Singapore — Researchers from the Lee Kuan Yew School of Public Policy (LKYPP) have released the results of a new study that finds S$1,379 a month is the income required to meet the basic needs of people 65 and older, and who are living alone.
The study results, which were presented on May 22 (Wednesday), also reveal that only about half of members of the mandated retirement savings scheme — the Central Provident Fund (CPF) — are actually able to obtain this monthly retirement payout. This is because a big portion of their savings goes towards buying a home — an approved reason for withdrawing funds at the relatively early age of 55.
Led by LKYPP Assistant Professor Ng Kok Hoe, the study aimed to determine Minimum Income Standards (MIS) for the elderly. To decide on these standards, more than 100 participants from a broad range of backgrounds came together in focus group discussions to talk about how everyday Singaporeans perceive basic needs.
Based on these discussons, the LKYPP team came up with a study tenet: “A basic standard of living in Singapore is about more than just housing, food, and clothing. It is about having opportunities to education, employment, and work-life balance, as well as access to healthcare. It enables a sense of belonging, respect, security, and independence. It also includes choices to participate in social activities and the freedom to engage in one’s cultural and religious practices.”
Only half of seniors reach the amount needed for basic needs
As to whether or not seniors have this prescribed amount for basic needs, the study finds that only around half of them have this sum.
According to the study, “People who manage to achieve the CPF Basic Retirement Sum of $88,000 are entitled to a monthly payout of around SGD$790, far short of the budget for a single elderly person. Moreover, only around half of CPF members are able to hit this sum, as large portions of their savings go towards purchasing homes.”
Elders in Singapore have traditionally relied on their families for financial support in their retirement years, particularly when living under the same roof. Due to declining birth rates in Singapore, however, there are now less numbers of young adults who can financially care for aging relatives.
Prof Ng and research team member Nanyang Technological University Associate Professor Teo You Yenn wrote in leading financial daily The Edge on May 23,
“In Singapore, many older people rely on contributions from their adult children. As an act of reciprocity and respect, support for elderly parents may be socially desirable.
“But in an ageing population, future elderly people will have fewer or no children, and it is unsustainable to depend on them as the main source of income.
“With longer life expectancies, it is reasonable to expect longer years of work. Yet current older workers receive low wages. Many work primarily out of need.”
Moreover, the study notes that “Standards of living have also changed such that many “sandwiched couples” are struggling to take care of both their own children and their parents.”
Statistics from Singapore’s Ministry of Manpower show that full-time male workers age 60 and older have a median income of $2,000, which is 1.5 times the budget of what a single senior needs. However, the median income for women is only 1.3 times the needed amount.
Furthermore, nearly two-thirds of senior-age workers have jobs in the three lowest-income types of occupations: cleaners, service staff, and plant and machine operators. This means that they have salaries ranging from 0.9 to 1.2 times of the budget for basic needs.
The study notes, “For these people, retiring is not an option; living with just the bare necessities might even prove difficult.”/ TISG