Retirement?

Why the big fuss about to plan for retirement?

I think that the government has a forecast on what would happen if no one plan for their retirement. How long the timeline, I do not know. It should be when majority of local middle income Singaporeans, who will be retiring at around 65.

Most probably, everyone in that income group may have to work until they are medically unfit to work in order to survive.

This is not to encourage the people not to spend at all, but to prepare for their retirement so that the government would not have to plan undesirable actions which may lead to loss of foreign investments and social unrest.

This is an assumption if no one saves enough money. However, Singaporeans are one of the top savers in the world, for now. There may be a change in spending characteristics. The baby boomers who are now near or at their retirement age are mostly savers perhaps due to their hardship when they are involved in rapid change. After that generation, there may be a progression in the increase in spending of the population. Which in economic terms, is the marginal propensity to spend.

Hopefully in the future, Singaporeans will not go on debt like what is happening in the US. However, the easy access to credit these days is just a spark to a forest fire which may happen. A pessimistic view in my opinion is that materialism of people is growing at a positive curve. This will further widen the rich poor inequality whereby in the future, there would not be the poor, middle and the rich. The spendthrift middle income would shift towards the poor (material rich but cash/asset poor & perhaps in debt) and the saver middle income who invest for the long term will most probably be the lowest tier of the rich.

For the saver middle income class, they have a chance to be rich and retire comfortably because of the compounding effect when they invest. If they teach their future generations the virtue of frugality, they would most probably climb the ranks of the rich.

How rich you want to be will depend on your risk appetite. (Not to encourage TOTO & 4D - That is gambling.)

For the spendthrifts who spend over their means, they exist today in Singapore.

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Please note that $1,000,000 in 30 yrs time is only worth $308,318.67 today assuming inflation of 4%.

Assuming the government maintains it's efficiency for the next 100 yrs, generally I think all would be fine. But this is not to encourage dependence on the government.

Progression
Stability is the key for smooth progression in Singapore. Volatility is a market's best friend but not for a country's growth. That's why countries are starting to take Singapore as a role model in economic terms.

Disclaimer: This is just my personal opinion and there are no statistics that support this idealistic view. I would not take any responsibility for any damage caused by this article. Thank you.