Singapore to raise retirement age to 65 by 2012

20 Aug 07

Singapore will raise the retirement age for its citizens to 65 from 62 by 2012 and eventually to 67 to account for the higher life expectancy of its aging population, its prime minister said on Sunday.

“The best way to be all right in old age and to have enough savings is to stay employed and to work longer. Because with longer lifespans you cannot retire at 55 and live until 80 or 85 or 90,” Singapore’s Prime Minister Lee Hsien Loong said in a speech on state television to mark the city-state’s national day.

Like governments in developed nations such as Germany and Japan, Singapore’s leaders worry about the long-term implications of an aging population – higher pension costs, a shrinking workforce, and slower economic growth.

“As lifespans go up you have to work longer and then have not too long a period of retirement at the end of your life,” said Lee, son of the city-state’s founding premier Lee Kuan Yew.

In February, the government introduced an income-support scheme called “workfare” aimed at providing financial support to older, low-income workers as part of the 2007/08 budget.

The Southeast Asian island’s government wants to boost the workforce by increasing its population to as much as 6.5 million from 4.5 million over the next 40 to 50 years by allowing more immigrants into the country.

Singapore, the wealthiest country in Asia after Japan in terms of gross national income per capita, is already the world’s fourth most-densely populated country – with more more than 6,208 people per square km.

By 2050 that is expected to rise to 6,497 people per square km, leaving it 176 times more crowded than the United States, and nearly as packed as Hong Kong, according to the United Nations.

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