Singapore’s Ageing Population: The Financial Implications Of Our Country Growing Old
What happens when older people in Singapore starts outnumbering younger folks?
I came across an article (link here: https://dollarsandsense.sg/singapores-ageing-population-financial-implications-country-growing-old/) written in collaboration by Dollarsandsense.sg and Ministry of Finance (MOF), Singapore and thought the findings were really illuminating.
It made me think hard of the implications for myself and my family, and also my children and their generation. If we think life as it is now is not easy, imagine the financial burgen our their shoulders when our kids grow up.
I have extracted some portions of the article below, and added my own thoughts as well.
Definition Of An Ageing Population?
An ageing population simply means the country’s population as a whole is getting older, with more elderly members and fewer younger people. In general, the natural replacement rate should be 2.1 babies per woman. However, Singapore’s fertility rate stands at 1.2, far from what is required to maintain a steady population level.
Less Working Adults To Support More Older People
According to Population.sg, Singapore has about 4.7 citizens of working age (20 – 64) in 2016 for every 1 older adult (65 and above). This is a significant decline from 10 years ago, where we had 6.9 citizens per older adult. By 2030, our country is expected to have only 2.3 citizens of working age per older adult.
Source: Population.sg
Think about this from our own perspectives. During our grandparents’ era, it was common for families to have five or more children. As a result, when they became older, they had multiple offspring whom they could rely on.
Today, households tend to be much smaller. Many families may have just one or two children. This means that when the parents become older, the responsibility of caring for them would fall on the shoulders of just the one or two children.
Similarly, as our population start to grey (as we all will one day), younger citizens will have to shoulder more responsibility to care for a larger group of older citizens, compared to earlier generations.
Increase In Healthcare Expenses
As we become older, our healthcare expenses are expected to increase. It could be the costs of medical screening, treatments, hospitalisation, or medicine.
Coupled with having fewer working adults in the family to support each older member, the cost burden on each adult becomes even higher. Not only does the family have to cope with higher overall healthcare expenses, but there are fewer working adults to share the burden.
This challenge is similar to what we now face in Singapore. The Government’s budget on healthcare has increased quickly, doubling from $4 billion in 2010 to about $10 billion in 2017, and this trend is likely to continue as our population continues to age, coupled with increasing life expectancy.
What Can We Do?
It then went on to list 3 things we could do: (1) Stay Healthy to have better quality of life and minimise healthcare expenses; (2) Help Older People stay gainfully employed if they are willing; and (3) Lifelong Learning.
Whilst these are great suggestions, they are by no means any solutions.
What I would suggest is thinking of your lifestyle goals in terms of assets and the income it would generate for you. For example, if I need to support my parents lifestyle with $1000 a month, instead of it coming out of my salary or savings, how could I buy an asset that would generate $1000 a month in passive income, whilst I continue to own the asset which retains it’s value.
This is a key mindset shift that would allow us to be better stewards of the resources we have, instead of the monies being spent month after month, like sand in an hour glass, where we are eventually left with nothing.
This image below shows the difference in mindset between one with an average mindset, and one with a growth or wealth mindset.
A person with an average mindset is often seen cutting coupons, searching online for the best discounts and deals in order to save tens or hundreds of dollars. Whilst this is by no means wrong, is this the best use of one’s time or talents?
I choose to invest in the best investment of all, myself. To gain clarity in what I truly desire in life, not chase the material things mindlessly, and get myself educated through people who are already where I want to be, learning to invest in ways that are safe and secure, in order to truly be rich in the things I desire in life.
Reflection questions:
Which mindset do I tend to operate from?
Who are my dependents and how much support would they need?
Do i have absolute clarity on my life mission and what I want to be rich in?
What is one thing I can do to get myself educated in having a wealth mindset?
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