Commentary: How super-aged Singapore should think about financial security

Commentary: How super-aged Singapore should think about financial security With much of their wealth tied up in housing and CPF savings, ageing households need to consider whether they have sufficient financial buffers to weather unexpected shocks, say Duke-NUS’ Daniel Mahadzir and NUS’ Stanley Sia. SINGAPORE: Earlier this year, Singapore released data on household wealth for the first time, providing a more complete picture than household income data alone. Though real incomes have grown in the last decade, a significant portion of household wealth is held in housing and Central Provident Fund (CPF) savings, especially among lower- and middle-income households. Those two relatively constrained asset pools account for about 90 per cent of total wealth in lower-wealth households, and around 80 per cent to 85 per cent even for a middle household. If wealth is tied in illiquid assets, an illness or unexpected caregiving duty may expose a financial vulnerability – from immediate medical costs to long-term health expenses and income loss. The new data tells us how much wealth Singapore households have and also raises an important question: How much financial resilience does that wealth actually provide when longevity can be a double-edged sword? THE STRESS OF FINANCIAL PRECARITY Life expectancy at birth in Singapore has risen to about 84 years, among the highest in the world, yet Singaporeans still spend roughly a decade of those years living in ill health. Those who reach age 65, which will be the retirement age from Jan 1, 2029, can expect to live another 21.6 years on average. To be clear, most households in Singapore are not in immediate poverty or destitution, given high home ownership and mandatory savings. At the same time, a growing share of families report feeling financially stretched. That stretched feeling does not necessarily amount to financial precarity. But worries about whether they can absorb an unexpected financial shock can still weigh heavily on ageing households. Financial precarity for ageing Singaporeans often has three features: First, incomes fall faster than expenses, especially if switching to part-time work or when illness curtails work altogether. Second, essential costs such as healthcare, caregiving and utilities take up a rising share of the household budget, leaving little room for savings. Third, there is limited liquid wealth outside the home and CPF, so households have few levers to pull when things go wrong. Financial precarity has been shown to be associated with chronic stress, delayed care-seeking and poorer mental health. Households that constantly worry about making ends meet are more likely to postpone seeing a doctor, skip follow-ups or default on medication. INSURANCE COVERAGE AND AFFORDABILITY Insurance should, in theory, be a key tool to reduce this precarity. Singapore has consciously built a layered system to include MediShield Life as universal basic hospital coverage, CPF LIFE for retirement income, CareShield Life for long-term care, and a mix of voluntary schemes and private products. The reality on the ground is more nuanced, with difficult trade-offs in coverage and affordability for older Singaporeans. Premiums rise with age – be it nationalised schemes or commercial plans. Premiums are actuarially determined, with each age group paying for its own expected claims, so seniors pay more because they are more likely to be hospitalised and incur larger bills. More individuals over 65 years old receive MediShield Life payouts each year compared to the rest of the population, and claims and payouts for seniors have grown much faster than for younger age groups. Rising premiums become difficult to sustain once people stop full-time work. For MediShield Life, the government subsidises a significant portion of seniors’ premiums and provides MediSave top-ups for Pioneer and Merdeka Generation cohorts to keep basic cover affordable. Private plans can become a financial pressure point. These include Integrated Shield Plans (IP) which offer coverage on top of MediShield Life, add-on IP riders, or even standalone critical illness and long-term care policies. In a September parliamentary reply, the Ministry of Health said the number of private insurance downgrades and discontinuations had increased while premiums continue to rise: For IPs, there were 128,200 in 2025, up from 99,000 in 2023. For IP riders, the number more than doubled to 181,800 over the same period. MOH said it does not track the reasons for giving up insurance plans, which could include affordability concerns or right-sizing coverage to needs and circumstances. The trade-off is that seniors who feel financially stretched may choose to spend less on insurance, and the coverage they give up could potentially leave them more exposed to out-of-pocket costs from a major health shock. To its credit, the government has been adjusting policy, bolstering retirement savings and healthcare buffers. CPF contribution rates for workers aged 55 to 65 were raised in 2026 (and are scheduled to increase again on Jan 1, 2027), with a one-off CPF top-up for older Singaporeans with lower balances and expansion of subsidies for long term care. CONVERSATIONS ABOUT MONEY Singaporeans need support that is not only generous enough, but also simple and predictable for ordinary families to plan confidently around it. A single, clear view of support across various national schemes or targeted programmes, current or projected forward, would let families understand what they can expect and when, and plan with greater certainty. Still, financial resilience in old age is part policy support and part personal preparation. This means understanding one’s current financial standing better and what buffers one has or can build. What does the whole balance sheet look like? Many Singaporeans know their monthly salary, but far fewer have a clear sense of their net wealth and how it might evolve over time. Taking the time to list assets and liabilities, and to understand what current CPF and MediSave balances translate into at age 65, 75 and 85, can turn vague anxiety into concrete numbers that can be acted on. How much of this can be drawn on when actually needed? Buffers should be treated as something to be built deliberately rather than left to chance. This includes prioritising small, regular top-ups to MediSave or retirement balances when schemes match those contributions. Housing does not need to be treated as either untouchable or something to cash out at the first opportunity. The value of a home lies also in the social ties and support networks in the community that become important in old age. Options like rightsizing to a smaller or different type of flat nearby, or using the Lease Buyback Scheme can release some equity while keeping family and familiar support networks near. Seniors should also plan ahead as to how any proceeds could be structured to support them steadily over decades, rather than spent as a single lump sum early on. Who else does the plan depend on? In Singapore culture, having conversations about ageing and money with families may feel taboo. But parents, siblings or adult children should discuss who can provide what kind of care, what resources exist, and personal wishes. This can help prevent making difficult financial and caregiving decisions in a rush or under duress. Longer lives are often celebrated, but for households with thin financial buffers, each extra year can feel like a financial tightrope. The real test of our success as an ageing society will be whether families can look to their 70s and 80s with a sense of security and dignity. Muhammad Daniel Azlan bin Mahadzir is Global Health Innovation Lead at SingHealth Duke-NUS Global Health Institute. Stanley Sia is a 2025 cohort of Distinguished Senior Fellow at National University of Singapore.