So recently, Tharman Shanmugaratnam said that Singapore’s retirement age will have to go someday. And of course, many young people responded with an impassioned “So you want us to work until we die?”
What these people don’t understand is that the retirement age has nothing to do with how long you are forced to work to make ends meet. In countries where citizens get pensions, retirement signals that it’s time to kick back and bust out the piña coladas.
Singaporeans don’t receive pensions, hence whether the retirement age is 45 or 100, if you don’t save and invest for your own retirement you’re going to be slogging away in your twilight years whether you like it or not. And no, the retirement age has nothing to do with when you can receive your CPF payouts.
What the retirement age (62 at present) does do, is help you to keep your job when you are older. It’s illegal for companies to force you to retire (in other words, to fire you because of your age) before you turn 62. After you turn 62, you might qualify for re-employment until you’re 65 (to be changed to 67 next year).
Removing the retirement age would mean that companies would no longer be able to fire any workers based on their age. Here’s why you should care, even if it’s still decades before the rule will apply to you.
It could make employers less ageist
Singapore employers are quite ageist, which is why it is so difficult for retrenched PMETs over 40 to find jobs that match their pay. And yes, you heard that right, 40 is considered over the hill in many industries.
Many employers here prefer to hire young workers because they’re cheaper, better and faster. If you work in a company where there are senior employees over the age of 50, you’ll realise that little attention is paid to their training and development.
These older workers have either climbed the career ladder to the point where they’re the ones calling the shots, and largely rely on their subordinates to do the nitty gritties (I once knew an older lawyer who had no idea how to format documents and typed with two fingers, so guess who ended up doing most of his work), or they are in menial or support positions and it is assumed they no longer need to upgrade themselves. When retrenchment happens, these folks have no idea what hit them.
Another problem with the retirement age is that in years leading up to that fateful day when you turn 62, many older workers find they get treated as though they’re already on the way out. It’s quite common for employers to withhold annual increments once you hit your 50s, because they know you’ll be gone in a couple of years and it’s going to be hard for you to get a job elsewhere.
Removing the retirement age could skew the average age of the workforce upwards, especially in PMET positions. Companies would be forced to take a longer term view of their employees’ careers. After all, if you know your 50-year-old employee could potentially still be working there 30 years from now, you’d probably care more about sending him for training and treating him fairly.
If you can’t save enough to retire, it could help you stay employed
I’ve said it once and I’ll say it again—when you live in a country with no social safety nets and no pensions, it’s never too early to start planning for retirement.
It’s clear that the retirement age is not a good thing if you actually need to continue working beyond 62 to survive. While there is still the option of re-employment till 65 (soon to be amended to 67), workers on a re-employment contract often find their previous salaries get reduced, and some live in fear that their contracts will not be renewed.
Removing the retirement age could actually make it easier to hold on to your job, and thus give you a better chance of earning a decent income in your later years.
Remember that Singapore might be expensive now, but there’s no telling how much more expensive it will be in future. 4 in 10 Singaporeans have not even started saving for retirement, including 27% of those aged 55 and above, and 46% forsee having to work beyond retirement age, according to a survey conducted earlier this year.
Considering these dismal figures, removing the retirement age would improve job security for a lot of people.
Still, retirement age or no retirement age, you’re setting yourself up for a life of stress and hardship if you spend all your money in your youth. So don’t neglect the value of saving and investing, as well as buying insurance that can stop you from going bust should anything bad happen. That way, your life will not depend on your being able to find a decent job when you’re in your 60s.
Do you think the retirement age should be removed? Tell us why or why not in the comments!