A research team from the Lee Kuan Yew School of Public Policy (LKYPP), National University of Singapore (NUS) led by Assistant Professor Ng Kok Hoe has revealed their findings last Wednesday that a typical Singaporean above 65 years old would require roughly $1,379 monthly to meet his or her basic needs.
The figures for different types of households are as follows: $1,379 monthly for single elderly households, $2,351 monthly for elderly couples, and $1,721 monthly for single persons between 55 to 64 years old.
List of items that were acknowledged to be basic necessities and services were produced by participants of the study with a common consensus. If the item or service was agreed upon to be a basic need and could be backed up by a valid reason, it would then be added to the list. It was also in mutual agreement that basic needs included more than just sustenance, hence personal care items such as leisure and cultural activities were included in these lists to eventually churn out the stated household budgets.
To quote Dr Ng, he said that the study “reveals that ordinary members of society can come to a consensus about a basic standard of living in light of norms and experiences in contemporary Singapore. Such income standards can help by translating societal values and real experiences into unambiguous and substantive benchmarks that policy can aim for.”
DO ACTUAL EXPENDITURE MATCH BUDGET CALCULATED?
However, I think we all know that budget never really quite matches actual expenditure most of the time. The discrepancy in the two figures was found out to be due to the fact that healthcare as well as recreation and culture components stood a larger percentage of the retired households’ budgets than proposed in the study, according to the statistics of actual expenditure from Singapore’s Household Expenditure Survey in 2012/13. This was because the costs incurred to treat chronic conditions and major illnesses were not taken into account for.
Comparing to the updated calculations of projected payout for Central Provident Fund (CPF) Life (illustrated below), it is safe to say that the living budget per month estimated by the LKYPP of $1,379 lies in the same range of payout calculated for the full retirement sum.
So for those who are still unsure of why contributing part of your income to CPF is necessary, it plays a crucial part to ensure you retire comfortably in Singapore without having to worry about depending on your family members. If you are worried that you may face an unfortunate healthcare problem when you get older and be subjected to high medical costs, why not top up your Retirement Account (RA) to the enhanced Retirement Sum and receive a higher CPF life payout? I mean, even if you do not eventually need it for medical purposes (touch wood), you can afford to live a lavish lifestyle, so why not?