Looking to 2022: Enhancing retirement financial adequacy for our seniors

 | By Associate Professor Tan Ern Ser |

During my younger days, I used to hear seniors saying that once their children had “started working”, they would be able to ease up on their responsibilities as they could then depend on their children’s financial support and enjoy their post-retirement years in relative comfort and security.

However, in adulthood and being a part of the sandwiched generation, I realised that, unless seniors have sufficient savings and bought health insurance, they would be putting a heavy financial pressure on their adult children, even middle-class ones, without necessarily having their basic needs fully met.

Such dependency may also lead to elderly abuse, family tensions and conflict between siblings.

It therefore matters to seniors - and their adult children, if any - that they have financial adequacy in their silver years. As a nation and developed economy, the Singapore government would similarly desire that elderly Singaporeans can maintain a decent quality of life and experience a strong sense of security.

The government is cognizant of investing more resources to supporting the elderly as Singapore continues in the direction of a rapidly ageing society. This commitment to the welfare of seniors is reflected in the various measures introduced in successive annual budgets.

Recent government measures

Budget 2020, for instance, provided a support package to help seniors stay employed. It also offered lower- to middle-income Singaporeans, which includes seniors, a matched Central Provident Fund (CPF) Retirement Savings Scheme up to an annual cap of S$600, or S$3,000 over five years.

There was, moreover, an enhanced Silver Support Scheme for the bottom 20 per cent of seniors aged 65 or older amounting to S$900 per quarter for each eligible senior. These two measures, together with the Lease Buyback Scheme, could raise the amount of CPF Life pay-outs to more than a $1,000 for seniors who have not met the Basic Retirement Sum.

To address healthcare needs, the government increased healthcare subsidies by up to 80 per cent, in addition to financial support for healthcare insurance and long-term care; as well as the universal, as opposed to means-tested, provision associated with the Community Health Assist Scheme (CHAS), Pioneer Generation Package, and Merdeka Generation Package.

Similarly, Budget 2021, while continuing to address the negative consequences of the pandemic on the economy and job security, had allocated more funds for supporting the employment or re-employment of older workers. 

Are these measures enough?

I have often been asked to comment whether, taken as a whole, the various forms of support rendered to seniors offer enough help to elderly Singaporeans. My quick answer would be that since the financial outlays of the various schemes and measures introduced over the years are clearly substantial, running into the billions, one can only respond that they have been most helpful and beneficial, especially to low-income and economically inactive seniors. Most evidently, the government is serious about improving the retirement financial adequacy of seniors.

However, I often wonder if the support provided, while significant, is equal to the task of addressing the issue of retirement financial adequacy. To answer this question, we need to know what adequacy means in the first place.

Is it to meet some defined “basic needs”? And beyond this, is it to help seniors eventually become self-reliant, since this is an important quality in our national ethos? What if despite the social safety nets provided by the state, actual healthcare and caregiving expenditures and opportunity costs continue to impose a heavy burden on the sandwiched generation? What then does this say about the adequacy of government support for seniors?

Has the government ever attempted to define explicitly what seniors would need to have access to a decent quality of life with some minimum level of financial security?

A 2019 report by academic Dr Ng Kok Hoe and team members inferred that the CPF Basic Retirement Sum, which pays a monthly annuity of about S$800, is “supposed to provide a basic level of income for retirees”. The authors also suggested that, by their estimate, a single-elderly household needs S$1379 monthly, which means the government’s “kuih lapis” approach, as opposed to defining a poverty line, involving several layers of assistance to seniors, would fall “significantly short of what is needed for a basic standard of living”.

Outcomes, not just inputs

Whether or not we agree with the above report and its definition of basic needs, it flags to us the importance of being clear about the kind of outcomes we hope to achieve with government support for seniors. Unless we have clear, specific adequacy goals in mind, we would not be able to determine the extent to which we, as a nation, have done enough to lighten the load for seniors and their family members or improved their lives, or how far we have progressed to this end.

The issue of retirement financial adequacy would then be an endlessly contested one, with the government pointing to the multiple layers of assistance for seniors and the magnitude of its support in dollar terms, while political and social activists harp on the presence of seniors selling packs of tissue paper at hawker centres or collecting discarded cardboard boxes in exchange for cash.

Perhaps, the debate can be resolved by recognising that there are really two definitions of adequacy: one pertaining to the very poor, which long-term COMCARE assistance is capable of addressing; and the other for the seniors identified by Dr Ng and others’ 2019 report who need more help to achieve retirement financial adequacy.   

Where do we go from here?

The government has been proactive in trying to meet the retirement needs of seniors. Its policy towards seniors is comprehensive, covering housing, employment, health insurance, workfare income supplement, and retirement fund.

However, comprehensiveness does not equate to adequacy. It is therefore important that the government define what constitutes a decent quality of life and minimum level of retirement adequacy for seniors. Setting probably long-term, specific adequacy goals does not necessarily entail a fundamental shift in the government’s approach towards providing seniors a reliable social safety net, but it does allow for tracking the progress made over time and perhaps even motivate the government to take bolder, more left-of-centre measures in good years to fast-track the advancement towards those goals.

Parting shots

I remain convinced that the government is doing much for seniors. I also recognise that whether it could do enough for seniors would depend on the resources we have.

Still, it makes sense to know what our specific adequacy goals for meeting seniors’ needs are, and what more could be done, whenever possible, to move nearer to our desired outcomes for our seniors, and its ramifications for dignity in later life, family harmony, or even fertility rates in Singapore.


About the author

Tan Ern Ser.JPG

NUS Sociology Associate Professor Tan Ern Ser is the Academic Convenor for Singapore Studies at NUS Arts and Social Sciences as well as the Deputy Chair of the NUS General Education Committee. He is also Academic Adviser of the Social Lab at the Institute of Policy Studies at NUS. Assoc Prof Tan’s research interests include class and stratification; citizenship and national identity; and ethnic relations. A Justice of the Peace, Assoc Prof Tan also serves as a research consultant to the Housing & Development Board, and chairs its Research Advisory Panel.



Looking to 2022 is a series of commentaries on what readers can expect in the new year. This is the fourth instalment of the series.

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