What Does a Longer Life Expectancy Mean for Us?

Just 50 years ago, living up till you are 70 years old was probably unimaginable. But right now, we are doing exactly just that. Between 1960 and 2016, the global average life expectancy increased from 52.5 to 72 years of age.

Our little red dot has a life expectancy that far exceeds the global average, with its people living up to an average of 84.8 years old in 2017.

Advancements in healthcare systems provides better care for our bodies and health, making it possible for us to live longer, perhaps even overtaking the current predicted life expectancy ceiling of 125 years old.

But what does longer life expectancy mean for us? How can we better prepare ourselves for a longer life?

You’ll probably have to save even more than before.

Singapore currently has a retirement age of 62 and is set to increase till 65 by 2030. With a healthy lifestyle and regular exercise, there should be no problem for you to reach the life expectancy at least 84 years old.

Should you retire at the retirement age, this translates to you having to live for at least 22 years without receiving any income.

Are you confident that you would have enough savings by the time you retire to last you for the next 22 years or more?

There are two ways that can help you to save even more and better prepare yourself for a longer life – by making yourself employable and by saving early.

Make yourself relevant and employable

The first way to prepare yourself is to make yourself employable even after you have reached the retirement age. As long as you have the skills and are physically able to do your job, employers must offer re-employment to you up till you are at 67 years old, or 70 years old by 2030.

Unfortunately, many of our jobs are also being threatened by digitalisation and automation. In fact, robots are expected to wipe out 20 million jobs around the world by 2030. Many may not even be able to hold a job before they hit the retirement age. Being entrenched in a rapidly changing job market, how can you stay relevant in the workforce?

The key to this is adaptability.

To be adaptable in current times is to be lifelong learners. Constant re-learning and re-skilling can make sure that your knowledge remains relevant in the workforce, allowing you to move across industries. Adaptability will prove to be a highly valuable skill, especially in the 21st century.

Luckily for Singapore citizens, the government rolled out SkillsFuture to provide Singaporeans with opportunities to reach their fullest potential in life. For Singaporeans aged 25 and above, they will get $500 in SkillsFuture credit which can be used to pick up new skills such as baking, coding or even learning a new language. Those aged between 40 and 60 will receive $500.

With such measures in place to help you combat the ever-changing workplace, it is time for you to step out of your comfort zone and start learning something new! Every new knowledge is a tool that can help you advance further in society.

Early preparation is key

The second way to navigate through longer life expectancy is by saving for retirement early.

Saving as much as you can from your monthly salary is one way of preparing yourself for retirement. Other ways you can do to expand your savings is by investing in products like stocks or bonds, all of which come with its fair share of risks.

You can also consider putting your money into a retirement plan to accumulate savings. Committing to a retirement plan forces you to start saving for your retirement and ensures that you have a steady amount of income to do all the things you enjoy doing in your later years.

One example of such a plan is AXA Retire Happy Plus (II).

With the plan, you can choose your desired retirement age. Upon reaching the chosen age, you will receive a steady stream of pay-outs for a pre-determined period of time. The plan also helps you to further accumulate wealth by offering guaranteed returns of up to 2.67% per annum*.

For an additional layer of protection, there is also the option of purchasing additional riders. These riders can help to waive premium payments in the event of disability, unexpected retrenchment or even critical illnesses. 

Living longer doesn’t have to be a pessimistic situation. By relearning and making yourself adaptable, you will find yourself employable for many years to come. Early retirement preparation can also help to make sure that you are financially sound and stable enough to meet all your retirement goals.

*Based on an 18-year-old male, non-smoker, who selected a single premium term, a retirement age of 70 years, a lifetime payout period, and a level payout at an illustrated investment rate of return of 4.75%, the total yield at maturity is non-guaranteed. For an illustrated investment rate of return of 3.25%, receive a non-guaranteed total yield of up to 3.35% p.a. at the end of your retirement plan.

Disclaimer:

This article is for general information only and does not take into account the specific investment objectives, financial situation or needs of any particular person. The views expressed herein do not necessarily reflect the views of AXA Insurance Pte Ltd and should not be construed as the provision of advice or making of any recommendation. There is no intention to distribute, or offer to sell, or solicit any offer to purchase any product. We recommend that you seek the advice of a qualified financial advisory professional before making any decision to purchase an insurance or investment product. Whilst we have taken reasonable care to ensure that all information provided was obtained from reliable sources and correct at time of publishing, information may become outdated and opinions may change. We are not liable for any loss that may result from the access or use of the information herein provided.