Affordable has destroyed our retirement plans

SG+ is a new programme very similar to Talking Point. Last week’s topic was about CPF and whether Sinkies have sufficient money left for retirement. After the two experts gone through with Melanie, the host, it was a glaring admission that many Sinkies will be in deep shit when they retire. The only hope to survive those greying years is to downgrade their homes, provided they have one and is down gradable.
 
The two were talking about having more savings and more schemes to bolster the existing schemes which would not be enough due to high inflation and the huge amount of money sucked into housing and medical insurance. The recommendations are something like another CPF to cover for the shortfalls in the current CPF and more insurance schemes to cover for the inadequate schemes that the people are paying now. 

The assumption is that the people have a lot of spare cash to pay and save. My ballpark figure to ensure that these people have enough to retire, to live well and to pay for their medical is to save 70% of their current income. Madness is another word.
Don’t blame the recommendations or the experts. Basically our retirement savings through the CPF are screwed. Despite being one of the biggest savers in the world, we don’t have enough for retirement. No joking. If the planners would have their full proof schemes, everyone must earn 3 times what they are earning today or save 2/3 of their incomes if they want to be safe.
 
What went wrong? Affordable is the word. By declaring everything is affordable or priced to be affordable, the savings of everyone is at risk, to be just enough for the day, for all the schemes, including housing and medical but somehow retirement was forgotten. They computed everything to be affordable, ‘gum gum ho’, and nothing left for retirement.
 
How did it start? It goes back many years ago when housing was priced to one income and to be paid off by 15 years. At this kind of affordability, many people’s savings started to grow. They genuinely smiled when they looked at their CPF statements, I mean the average workers. They would have paid up their housing loans and started to save everything they put into their CPF. And better still, if the spouse is also working, the whole CPF contribution would be in the CPF, and growing at 4 to 6% pa.
 
Then someone must have noticed the big and bigger savings in the people’s CPF. Heheh, they got plenty of money. Public housing prices must be made affordable to these people. They can afford to pay more. The prices became affordable for one income from 15 years to 25 years. Still got a lot of money leh. Make it even more affordable, with two incomes and 25 years. And then even more affordable to stretch it to 30 years or more. They called it market pricing or market subsidy or something like that, but very affordable.
 
Today, the first 30 years of CPF contributions by both spouses would be just enough for the affordable public housing. The real savings will come after 30 years of working, when both are about to retire or already retired. How to have enough for retirement? And there are the minimum sums to set aside, and now another great scheme, the Medishield Life is going to make retirement a less stressful time without the fear of big medical bill, but would tax on whatever is available in the CPF. The premium sure affordable, to who?