One’s home is a major concern when it comes to retirement planning. If you are unsure what to do with yours when you retire, here’s what you need to know.
By Cheryl Marie Tay
Does freehold mean more freedom?
If you own a freehold condominium or landed home (999-year leasehold homes are considered freehold due to their similar values and lack of bank loan limits), you have a number of options in deciding its fate when planning for retirement. You can choose to live there until the end of your life, whereupon your will must be carried out. If you have willed the home to your next of kin with no specific instructions regarding its use, they must decide whether they want to live in it, lease it out or sell it.
If, however, you have not drawn up a will, there are a few possible outcomes: if you are survived by only your spouse, he / she will take over ownership of the home. If you are survived by no one, the government will take over the home. Other surviving family members, be they your parents, grandparents, children, uncles, aunts or siblings, will usually have an equal share in the house, with a few exceptions. You can find out more here: bit.ly/1ZHWCHz.
Smaller home, bigger retirement fund
A popular option among retirees is to sell their private homes and downgrade to HDB flats, or to sell their current HDB flats and downgrade to smaller flats. Doing so allows you to save more money for your old age, which is especially useful if you do not have anyone supporting you financially. There are HDB schemes for the elderly, such as the Lease Buyback Scheme (LBS), which you qualify for if your current HDB flat is a four-room unit or smaller. More information is available on HDB’s website (bit.ly/1S1MVQx).
Choices for lower-income senior households
If your gross monthly household income is $12,000 and below, you are eligible for the Silver Housing Bonus (SHB) to supplement your CPF Retirement Account when you downgrade to a smaller flat (bit.ly/1VRhWKN). Most recently, the 2-room Flexi Flat Scheme was introduced, allowing senior citizens to choose the length of the lease on their two-room flats. You can find out on the HDB website if you are eligible for the scheme (bit.ly/1StqN2c).
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This article was first published in the print version The PropertyGuru News & Views. Download PDF of full print issues or read more stories now! | ||