HOME EQUITY AND RETIREMENT PLANNING FOR HDB ELDERLY HOUSEHOLDS

Abstract

There is a growing concern of Singaporeans having too little CPF savings in their accounts because it is used up for the purchase of their homes. This may eventually lead to an assetrich, cash-poor situation or inadequate savings for retirement. Hence, this study examines the attitudes of HDB elderly households using home equity through possible reverse mortgage schemes. The main findings indicates the majority of the respondents prefer to maintain home equity at the same level, as most of them do not have plans for their retirement home, or prefer to stay on in their existing home, probably because they feel sentimental to their own home. More than three-quarters of the respondents are not aware of the reverse mortgage scheme, and the majority do not consider taking up such a scheme. Thus, the elderly are not very receptive to reverse mortgages. A possible reason is that they are not familiar with such a scheme due to the low educational standards of this group. Planning for retirement is thus important for elderly Singaporeans. Most respondents expect financial support from their children as 76% of them agreed that CPF savings alone are not enough to sustain through their retirement. The government and relevant authorities could come up with various schemes to help the retirees to get jobs, and probably educate the public through the various media so that the proper message can be reached to the whole community.