Singaporeans "prefer to retire later" than save more

business-times.asia1.com.sg :

Uniquely in the world, Singaporeans would prefer to work for more years than to be made to save more for their retirement, said Dr Harper, director of Oxford University's Institute of Ageing. She was in town to present the results of a HSBC survey titled the Future of Retirement, which covered 22,000 individuals and 6,000 private sector employers in 21 countries, including 1,000 individuals and 300 companies in Singapore.

41% of Singaporeans surveyed said the one thing the government should do to deal with the rising cost of supporting an ageing population is to raise the retirement age. In contrast, less than 25% of respondents around the world, and about 33% in Asia, supported raising the retirement age. In most other countries, the most popular policy was more compulsory saving.

Separately, a panel on financing retirement said Singaporeans must rethink their dependence on the CPF. Panellist Jason Sadler, president of the Life Insurance Association of Singapore, said 72% of funds deposited in low interest CPF accounts could be invested elsewhere, and that as of 2000, more than half of the assets of Singapore households lay in residential property. Most Singaporeans would remain 'asset rich but cash poor' at retirement, he concluded.

- Well, I'm not so sure whether it's more of a "prefer to retire later" or whether it's more of a "no bloody choice". My father now drives a taxi, after a supposed "early retirement" from teaching. Some retirement. There are those who work as HDB cleaners (i.e. the common areas in public housing estates). And there's a grouchy old auntie at the coffeeshop near my workplace, grumbling and mumbling to herself as she clears away the dishes at lunch-time. At least the elderly folks at the Macdonald's and such have the benefit of an air-con workplace. But I wonder, did all these people "prefer" to retire later rather than save more?

A (very) simplified calculation - for every $1.2 million dollars, you get just $1000 every month with each 1 percentage point of return. So if the prevailing FD interest rates are around 2-3% like what they are now, you get just $2000 to $3000 per month.

I'm not talking about an annuity here where you whittle away your principal down to zero, leaving nothing for yourself or your family at the end. I'm talking about being able to live off the interest from what you have, while keeping what you have.

And I haven't yet mentioned how inflation is expected to eat away at what you have (even if it's worth $1.2 million now), such that $2000-$3000 per month might be worth only 1/10 of that 30 years down the road. Perhaps less. Ask your own parents how much a bowl of fish soup, a bus ride to school/work and back, or a plate of chicken rice used to cost 30 years ago. 20 cents, 30 cents maybe, compared to what, $2, $3 nowadays? "Honey, your government shrunk your money!"

Many financial planners have been calculating that you need at least $2 million in order to retire. After doing my own sums, I'd tend to agree with them.

"Prefer to retire later", huh. I don't think so.

United Airlines to cut another 1000 jobs by year-end

business-times.asia1.com.sg :

UAL Corp's United Airlines, which emerged from bankruptcy on Feb 1, will cut another 1,000 salaried and management jobs by year-end to further lower its costs. The 11% reduction will help the world's second-largest airline pare administrative expenses by about US$100 million, chief executive officer Glenn Tilton said. It wants to trim total spending by US$400 million this year.

United, based in Elk Grove, Illinois, now has about 9,400 salaried and management jobs. The airline reduced annual labour costs by US$4 billion, including cutting more than 23,000 jobs, before its bankruptcy exit. Excluding a bankruptcy accounting benefit, the airline's first-quarter loss widened to US$306 million on fuel and labour spending.

Global energy crisis cooks to surface

peakoil.com -> rigzone.com :

The growing scarcity of oil and natural gas has provoked worldwide political conflict and a mad rush for renewable resources. Like a volcano before it erupts, the crisis has heated up for decades, out of sight of oil-heated homes and petrol-powered cars. But the signs of trouble are now evident, and not only at the pump, where $70-a-barrel prices eat into the pocketbook. War in Iraq, tensions over Iran's nuclear plans, the international standoff over genocide in Sudan, kidnappings and killings in Nigeria's oil fields - all give frenzied expression to the world's rocketing, insatiable thirst for oil. U.S. columnist Thomas Friedman regularly warns New York Times readers that America's appetite for fuel supports the very movements intent on its destruction.

At the upcoming G8 summit in St. Petersburg in July, energy issues are expected to dominate. Booming economic progress in places like China and India is a key factor, but the U.S. still sucks up one-quarter of the 80 million barrels of oil consumed every day by the world. The looming specter of "peak oil production" - the point at which oil production is expected to drop because reserves are too difficult to pump out - has combined with high prices and increasing political insecurity to boost the search for renewable energy sources.

Long-simmering warnings by environmentalists over global warming from carbon emissions were on their own not enough to provoke serious consideration of energy alternatives. But last year's Hurricane Katrina, which produced the world's first "climate refugees," went a long way to helping convince the general public of the need for change, said Lester Brown, head of the Earth Policy Institute environmental pressure group. "Two years ago, most persons wouldn't have known the price of a barrel of oil," Brown said in a telephone interview. "Now, there's insecurity both on the oil front and on the climate front, and it's beginning to affect people's thinking."

(2006-06-20 16:34:47 SGT) [Energy] Permalink

Inflation hits home for lower-income groups

msnbc.msn.com :

Americans are increasingly feeling the squeeze of higher prices, not only at the gas pump but in the cost of groceries, delivery charges, travel and numerous other items. Driven by soaring energy prices, inflation is creeping toward 4% for the second quarter and is on pace for the highest annual rate in 15 years. A government report showed that consumer prices have risen at an annual rate of 5.2% so far this year, up from a 3.4% in 2005, thanks to the relentless rise in energy prices. The steady increase has caused so much concern that Federal Reserve Chairman Ben Bernanke is threatening to extend the Fed's two-year rate-raising campaign, sending the stock market plunging this month.

Many are growing uncomfortable with each tick higher in rates, as balancing checkbooks gets more difficult. "The majority of households are feeling a little uneasy," said Diane Swonk, chief economist at Mesirow Financial, a Chicago-based financial services firm. "... they haven't gotten any pay increases to compensate for the higher gas prices, higher prices elsewhere ... people are feeling like their living standards aren't doing as well." Swonk says the biggest concern for consumers will continue to be oil prices, which ultimately affect the cost of driving to the store to rent DVDs, pizza deliveries and other non-necessities.

While wealthier households may be absorbing the price shocks painlessly, that's hardly the case at the other end of the wage spectrum, where millions of Americans don't need to check stock portfolios to feel the impact. Especially among lower-income workers, inflation is forcing more and more sacrifices, compromises and budget-juggling. Lower-paying jobs also are more vulnerable to price rises and perhaps less likely to keep pace.

(2006-06-20 16:25:59 SGT) [Biz] Permalink

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