Ready For Change : Don't Be Afraid Of Big O

THE Big O for many is old age. And we'd rather not think about it now.


















So instead we dream of laying our hands on our CPF savings and sailing away into the sunset.

But the twilight might be longer than we expect. And what if our retirement yacht runs out of fuel? Will we be stranded in the open sea?

That's why it helps to understand the issues raised in the Prime Minister's National Day Rally speech - ageing, working longer, and using CPF savings.

It all boils down to two simple points:

We have to work longer, because we are living longer.

Our savings will also work harder, earning more interest so they are less likely to run out.

Now look at how the sums work out:

Prime Minister Lee Hsien Loong outlined different scenarios if people worked longer (62, 63 or 65).

He calculated the money you would get under different CPF rates of returns (just one per cent's difference would get you $20,000 more).

He worked out the Workfare ($200 instead of $100).

He spoke of new re-employment laws, longer life spans and the need to buy annuities.

Yesterday, Manpower Minister Ng Eng Hen spent about 11/2 hours with reporters, explaining the changes.

One thing he said stuck in my mind: When the CPF scheme started in 1960, there were 23 young people supporting one old person. Now there are only nine young people to every old person.

In future (2020), there will be only five carrying the burden. It goes down to three in 2030.

This brought it together for me.

As a young person, I am not looking forward to carrying a third of the tax burden of an elderly stranger who has frittered away his savings.

As an older person, you should not want to have to depend so heavily on the young.

Dr Ng's message to future grey heads: 'Save for your own retirement. It is a safer option, a more rational one.'

So, depend on yourself.

This sounds sensible. Depending on yourself means spending your money wisely and planning ahead.

Never mind the trip to Korea. That can wait. Think first of making your savings last or buying products like annuities, or staying employed for as long as possible.

If you do this yourself, it's financial independence.

What if the Government does it for you? Is that like Big Daddy interfering with your life?

But someone has to do it. If no one does anything, we'll have a lot of old people with no money to support themselves.

Some people complain.

'Why can't the Government give us our money earlier?'

'How can they force us to buy annuities?'

'Why change policies?'

Dr Ng himself admitted: 'We never expected people to come and thank us.'

The policy changes are, in part, unpopular, difficult to understand; in other parts, still unformed.

But politics is the art of the possible.

In his speech, PM Lee quoted Du Fu, a Tang poet: 'A good rain knows its season... Silent and soft, it permeates everything.'

Changes are needed now and it must permeate everything, I feel.

Otherwise our money will dry up and we'll wind up with dust in our rice bow