FINANCIAL SECURITY FOR SINGAPORE RETIREES AND THE ROLE OF OWNER-OCCUPIED HOUSING

Abstract

Singapore, like many developed countries, has experienced rapidly ageing population For economic and social reasons, the question of elderly people's capability to remain financially independent has attracted significant attention The traditional role of CPF as a retirement security has proven to be inadequate. With large amount of CPF savings committed into housing purchase, the remaining sum can hardly provide sufficiently for the entire retirement stage, as cost of living rises and life expectancy increases. Therefore, this study set out to investigate the Singaporeans' attitude towards early retirement planning, possible channels for Singaporeans to fund retirement, and the role of housing as a factor influencing financial capability in retirement. Literature review and surveys through direct correspondence with survey respondents and relevant financial consultants, led to the conclusion that the most Singaporeans have invested significantly in property, and at the same time set aside some resources for future retirement. However, it is suggested that the great asset value tied up in property should be put to better use. For many people, property asset could be the only valuable asset owned, thus it will be extremely helpful if physical assets can be converted to cash to finance retirement. In view of these findings, it has been recommended that the HDB Flat owners should be granted with the option of using reverse mortgage. The government could address to the issue of excessive property investment, which often leads to poorer financial capability in retirement, by monitoring upgrading behaviours.