15 ms·

America vs. Singapore: You can't save your way out of economic shocks

311 points by guardianbob 8mo ago

rayiner 8mo ago
A confounding factor here is that savings behavior is cultural rooted: https://pmc.ncbi.nlm.nih.gov/articles/PMC6135367/ https://pmc.ncbi.nlm.nih.gov/articles/PMC6135367/. Studies show that people within a country can have substantially different savings behaviors, robustly correlated with their origin countries, even among people who are third generation immigrants. It’s a mistake to treat either the U.S. or Singapore as homogenous populations for purposes of this analysis.
- guardianbob 8mo ago
  Both sides see declines when hit with economic shocks We are talking about material impacts, not culture
- janalsncm 8mo ago
  75% of Singaporeans are ethnically Chinese so based on what you are saying it would be worth comparing SG Chinese to Chinese CN on regret since China has a much less robust safety net.
- dexwiz 8mo ago
  I once heard a linguistic explanation for this. European languages have a future tense, which means people have different ideas of themselves in the present and future. You can even hear this in phrases like "that's a problem for future me." While Chinese lacks the European styled future tense, ignoring time phrases, auxiliary verbs, etc. So people more clearly conceptualize their present and future selves as the same. Leading to things like increased saving. This of course is rooted in linguist psychology, a very soft science. But still an interesting idea.
  - itemize123 8mo ago
    dont think this hold much water at all.
  - rudolftheone 8mo ago
    This sounds like the 'Future Time Reference' hypothesis by Keith Chen (2013). It’s indeed a fascinating idea, but it’s essentially an example of Galton’s problem (treating related cultures/languages as independent data points). What makes this story (scientifically) great is that Chen himself co-authored a follow-up study just two years later [1] to rigorously test his own theory. When they re-analyzed the data using mixed-effects models to control for cultural phylogeny and relatedness, the correlation between grammar and savings pretty much disappeared. They concluded the original finding was likely a spurious correlation. It turns out that cultural history drives both the language we speak and our saving habits, rather than the grammar causing the behavior. [1] https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0132145 https://journals.plos.org/plosone/article?id=10.1371/journal...
    - dexwiz 7mo ago
      Thanks for the follow up. I am always hesitant to believe things that sound too Gladwellian.
mothballed 8mo ago
Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing which even the better off citizens take advantage of in Singapore (maybe even disproportionately so since there can be a long wait to get in, you are older and more settled at that point). Immigrants that get milked dry and go broke and jobless during a shock are booted from the country before they can be polled. ------ re: below due to throttling ------------- Vs say US, where immigrants and those funding public housing are generally better off than the people getting subsidized housing. Public housing is more a progressive than regressive tax in the US, so quite dissimilar. Immigrants in US are on average far better off than those on public housing. Asking "but how is this any different" (after I already answered it, lol) over and over doesn't negate this, nor the fact that immigrants are like half of workers in Singapore vs only 10% in the US so the funding dynamic and dependency is far different.
- dangus 8mo ago
  That sounds quite similar to the US.
- joe_mamba 8mo ago
  >Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing which even the better off citizens take advantage of in Singapore It's similar in Vienna where only native Viennese are immediately eligible for social housing, but outsiders will end up paying into the system without being eligible.
  - erichocean 8mo ago
    > outsiders will end up paying into the system By definition, outsiders don't have to pay into the system since they already have a gov't somewhere else that is dedicated to them, just like the Viennese do.
    - joe_mamba 8mo ago
      >By definition, outsiders don't have to pay into the system They absolutely do pay into the system when they move to and work in Vienna. By outsiders in this context I meant foreign workers. I assumed that was clear from the context of the discussion.
Aperocky 8mo ago
This article seem to be confounding external impact with internal motivation. Yes the jobloss impact caused the people to be unable to save and in turn they wished they have saved more.. but ignored is whether they could to begin with. Of course external impact had little to do with internal procrastination.
- dangus 8mo ago
  Maybe I read the article too fast but I didn’t get that takeaway at all? It’s basically just saying that the uninsured catastrophic event risk in America magnifies shock events. E.g., if you have a major hospital visit in America you’re way more likely to regret not saving enough, but in Singapore there’s basically no effect since hospital stays don’t drain your savings account.
  - guardianbob 8mo ago
    That’s what I also got from this article Not just healthcare stuff, but also apparently Singaporeans tend to have a lower unemployment rate, so they be able to recover from stuff faster
- ebiester 8mo ago
  It's not confounding at all. It's making the point that internal motivation, according to the study, has no major factor in savings regret. It says that understanding risk (as operationalized by understanding probability) has a larger effect. But it is also saying that the more external impact someone has, the more they regret saving more -- in the United States but not Singapore. The study is explicitly saying that internal motivation does not seem to matter. And the article is arguing the reason why.
hnthrow0287345 8mo ago
>They’re failing to save because the world is rough, and their institutions don’t do enough to help them weather it. Well, America is rough. It turned on hardcore capitalism mode for itself because a significant portion of its population wants to try and solo socioeconomic hardships and hates any one who doesn't want the same challenge. But not to just blame the voter, lots of money is spent for setting up systems to be amenable to acquiring more money. The very richest have correctly made a bet that uprisings to displace the wealthy and politicians just don't occur here these days, and therefore there is no real threat or need to change the way things have been going for the last 25 years or so.
- vladms 8mo ago
  Isn't it more a cultural issue though? As a European, I think many Americans take pride and love to succeed "on their own" and accept they could "die trying" (exaggerating a bit, hence the quotes, but the feeling holds). Yes, the systems are amenable to acquiring more money, but I would claim that all that the richest need to do is to push the idea that "anyone can make it" - which was probably (more) true 50 years ago, but is probably an illusion today (some comments at: https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_United_States#Current_state https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...). Edit: I do not claim one model is better than the other; just that the culture influences the outcome more than other aspects.
  - irishcoffee 8mo ago
    Most Americans I know in my middling years are counting on the government to support them in their old age, quite the opposite that you’re exposed to via online manipulation hitpeices.
    - bluGill 8mo ago
      And the government will - sortof. It is enough to eat and keep the heat on. However if you want anything other than a basic simple life (travel, hobbies...) it is easy to run out of money.
    - 8mo ago
InkCanon 8mo ago
Singapore's economic policies are complicated and often misdirecting. I'll break down the misconceptions. The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a minimum of 2.6%). The returns are specifically decoupled from the real long term returns. This has historical roots in the government needing vast capital financing. They make enormous amounts of the delta between the short term interest rate and long term capital gains. Singapore has no oil or natural resources, but it's sovereign wealth fund has AUM in the regions of countries like Norway which do for this reason. It is not a shock absorber like the article suggests. The withdrawal terms are strict - housing, a significant medical expense and retirement are the only real ways to get money out of it. "Trying to keep people employed" is a goal, not a policy. In fact the Singapore government maintains a large worker supply through immigration. The foreign worker population, ~30%. The main goal of the government is to maximize the absolute number of people working. The reason it raising the retirement age is effective in workforce participation is because most people have no choice. Retirement only pays out after the age. The working life of an average Singaporean has seen 37% gone to CPF, maybe another 10% to income taxes, another 5% to GST, road tax, property tax, etc. After all this there's the astronomical cost of living. This is also intentional, to raise the number of employees.
- ecshafer 8mo ago
  The CPF sounds pretty clever. It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. It makes the government money. This sounds like a win win kind of policy.
  - foxyv 8mo ago
    Why does the government get to decide when we retire?
    - paxys 8mo ago
mark_l_watson 8mo ago
I had the privilege of getting a working gig in Singapore for a small AI startup: such a well run country! There is a sense of community for helping by employing people who need jobs, the police were friendly and I felt very safe there (I like to take long walks either early in the morning or late at night and I felt very secure.) Amazing what the people and government have achieved since the end of WW2. 100% respect for them. A side comment: I enjoy listening to English language news from many countries around the world to get different viewpoints. News media from Singapore is very interesting, indeed!
- malshe 8mo ago
  I spent years in Singapore and loved it there. Never had to face road rage (which so many of us experience daily several times driving in Texas! NextDoor is full of these stories) or aggressive behavior by anyone in authority including police and immigration officers. I know many people find Singapore boring after a while but it didn't bother me much. On the flip side, the cost of living is high as a foreigner and traveling to the US is very tiring due to the long distance.
  - eru 8mo ago
    Boring is good for business.
    - malshe 8mo ago
      I agree. Predictability is underrated.
      - eru 8mo ago
        It's underrated in popular discourse. Businesses are extremely aware of it. Hence their love for Switzerland, Singapore, the Netherlands, or even the US which despite political drama has a fairly predictable business environment (especially in regards to lots of precedents for legal cases).
  - rootusrootus 8mo ago
bluGill 8mo ago
You know who they didn't interview: those who regret saving so much. Many of those people are dead and so the regret is something we can only apply on assumption that they would. I've known a few people who unexpectedly died before they hit retirement age. I've know a few people who retired and died suddenly. The vast majority of people in a "first world" country have an expected lifespan of about 80 - but there is a statistical curve and people start dieing in significant numbers at 65, while you are not an outlier until you make it to near 100 (though some exist). You need to have some emergency savings. You should save for retirement somehow. If you can structure the above as insurance - and you can trust the insurance - (I know a few cases where the insurance type system went bankrupt and those with a "policy got nothing") that is best. Once the above is taken care of though, you can't take it with you (at least in most religions) so spend it. Save enough, but not too much.
- 3rodents 8mo ago
  People who save a lot are typically people comforted by sitting on a big nest egg. Saving a lot for retirement and then dying the day before retirement isn’t necessarily going to be a source of regret, because they had 30 years of warm fuzzy feelings about eventually hatching their nest egg. They could have spent it all instead, and had a life full of anxiety. You’re looking for people who didn’t want to save but begrudgingly saved at the expense of their pre-retirement life and then died before they could enjoy retirement. That’s a much smaller group.
  - bluGill 8mo ago
    I'm not sure. There is a warm fuzzy from knowing you are okay if things go bad of course, but how many of those who saved for the feeling would have saved less - they still would want a good amount saved for things going wrong of course but not that much.
    - al_borland 8mo ago
      I’m a saver. I’ve had coworkers tell me I “live like a poor person.” I disagree, but can see how it might look that way sometimes. The thing is, I have everything I want. On serval occasions I’ve gotten a bonus or something and decided I should recklessly spend a certain percentage of it. It’s hard, because there is nothing I want. I spend months trying to come up with ideas and buy some stuff, but rarely all of it. This last year, I just stayed at a really expensive hotel to finish out the reckless spending budget… and think I would have been happier at a less nice place. I own my home, my car is paid off, I go on a nice trip or two each year. I’m not sure what else I’d want. I like the idea that I could buy something more than the reality of having it. In many cases, I find the idea of having more things stressful. Having multiple homes or cars just sounds like work. A boat sounds like a nightmare; the best boat is a friend’s boat. If I won the lottery, my big splurge would probably be selling my house and going back to renting. I liked not having to care about anything as a renter. My grandma lived to 104, and had she lived another couple months, there would have been a lot of uncomfortable talks about where the money would come from to keep supporting her. She died with about $1k left to her name. You could say she did it perfectly, but this caused a lot of stress for the people taking care of her. She also got lucky with various benefits, which a lot of work went into getting. She lived a very frugal life, so this was not overspending on her part… she just lived a long time. I don’t want anyone who might be taking care of me to need to worry like that, and I don’t want to need to worry either. I don’t know how much I’ll need, but would rather have it and not need it, than need it and not have it… and I don’t feel like I’m making any sacrifices for that. What would make me miserable is having to go back to work in my 70s, because I spent too much money on nonsense I didn’t even want when I was younger due to social pressure. There is a lot of freedom is not being saddled with payments or expensive stuff. If I lost my job, I could probably make ends meet working just about anywhere. This gives me so peace of mind, and if I didn’t want to work for a few years, I could do that too. I do like to buy nice stuff when I do buy things. I often wish I didn’t. I feel like there is also freedom is not having a bunch of nice stuff. When it’s too nice, the stuff ends up feeling like it needs to be treated with kid gloves and protected. I’d like to feel less attached to some of my things. In college there were 2 kids who shared a dorm room and they had basically nothing. They never locked their door, because there was nothing to take. Move in/out probably took 10 minutes. I kind of envied the amount of freedom that gave them. I think about it often, even decades later. I knew other people who were robbed and they were always stressed out. If people have ideas of things to spend money on to “save less”, I’m all ears. I have been out of ideas for years.
Filip_portive 8mo ago
[flagged]
readthenotes1 8mo ago
"In Singapore, people who report never putting off difficult things are more likely to express saving regret than those who sometimes do." That seems like what they should have been looking at re procrastination--conscientiousness. I am not at all surprised that people who Take Care of Business lament not doing a better job (saving) and people who YOLO don't as much.
Noumenon72 8mo ago
"Saving regret" ought to also refer to when you have saved too much. The shocks in that case would be things like "inflation ate away all my savings before I got to use them" or "the government confiscated my savings via wealth taxes" or just generally "the government made me spend 37% of my income on saving when I wanted to use it to raise kids."
- kdheiwns 8mo ago
  Raising kids in a society where people hate their community and don't want to contribute through things like taxes generally isn't a society that is good for kids and their development.
  - F35Machinist 7mo ago
    You do realize that in the US most of your taxes are going to direct transfers to rich people right? The average recipient of social security has on average 9x the net worth of the average payer. What about that is about community? birth rates have collapsed and we are still shoveling money into the pockets of old rich people. Children live in poverty while the old live in decadence. No shit I don't want to contribute so that some old degenerate can spend my hard earned cash on another round of slots at the casino.
- kaibee 8mo ago
  > "the government made me spend 37% of my income on saving when I wanted to use it to raise kids." This is a particularly funny one tbh. A nation's kids _are_ the retirement plan. It doesn't matter how many numbers you put in spreadsheets dated for 20-40 years into the future, if in said future, there isn't actually anyone to accept those numbers in exchange for labor.
- nancyminusone 8mo ago
  That seems like it causes a different category of problems than "I wish I had saved more but I didn't and now I have nothing"
Sytten 8mo ago
Forced savings like done in Quebec, Canada is likely the best model for most people even though I dont like it as an individual that knows how to manage its portfolio. It also has the benefit of creating a sovereign wealth fund that can invest locally and be an economic driver but independent from the government.
- nick__m 8mo ago
  I actually like the forced saving of Québec. I also have a defined benefit pension plan, a TFSA and RRSP but I am happy to be forced to contribute the RRQ for the general welfare of the province even though I know how manage my portfolio. Considering that they also have to consider economic development in their investment decisions, the RRQ funds are well managed by the CDPQ.
janalsncm 8mo ago
Numeracy questions are on page 20 here https://www.rand.org/content/dam/rand/pubs/working_papers/WR1200/WR1270/RAND_WR1270.pdf https://www.rand.org/content/dam/rand/pubs/working_papers/WR... People who score well on probability numeracy are likely better educated and better paid and have more in automatic savings plans. So if someone is maxing out their 401k they don’t feel they need to save more. The article shows that in the US there is a 25 point gap between high and low income on savings regret, and a 14 point gap between high and low numeracy scores. In Singapore where savings are more automatic numeracy is a more powerful predictor.
solarisos 8mo ago
The 'saving' vs. 'investing' debate here has a direct parallel in technical debt. Singapore’s model of high-efficiency reinvestment is like a well-refactored codebase—it allows for rapid pivots when a shock hits. America’s model feels more like a legacy system with massive technical debt; the 'savings' are there, but the friction of the existing infrastructure makes it nearly impossible to deploy them effectively during a crisis.
wraptile 8mo ago
Comparing any country to Singapore is frankly ridiculous. Singapore is a unique tiny tax haven where billionaires send their kids to study. To compare it to the biggest economy in the world just seems silly.
deepsun 8mo ago
Did US have economic shocks? Compared to, say, Eastern Europe or Sub-Saharan Africa, all people who lived through real economic shocks and hyper-inflation tend to save less, not more. Because they know the savings can evaporate one day.
- 10000truths 8mo ago
  They absolutely save. Just not in their own currency - they'll instead rush to cash out for gold, USD, prime real estate (if they're rich), or some other less volatile store of value, before their currency gets devalued even further.
  - deepsun 7mo ago
    Gold and USD is easily stolen, especially if stored in a bank. Prime real estate will find a new owner (e.g. the case I saw myself -- surprise, turns out the seller, even if's the government/municipality itself, did not have rights to sell you the land 15 years ago, good bye). Been there, done that.
choonway 8mo ago
if something doesn’t exist in this world, no amount of money will guarantee that you will get it. if it exists in abundance like the air that we breathe no amount of conspiracy will be able to monopolize it. finance only works in a very narrow band of environmental conditions. we are very well past that.
deleted 8mo ago
[deleted]
shevy-java 8mo ago
Singapore, despite some of its laws being rather harsh, also had very intelligent leaders. Lee Kuan Yew was one of them; he correctly analysed the US behaviour. That can be seen on youtube too. https://www.youtube.com/watch?v=vNQXLhIcPrc https://www.youtube.com/watch?v=vNQXLhIcPrc What I find interesting about Singapore is that it is a fairly small country: a bit over 6 million people. That's small compared to the USA (341 million). When you are such a small country or city-country, being prosperous requires intelligence and efficiency. And diplomatic skills too. Taiwan also showed this, though it is a bit larger than Singapore (23.4 million). It seems that this is a good success story - to have competent and intelligent workers and people. Education is one key factor of success here.
- AdamN 8mo ago
  It's sort of a small country but bigger than Finland, Denmark, Ireland, New Zealand, Qatar. It's actually right about in the middle in terms of population.
bdbdbdb 7mo ago
Maybe I missed something in the article but why Singapore and not a country closer in culture to the US? Like why not compare to Canada or the UK, or anywhere in Europe? Did the study have to go as far as Singapore to find somewhere where the situation was reversed or was there another factor?
- inanutshellus 7mo ago
  A few days ago there was a discussion about how Singapore forces their people to save and invest in bonds. The country makes money on the difference between the daily/compound rates and it keeps their workforce working. In other words, I suspect it's "we started with Singapore then compared to America" not the other way around.

311 points by guardianbob 8mo ago

A confounding factor here is that savings behavior is cultural rooted: https://pmc.ncbi.nlm.nih.gov/articles/PMC6135367/ https://pmc.ncbi.nlm.nih.gov/articles/PMC6135367/. Studies show that people within a country can have substantially different savings behaviors, robustly correlated with their origin countries, even among people who are third generation immigrants. It’s a mistake to treat either the U.S. or Singapore as homogenous populations for purposes of this analysis.

guardianbob 8mo ago
Both sides see declines when hit with economic shocks We are talking about material impacts, not culture
janalsncm 8mo ago
75% of Singaporeans are ethnically Chinese so based on what you are saying it would be worth comparing SG Chinese to Chinese CN on regret since China has a much less robust safety net.
dexwiz 8mo ago
I once heard a linguistic explanation for this. European languages have a future tense, which means people have different ideas of themselves in the present and future. You can even hear this in phrases like "that's a problem for future me." While Chinese lacks the European styled future tense, ignoring time phrases, auxiliary verbs, etc. So people more clearly conceptualize their present and future selves as the same. Leading to things like increased saving. This of course is rooted in linguist psychology, a very soft science. But still an interesting idea.
- itemize123 8mo ago
  dont think this hold much water at all.
- rudolftheone 8mo ago
  This sounds like the 'Future Time Reference' hypothesis by Keith Chen (2013). It’s indeed a fascinating idea, but it’s essentially an example of Galton’s problem (treating related cultures/languages as independent data points). What makes this story (scientifically) great is that Chen himself co-authored a follow-up study just two years later [1] to rigorously test his own theory. When they re-analyzed the data using mixed-effects models to control for cultural phylogeny and relatedness, the correlation between grammar and savings pretty much disappeared. They concluded the original finding was likely a spurious correlation. It turns out that cultural history drives both the language we speak and our saving habits, rather than the grammar causing the behavior. [1] https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0132145 https://journals.plos.org/plosone/article?id=10.1371/journal...
  - dexwiz 7mo ago
    Thanks for the follow up. I am always hesitant to believe things that sound too Gladwellian.

mothballed 8mo ago

Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing which even the better off citizens take advantage of in Singapore (maybe even disproportionately so since there can be a long wait to get in, you are older and more settled at that point). Immigrants that get milked dry and go broke and jobless during a shock are booted from the country before they can be polled. ------ re: below due to throttling ------------- Vs say US, where immigrants and those funding public housing are generally better off than the people getting subsidized housing. Public housing is more a progressive than regressive tax in the US, so quite dissimilar. Immigrants in US are on average far better off than those on public housing. Asking "but how is this any different" (after I already answered it, lol) over and over doesn't negate this, nor the fact that immigrants are like half of workers in Singapore vs only 10% in the US so the funding dynamic and dependency is far different.

dangus 8mo ago
That sounds quite similar to the US.
joe_mamba 8mo ago
>Singapore has a regressive shock absorber model where something like half the country are immigrants that are ineligible for, say, public housing which even the better off citizens take advantage of in Singapore It's similar in Vienna where only native Viennese are immediately eligible for social housing, but outsiders will end up paying into the system without being eligible.
- erichocean 8mo ago
  > outsiders will end up paying into the system By definition, outsiders don't have to pay into the system since they already have a gov't somewhere else that is dedicated to them, just like the Viennese do.
  - joe_mamba 8mo ago
    >By definition, outsiders don't have to pay into the system They absolutely do pay into the system when they move to and work in Vienna. By outsiders in this context I meant foreign workers. I assumed that was clear from the context of the discussion.

Aperocky 8mo ago

This article seem to be confounding external impact with internal motivation. Yes the jobloss impact caused the people to be unable to save and in turn they wished they have saved more.. but ignored is whether they could to begin with. Of course external impact had little to do with internal procrastination.

dangus 8mo ago
Maybe I read the article too fast but I didn’t get that takeaway at all? It’s basically just saying that the uninsured catastrophic event risk in America magnifies shock events. E.g., if you have a major hospital visit in America you’re way more likely to regret not saving enough, but in Singapore there’s basically no effect since hospital stays don’t drain your savings account.
- guardianbob 8mo ago
  That’s what I also got from this article Not just healthcare stuff, but also apparently Singaporeans tend to have a lower unemployment rate, so they be able to recover from stuff faster
ebiester 8mo ago
It's not confounding at all. It's making the point that internal motivation, according to the study, has no major factor in savings regret. It says that understanding risk (as operationalized by understanding probability) has a larger effect. But it is also saying that the more external impact someone has, the more they regret saving more -- in the United States but not Singapore. The study is explicitly saying that internal motivation does not seem to matter. And the article is arguing the reason why.

hnthrow0287345 8mo ago

>They’re failing to save because the world is rough, and their institutions don’t do enough to help them weather it. Well, America is rough. It turned on hardcore capitalism mode for itself because a significant portion of its population wants to try and solo socioeconomic hardships and hates any one who doesn't want the same challenge. But not to just blame the voter, lots of money is spent for setting up systems to be amenable to acquiring more money. The very richest have correctly made a bet that uprisings to displace the wealthy and politicians just don't occur here these days, and therefore there is no real threat or need to change the way things have been going for the last 25 years or so.

vladms 8mo ago
Isn't it more a cultural issue though? As a European, I think many Americans take pride and love to succeed "on their own" and accept they could "die trying" (exaggerating a bit, hence the quotes, but the feeling holds). Yes, the systems are amenable to acquiring more money, but I would claim that all that the richest need to do is to push the idea that "anyone can make it" - which was probably (more) true 50 years ago, but is probably an illusion today (some comments at: https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_United_States#Current_state https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...). Edit: I do not claim one model is better than the other; just that the culture influences the outcome more than other aspects.
- irishcoffee 8mo ago
  Most Americans I know in my middling years are counting on the government to support them in their old age, quite the opposite that you’re exposed to via online manipulation hitpeices.
  - bluGill 8mo ago
    And the government will - sortof. It is enough to eat and keep the heat on. However if you want anything other than a basic simple life (travel, hobbies...) it is easy to run out of money.
  - 8mo ago

InkCanon 8mo ago

Singapore's economic policies are complicated and often misdirecting. I'll break down the misconceptions. The primary purpose of CPF is not a pension scheme. It is structured as a massive forced bond purchase scheme by citizens. Financially what happens is the 37% of citizen income buys a long term bond (till retirement age, on average decades) at rock bottom interest rates (it's pegged to the overnight rate or a minimum of 2.6%). The returns are specifically decoupled from the real long term returns. This has historical roots in the government needing vast capital financing. They make enormous amounts of the delta between the short term interest rate and long term capital gains. Singapore has no oil or natural resources, but it's sovereign wealth fund has AUM in the regions of countries like Norway which do for this reason. It is not a shock absorber like the article suggests. The withdrawal terms are strict - housing, a significant medical expense and retirement are the only real ways to get money out of it. "Trying to keep people employed" is a goal, not a policy. In fact the Singapore government maintains a large worker supply through immigration. The foreign worker population, ~30%. The main goal of the government is to maximize the absolute number of people working. The reason it raising the retirement age is effective in workforce participation is because most people have no choice. Retirement only pays out after the age. The working life of an average Singaporean has seen 37% gone to CPF, maybe another 10% to income taxes, another 5% to GST, road tax, property tax, etc. After all this there's the astronomical cost of living. This is also intentional, to raise the number of employees.

ecshafer 8mo ago
The CPF sounds pretty clever. It covers a major individual cost and need (retirement, medical, housing) instead of just throwing it into a tax. It makes the government money. This sounds like a win win kind of policy.
- foxyv 8mo ago
  Why does the government get to decide when we retire?
  - paxys 8mo ago

mark_l_watson 8mo ago

I had the privilege of getting a working gig in Singapore for a small AI startup: such a well run country! There is a sense of community for helping by employing people who need jobs, the police were friendly and I felt very safe there (I like to take long walks either early in the morning or late at night and I felt very secure.) Amazing what the people and government have achieved since the end of WW2. 100% respect for them. A side comment: I enjoy listening to English language news from many countries around the world to get different viewpoints. News media from Singapore is very interesting, indeed!

malshe 8mo ago
I spent years in Singapore and loved it there. Never had to face road rage (which so many of us experience daily several times driving in Texas! NextDoor is full of these stories) or aggressive behavior by anyone in authority including police and immigration officers. I know many people find Singapore boring after a while but it didn't bother me much. On the flip side, the cost of living is high as a foreigner and traveling to the US is very tiring due to the long distance.
- eru 8mo ago
  Boring is good for business.
  - malshe 8mo ago
    I agree. Predictability is underrated.
    - eru 8mo ago
      It's underrated in popular discourse. Businesses are extremely aware of it. Hence their love for Switzerland, Singapore, the Netherlands, or even the US which despite political drama has a fairly predictable business environment (especially in regards to lots of precedents for legal cases).
- rootusrootus 8mo ago

bluGill 8mo ago

You know who they didn't interview: those who regret saving so much. Many of those people are dead and so the regret is something we can only apply on assumption that they would. I've known a few people who unexpectedly died before they hit retirement age. I've know a few people who retired and died suddenly. The vast majority of people in a "first world" country have an expected lifespan of about 80 - but there is a statistical curve and people start dieing in significant numbers at 65, while you are not an outlier until you make it to near 100 (though some exist). You need to have some emergency savings. You should save for retirement somehow. If you can structure the above as insurance - and you can trust the insurance - (I know a few cases where the insurance type system went bankrupt and those with a "policy got nothing") that is best. Once the above is taken care of though, you can't take it with you (at least in most religions) so spend it. Save enough, but not too much.

3rodents 8mo ago
People who save a lot are typically people comforted by sitting on a big nest egg. Saving a lot for retirement and then dying the day before retirement isn’t necessarily going to be a source of regret, because they had 30 years of warm fuzzy feelings about eventually hatching their nest egg. They could have spent it all instead, and had a life full of anxiety. You’re looking for people who didn’t want to save but begrudgingly saved at the expense of their pre-retirement life and then died before they could enjoy retirement. That’s a much smaller group.
- bluGill 8mo ago
  I'm not sure. There is a warm fuzzy from knowing you are okay if things go bad of course, but how many of those who saved for the feeling would have saved less - they still would want a good amount saved for things going wrong of course but not that much.
  - al_borland 8mo ago
    I’m a saver. I’ve had coworkers tell me I “live like a poor person.” I disagree, but can see how it might look that way sometimes. The thing is, I have everything I want. On serval occasions I’ve gotten a bonus or something and decided I should recklessly spend a certain percentage of it. It’s hard, because there is nothing I want. I spend months trying to come up with ideas and buy some stuff, but rarely all of it. This last year, I just stayed at a really expensive hotel to finish out the reckless spending budget… and think I would have been happier at a less nice place. I own my home, my car is paid off, I go on a nice trip or two each year. I’m not sure what else I’d want. I like the idea that I could buy something more than the reality of having it. In many cases, I find the idea of having more things stressful. Having multiple homes or cars just sounds like work. A boat sounds like a nightmare; the best boat is a friend’s boat. If I won the lottery, my big splurge would probably be selling my house and going back to renting. I liked not having to care about anything as a renter. My grandma lived to 104, and had she lived another couple months, there would have been a lot of uncomfortable talks about where the money would come from to keep supporting her. She died with about $1k left to her name. You could say she did it perfectly, but this caused a lot of stress for the people taking care of her. She also got lucky with various benefits, which a lot of work went into getting. She lived a very frugal life, so this was not overspending on her part… she just lived a long time. I don’t want anyone who might be taking care of me to need to worry like that, and I don’t want to need to worry either. I don’t know how much I’ll need, but would rather have it and not need it, than need it and not have it… and I don’t feel like I’m making any sacrifices for that. What would make me miserable is having to go back to work in my 70s, because I spent too much money on nonsense I didn’t even want when I was younger due to social pressure. There is a lot of freedom is not being saddled with payments or expensive stuff. If I lost my job, I could probably make ends meet working just about anywhere. This gives me so peace of mind, and if I didn’t want to work for a few years, I could do that too. I do like to buy nice stuff when I do buy things. I often wish I didn’t. I feel like there is also freedom is not having a bunch of nice stuff. When it’s too nice, the stuff ends up feeling like it needs to be treated with kid gloves and protected. I’d like to feel less attached to some of my things. In college there were 2 kids who shared a dorm room and they had basically nothing. They never locked their door, because there was nothing to take. Move in/out probably took 10 minutes. I kind of envied the amount of freedom that gave them. I think about it often, even decades later. I knew other people who were robbed and they were always stressed out. If people have ideas of things to spend money on to “save less”, I’m all ears. I have been out of ideas for years.

Filip_portive 8mo ago

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readthenotes1 8mo ago

"In Singapore, people who report never putting off difficult things are more likely to express saving regret than those who sometimes do." That seems like what they should have been looking at re procrastination--conscientiousness. I am not at all surprised that people who Take Care of Business lament not doing a better job (saving) and people who YOLO don't as much.

Noumenon72 8mo ago

"Saving regret" ought to also refer to when you have saved too much. The shocks in that case would be things like "inflation ate away all my savings before I got to use them" or "the government confiscated my savings via wealth taxes" or just generally "the government made me spend 37% of my income on saving when I wanted to use it to raise kids."

kdheiwns 8mo ago
Raising kids in a society where people hate their community and don't want to contribute through things like taxes generally isn't a society that is good for kids and their development.
- F35Machinist 7mo ago
  You do realize that in the US most of your taxes are going to direct transfers to rich people right? The average recipient of social security has on average 9x the net worth of the average payer. What about that is about community? birth rates have collapsed and we are still shoveling money into the pockets of old rich people. Children live in poverty while the old live in decadence. No shit I don't want to contribute so that some old degenerate can spend my hard earned cash on another round of slots at the casino.
kaibee 8mo ago
> "the government made me spend 37% of my income on saving when I wanted to use it to raise kids." This is a particularly funny one tbh. A nation's kids _are_ the retirement plan. It doesn't matter how many numbers you put in spreadsheets dated for 20-40 years into the future, if in said future, there isn't actually anyone to accept those numbers in exchange for labor.
nancyminusone 8mo ago
That seems like it causes a different category of problems than "I wish I had saved more but I didn't and now I have nothing"

Sytten 8mo ago

Forced savings like done in Quebec, Canada is likely the best model for most people even though I dont like it as an individual that knows how to manage its portfolio. It also has the benefit of creating a sovereign wealth fund that can invest locally and be an economic driver but independent from the government.

nick__m 8mo ago
I actually like the forced saving of Québec. I also have a defined benefit pension plan, a TFSA and RRSP but I am happy to be forced to contribute the RRQ for the general welfare of the province even though I know how manage my portfolio. Considering that they also have to consider economic development in their investment decisions, the RRQ funds are well managed by the CDPQ.

janalsncm 8mo ago

Numeracy questions are on page 20 here https://www.rand.org/content/dam/rand/pubs/working_papers/WR1200/WR1270/RAND_WR1270.pdf https://www.rand.org/content/dam/rand/pubs/working_papers/WR... People who score well on probability numeracy are likely better educated and better paid and have more in automatic savings plans. So if someone is maxing out their 401k they don’t feel they need to save more. The article shows that in the US there is a 25 point gap between high and low income on savings regret, and a 14 point gap between high and low numeracy scores. In Singapore where savings are more automatic numeracy is a more powerful predictor.

solarisos 8mo ago

The 'saving' vs. 'investing' debate here has a direct parallel in technical debt. Singapore’s model of high-efficiency reinvestment is like a well-refactored codebase—it allows for rapid pivots when a shock hits. America’s model feels more like a legacy system with massive technical debt; the 'savings' are there, but the friction of the existing infrastructure makes it nearly impossible to deploy them effectively during a crisis.

wraptile 8mo ago

Comparing any country to Singapore is frankly ridiculous. Singapore is a unique tiny tax haven where billionaires send their kids to study. To compare it to the biggest economy in the world just seems silly.

deepsun 8mo ago

Did US have economic shocks? Compared to, say, Eastern Europe or Sub-Saharan Africa, all people who lived through real economic shocks and hyper-inflation tend to save less, not more. Because they know the savings can evaporate one day.

10000truths 8mo ago
They absolutely save. Just not in their own currency - they'll instead rush to cash out for gold, USD, prime real estate (if they're rich), or some other less volatile store of value, before their currency gets devalued even further.
- deepsun 7mo ago
  Gold and USD is easily stolen, especially if stored in a bank. Prime real estate will find a new owner (e.g. the case I saw myself -- surprise, turns out the seller, even if's the government/municipality itself, did not have rights to sell you the land 15 years ago, good bye). Been there, done that.

choonway 8mo ago

if something doesn’t exist in this world, no amount of money will guarantee that you will get it. if it exists in abundance like the air that we breathe no amount of conspiracy will be able to monopolize it. finance only works in a very narrow band of environmental conditions. we are very well past that.

deleted 8mo ago

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shevy-java 8mo ago

Singapore, despite some of its laws being rather harsh, also had very intelligent leaders. Lee Kuan Yew was one of them; he correctly analysed the US behaviour. That can be seen on youtube too. https://www.youtube.com/watch?v=vNQXLhIcPrc https://www.youtube.com/watch?v=vNQXLhIcPrc What I find interesting about Singapore is that it is a fairly small country: a bit over 6 million people. That's small compared to the USA (341 million). When you are such a small country or city-country, being prosperous requires intelligence and efficiency. And diplomatic skills too. Taiwan also showed this, though it is a bit larger than Singapore (23.4 million). It seems that this is a good success story - to have competent and intelligent workers and people. Education is one key factor of success here.

AdamN 8mo ago
It's sort of a small country but bigger than Finland, Denmark, Ireland, New Zealand, Qatar. It's actually right about in the middle in terms of population.

bdbdbdb 7mo ago

Maybe I missed something in the article but why Singapore and not a country closer in culture to the US? Like why not compare to Canada or the UK, or anywhere in Europe? Did the study have to go as far as Singapore to find somewhere where the situation was reversed or was there another factor?

inanutshellus 7mo ago
A few days ago there was a discussion about how Singapore forces their people to save and invest in bonds. The country makes money on the difference between the daily/compound rates and it keeps their workforce working. In other words, I suspect it's "we started with Singapore then compared to America" not the other way around.