LONGEVITY BONUS OR LONGEVITY CRISIS?

From Straits Times 19 April

The International Monetary Fund )IMF) has just released its Global Financial Stability report 2012. The report carries a warning of the rising healthcare costs of ageing. An underestimation of the average life span by a mere three years can translate into additional trillions of dollars in pension and healthcare costs for the global economy.

Graphics from Straits Times April 7.

How Singapore is preparing for ageing

The top three countries with the fastest growing ageing populations in the world are Japan, Germany and Singapore. In Singapore, the number of residents aged 65 and above increased from 7.2 per cent in 2000 to 9.3 per cent last year. By 2030, this will rise to 19 per cent.

Malaysia may not be on the list of world's fastest ageing populations, but it certainly holds the record for having the world's biggest civil service - 1.4 million Malaysians work in the public sector. Just imagine how much this will cost the government (and the tax-payers) in pension payments when these civil servants retire.

For other issues related to the "longevity bonus", do listen to this roundtable discussion held at Standford University. It's 90 minutes long, but worth spending the time if you have the interest. Some of the issues raised include:

~ social / financial security
~ job opportunities
~ medicare / healthcare / care-giving
~ nursing / retirement homes
~ transportation
~ lifelong learning
~ women's role / dominance in ageing
~ discrimination
~ inter-generational divide
~ social media (the 65+ are the largest growing cohort on Facebook)

The solution lies primarily in education. We all want to enter our golden years physically fit, mentally sharp, and financially secure, don't we? This awareness should be instilled as early as possible, and as part of the school curriculum.

ASIA AT EPICENTRE OF AGEING CRISIS

"Asia is the epicentre of the ageing crisis." This was the comment made at a recently concluded conference on retirement planning held in Singapore. The numbers are alarming.

• By 2050, the world's over-65 population is expected to treble to one in six people.


• Asia's over-60 population will quadruple to 1.2b. That's the equivalent of China's population today.


• At present, four out of the world's 10 fastest ageing populations are in Asia: Japan, Singapore, South Korea and Hong Kong.


• In Singapore, the elderly will account for nearly 20% of the population in 2030. That's only two decades away!

A huge demographic crisis is brewing as birth rates and death rates keep falling. What this means is that an ever-shrinking pool of young people will have to shoulder the burden of looking after a rapidly expanding greying population.

Without any form of retirement planning or medical insurance coverage, the elderly will have to depend ultimately on the government to take care of them. The government already has its hands full grappling with the challenge of meeting pension obligations as the number of retiring workers multiple each year.

How is the government going to finance healthcare for the elderly? Increase taxes? Raise the retirement age? Introduce compulsory maintenance of elderly parents?

On our part, we should keep working as long as possible, especially if we don't have sufficient retirement savings and no health insurance. Those of us who think we have enough funds set aside may need to do some recalculation. With the escalating cost of living expenses, many of us simply can't afford to retire.

Our adult children already have their hands full taking care of their young family. The least we can do to help them is to be financially independent ourselves, and keep sickness at bay.