAPYS only get 49.9% or lesser of the people votes, the rest of the votes are spreaded among the oppositions + spoilt votes (protest votes), the Papy still forms the G.
So what's one GRC? Don't they after losing it, they imported Fts like cattles or worse a lot of sheeps too.
Only now they started the "Pioneer Generation Package". i am bit puzzled. Why? Too many old people able to vote or what?