Longer

(cont'd)

What would happen if our lifespan rises from 80 to 90 (which is close to what happened in Hong Kong over the past 20 years) ?

In that case, we need around $2.7 million at the time of retirement, and we need to save $3700 to achieve that purpose - a nearly 40% rise in the amount of regular saving.

More so, if we could start working from the age of 25 rather than 20, we need to chip in nearly $4500 each month.

Now, what would happen if could live for another 5 years ?

Alas, we then need slightly more than $3 million at retirement, or $5000 for monthly saving (i.e. half of our desired expenditure).

You think this kind of calculation irrelevant ? It is one of the major reasons why GM, the giant of American industry, falls. Obliged to take care of all living and medical expenditure of her retired employee, and with an ever-rising lifespan, the company could go nowhere except filing for Chapter 11.

PS. Of course the strategy of GM on handling the increasing pension is nothing more or less than absurd; they rise the price of their product - so that their market share inevitably falls.

Do they ever study secondary school economics ?