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The Straits Times
www.straitstimes.com
Published on Apr 20, 2013
Many risk retiring income-poor: Report
Most people's wealth lies in assets that generate little money: Manulife

By Magdalen Ng

MANY Singaporeans risk retiring asset-rich but income-poor, according to a new report by Manulife Asset Management.

Singaporeans have traditionally had a high savings rate, and their combined total wealth is a hefty 2.3 times Singapore's national annual economic output or gross domestic product (GDP).

However, the nest eggs they have tucked away are still insufficient to ensure retirement income security, Manulife says.

Singaporeans may be generally wealthy, with per capita household wealth of about US$205,000 (S$250,000), it adds.

However, about 60 per cent of this wealth is tied up in relatively illiquid assets such as property, or parked in bank deposits which generate little or no income.

Also, Singapore has the lowest level of government social spending among the economies studied by the report. This shifts responsibility for retirement income secu-rity more to individual households.

The report, part of Manulife's Aging Asia series, examined five Asian economies - Hong Kong, Japan, Singapore, South Korea and Taiwan. Mr Michael Dommermuth, president of international asset management at Manulife Asset Management, said one of the reasons Singaporean retirees have been able to retire in relative comfort is strong familial support.

Out of the five economies, elderly Singaporeans received the highest levels of support from their families. Only 8 per cent of elderly Singaporeans live alone, with almost 80 per cent of elderly households receiving financial support from their children.

However, Manulife Asset Management Singapore senior managing director Jill Smith noted that this form of support is unsustainable, given the declining household size, rising elderly dependency ratios and declining fertility.

"It is increasingly important for individuals to allocate their household wealth in ways that generate a recurring income stream," she added.

Most Singaporeans depend on their CPF savings, which Mr Dommermuth said is a very well developed pension scheme.

However, he questioned the actual contribution of pension payments to retirement income security, given that CPF savings can also be used to purchase property and pay for medical expenses.

Additionally, most of the CPF savings are paid out when the CPF member is 55, and many Singaporeans tend to put the bulk of the money in cash deposits.

Mr Dommermuth believed that a lot more awareness and education needed to be done for the retail investor in Singapore and in Asia. "Many of them are very averse to volatility, and they have been through some volatile times in the past," he added.

songyuan@sph.com.sg

No doubt Manulife will have all the answers to this "problem"... Hehhehheh...

No worry. There is a parent maintenance act to protect the govt reserve?

And CPF's MS (those born later than ?) has now become "compulsory Annuity scheme" It is really a brilliant Papies move that private Insurance companies can't compete because it captures a very large pool of people "continously". And current rule is anyone with MS can join from DDA till 1 day before 80 years.
Please confirm accuracy from CPF's website.
So is Papies protecting the people or more for protecting the "Reserve" for themselves?
If you observe carefully, almost all Papies look very much like over-fed Persian cat.
This remind me of Garfield. Over-fed.

i think there is a saying in Vietnam or China that goes like this:
"The Gov. is rich, the People will be poor. The People is rich, the Gov. will be poor."
So what do you think? Who will be rich; the Gov. or the people? In Singapore, of course you know who is rich, lah!

(21-04-2013, 10:27 AM)Temperament Wrote: [ -> ]i think there is a saying in Vietnam or China that goes like this:
"The Gov. is rich, the People will be poor. The People is rich, the Gov. will be poor."
So what do you think? Who will be rich; the Gov. or the people? In Singapore, of course you know who is rich, lah!

It sound logical if it is a zero-sum game between Gov and people.

In actual fact, it is not a zero-sum game in Singapore context. Gov getting richer, and the people are also richer.

can Singapore have full democracy? That's a big question. Otherwise, government will keep the larger portion of the wealth created and manage it and the people will have the remaining and being managed.

(21-04-2013, 10:44 AM)CityFarmer Wrote: [ -> ]

(21-04-2013, 10:27 AM)Temperament Wrote: [ -> ]i think there is a saying in Vietnam or China that goes like this:
"The Gov. is rich, the People will be poor. The People is rich, the Gov. will be poor."
So what do you think? Who will be rich; the Gov. or the people? In Singapore, of course you know who is rich, lah!

It sound logical if it is a zero-sum game between Gov and people.

In actual fact, it is not a zero-sum game in Singapore context. Gov getting richer, and the people are also richer.

Ha! Ha!
Very true in common sense only.

In Singapore you still see many, many poor people. Singaporeans can "see" their National Reserve grows almost every year. You can hardly see Papies has a Budget Deficit year. Even a layman in the street will know it means the Papies take & take, more & more from the people. And the Budget Surplus is into Billions year after year. And yet we have one of the lowest "Social Net Spending" in the world. And we are not allowed to voice our grivances on the street except at "Hong Lim" park.
Even at "Hong Lim" park you need a Police Permit.
Workers strike? Sorry hoh, you need a "Papies permit" too.

In Singapore, you still see many poor (& usually old) Local people who goes around waiting on tables, washing toilets, digging into trash bin for soft-drink cans, etc..... . What is the use of Papies's billion $ Budget Surplus year after year if all these poor people can see only but can not touch.

And may i add, i remember i read somewhere, many "ANG MOHS" from the first World countries are surprised to see all these Locals still goes around waiting on tables, washing toilets, digging into trash bin for soft-drink cans, etc..... .. Maybe they are even a little shocked why Singapore GOV. is so rich, comparable to 1st World countries, yet some of the Locals still live like in 3rd World countries.
WHY???

Swiss standard for them .

When our retirees invested in assets in their younger days without due dilligence for the returns and just following the herd, there is a risk of retiring.

In addition, the risk of your own children cheating you of your retirement funds (an article in Sunday Times of 2 daughters vs mother for the HDB flat).

Safer to have a portion of your wealth in annuity, at least you know that your money will not outlive you. Every month or every year, got money to take.