When Should You Consider Working Past 62 in Singapore?


In a Young NTUC survey, 70% of participants said they wanted the option to work past 62. If you know Singaporeans, that’s not a surprise – this country’s so workaholic, some of us play golf at night. So when the re-employment act kicked in, most of us signed the re-hiring contracts before our bosses even reached the “r” in “Are you staying?” But why are people working longer? It all depends:

How does the Retirement and Re-employment (RRA) benefit workers?

The new Retirement and Re-employment Act (RRA) was lobbied by the NTUC and implemented to allow Singaporeans the option of working past 62. The act was implemented because many senior employees still enjoy the challenge of steering projects, mentoring younger colleagues, or contributing to the economy.

Prior to the RRA, this was not possible in some companies, which insisted on retiring their employees after 62.

Under the RRA, employers must now offer re-employment contracts of at least one year, to employees who have reached the age of 62. This offer will be renewed each year, up to the age of 65 (although the government has advised employers to simply offer a three-year contract at one go).

If an employer cannot offer re-employment, they will instead provide an Employment Assistance Payment (EAP) of at least three months income.

At present there are ongoing talks to extend the re-employment age to 67. This is on the principle that, as long as we are medically fit and can do the job, our retirement age should be our own choice.

But this does lead one to wonder, why do workers choose to stay on after the age of 62?

There are a host of financial as well as psychological reasons that would make the prospect of re-employment attractive:

  • To pay off outstanding debts (even if your retirement funds could cover it)
  • If you are low on savings
  • It can help if you want to run a retirement business
  • To ease into a different way of life
  • Just because there isn’t a “correct” age for retirement

1. To pay off outstanding debts (even if your retirement funds could cover it)

Most of us will not have outstanding loans at 62. However, some of us may have a few debts to clear up, be it to the bank or to personal acquaintances. In such cases, our pension or personal retirement funds may be sufficient to cover the loan, but still leave us on a tight budget.

In such cases, do consider that living on a tight budget can be much more stressful than three extra years of work.

For example, say you need to set aside an extra $200 a month, to pay off debts. To make up that extra $200, you might have to:

  • Remove subscription to a favourite cable channel (save around $50 a month)
  • Watch one less movie every month (save about $8, after concessions)
  • Miss four different occasions to eat out every month (save maybe $80, at $20 per meal)
  • Skip buying a present to spoil the grandkids every month (save about $20)

And more. The above sacrifices still only tally up to around $158 saved per month.

So consider which makes you happier: the free time from retirement, or freedom from the strict discipline needed to budget. If it’s the latter, well, three more years will pass in a breeze!

2. If you are low on savings

Beyond your CPF or fixed deposits, it is advisable to have additional savings that you can access immediately.

Some situations can cause severe distress if you don’t have the funds to deal with them right away (e.g. needing medical tests not under Medisave, having to replace a lost mobile phone, or unexpected home maintenance costs like replacing a broken bed)

If circumstances have stopped you building up a savings fund by 62, you may want to spend the extra three years diligently building one.

3. You might want to run a retirement business

Many senior employees enjoy running their own small business upon retirement. If you have previously held a management position, or have specialised skill sets, you may also find it quite lucrative to run your own consultancy, or to do freelance projects. It’s also a great way to keep the mind and body sharp!

However, there are some complications in such ventures. These can range from a lack of administrative know-how (e.g. how will you invoice clients?) to a lack of technical knowledge (e.g. setting up a website to advertise your services).

Your current office might be the best place to find help.

Use the next three years to make enquiries among colleagues. Ask the IT people out to lunch, and interrogate them on web design. Talk to the people in accounts, and copy their invoicing system.

Above all, be sure to grab any subsidised or free training from your company, for skills you may need in your retirement business.

4. To ease into a different pace of life

Retirement has different psychological effects on each of us. Some retirees are used to the structure provided by a job, and might feel a little lost with nothing to do at home.

An extra three years can provide invaluable time to mentally “shift gears”. You can develop new goals and plans, while still enjoying the companionship of your colleagues.

If your work responsibilities are being reduced, treat it as an opportunity to get used to a slower pace of life.

5. Just because there isn’t a “correct” age for retirement

Work for as long as it makes you feel fulfilled.

If you believe that your work is improving the world, or that you are leaving a legacy to be proud of, then what better way to spend your later years? Consider the following survey by Young NTUC. If you want to work past 62, you’re in the majority!

Singaporeans' view on Re-employment Act

Do you intend to work past 62? Comment below, or contact us and let us know!


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  2. How-Yue Teng on

    I am a civil servant and my new boss of 6mths gave me a bad appraisal in 2014. I am therefore not entitled to Retirement & Re-employment in my present job. I have been working all my life and now find it very difficult to get a job. Whilst the government encourages Singaporeans to work past 62, I will be jobless although I had always wanted to work as long as I am physically & mentally fit.

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