Why Most Singaporeans Cannot Retire

How many of us can afford to lease that HDB flat if we are not allowed to use our CPF? These days, many of us are maxed out on monthly housing payments. When we finally pay up the lease, some 20-30 years later, we realise there is very little or nothing in our CPF account and we are close to retirement age. Now what?

You work as long as you can work and you will be healthier and happier for it. If you ask me to stop working all of a sudden, I think I’ll just shrivel up, face the wall and just that.
-Mr Lee Kuan Yew

Being old doesn't mean the creaking wheel of life doesn't have to be turned. In fact, an old car is costlier to maintain than a new one. I believe we can agree the same for the human body. If we are not prudent enough to take initiative to put aside additional funds for retirement, we'll find ourselves continue working out of necessity, not because we are want to be healthier and happier. That is, if we are lucky enough to physically able as well as stay employed.

If all else fail, the government has suggested two ways. One, sell the remaining lease of the HDB flat and move to a smaller one. Use the balance for retirement. Two, if we do not wish to move, we can continue living in the flat and engage the lease buyback scheme by surrendering your lease ownership and receive a  monthly payment from the HDB. The flat will be returned to the HDB upon our deaths.

In my opinion, the government has gone really, really wrong in this. Firstly, they made a mockery out of the CPF system by constantly tweaking guidelines, including crucial ones such as funds withdrawal age. By doing so, they had destroyed the integrity of the system. Over the years, the people have grown to distrust the CPF system entirely. That could be the reason behind the popular notion of, "Buy a flat. The more expensive the better, because the CPF is not our money anyway." I may be wrong. I don't do sociological surveys for SingStats. That is a question worth asking ourselves.

Secondly, this trend of pumping our entire CPF account into the HDB flat goes against the investment golden rule of not putting all eggs in a basket. The contrarian investors believe in putting all eggs in a basket - and watch it carefully. The problem is that, we have absolutely no means to watch the basket. Our HDB market is artificially inflated with controlled demands from the importing of foreigners. What happens after we are maxed out at 6.5 million? That is going to happen before the current batch of young owners can pay out their mortgages. We do not need to be economic geniuses to know that when there isn't demand, price drops. Now tell me can you move out of your house anytime you wish? That answers whether we can truly watch our investment basket.

Thirdly, allowing citizens to buy a HDB flat with our retirement funds has lured them into a false sense of reality that housing is affordable. It isn't. Not when we are spending our entire retirement account on it. When we do not need to spend anything out of pocket for a roof above our heads, what do we do with the cash on hand? Many of us splurge on renovation. Not true? Take a closer look around you. With a flawed retirement system in place, many new couples do not realise the money they emptied into luxury renovations are supposed to go into their private retirement account. We can debate that financial prudence is a personal issue, out of the government's hand. You can probably win the debate in the government's favour. The reality  is, everybody is losing as it is.

It comes to a point where the government say the country needs more young to support the old. With such retirement system in place, I cannot disagree with them. Many of us will struggle when we reach retirement age. When that happens, we become a draining source of the country's resources. The question that Singaporeans need to ask themselves is, by supporting the government's strategy of bringing more young to support the old, how is the country going to cope when these young become old themselves one day?  Shouldn't we be changing our old mindset and look into a system whereby the old can be self sustainable instead?


  1. Importing young people to support old Singaporean is a red herring. There is close to zero welfare for old people here. Old people here are self-supporting. Locked up CPF - close to $200,000. Lease back HDB - a few more $100,000. Actually the Singapore reserve is enough to support every old folk here.

  2. Hello, it's been some time since i commented.


    humans are commodities, just like COE for cars. old cars are a burden to the environment, don't they?

    why don't people get married? why don't married couples have children? it's all about confidence in their future and trust in the Singapore system.

  3. The CPF system in Singapore has become a Ponzi scheme under PAP constant tweaking.

  4. Bringing more young, from abroad? To support the old, in Singapore?
    How does it work?

    Whoever has came out with the Above-mentioned idea has to be a cracko.

    Anyway, it is only commonsense that high income folks do not have to depend on their CPF to retire and live comfortably. On the other hand, no matter how hard the low-income earners work, they can never afford to stop work unless they have filial offspring that can afford to support them. Otherwise, work till one drops and touch wood or thank their gods, they must not fall sick for long or worse, aflicted with terminal illness.

    Folks below their fifties that belong to the low income group are in very sad situation where they are placed between the devil and the deep blue sea. There is little that they can do unless the government
    comes in to help and we know it does, just the minimum with plenty of red tape(bureaucratic procedure) which many lowly educated and physically weak may not be able to go about them.

    The CPF as a retirement scheme has lost its' objective after much tweaks over the years and it is still subject to further changes without the members' consensus. In short, it cannot be fully rely on for retirement.


  5. Wrong. There is an exit option. Throw in your pink card. Collect all your dole and try Australia like you or somewhere else cheaper.

    1. Rest assured they'll patch this one up one day.

  6. My opinion is to live life to the fullest healthily, instead of living till dunno when we will kick the bucket when our resources run out.

    SG, claiming to be 1st world and do not look after the old and destitutes should have legalised euthanasia for them and those who prefer not to live too long in later age.

    I have written to CPF board to reduce my drawdown period from 20 to 10 years and gave them full authority to take me off the road to the scrapeyard once my CPF is exasted.

  7. This concept is difficult for many Singaporean to grasp. "No choice" is the most common response I received and I tend to agree. There are little to no alternatives for many of the lower to middle income families.

  8. Spot on. Great post.

  9. when u are young or still able.......build enough wealth to see u thru b4 u grow old n weak .but do not lose an arm,leg or life in doing so!

  10. Retirement was one of my considerations when I applied for my AUS PR visa after GE2011.

  11. The CPF system is a shame! It has lost it's credibility by its ever shifting of goal posts! Many believe that the idea is to prevent you from taking out your own money. Our hard-earned money has become govt money. It's not your money anymore! Most of them feel cheated! If you don't believe, just go and ask around how they feel and think our CPF.