RETIREMENT PLANNING - HOUSING OPTIONS FOR HDB DWELLERS

Abstract

Singapore has a rapidly ageing population and many are not confident of having sufficient finances to fund their retirement. This is a cause for concern. However, with the high housing equity in Singapore - 93 per cent of Singaporeans are home owners, financing retirement with housing equity is a viable option to be explored, especially for the low income earners. In addition, the decrease in support ratio and fertility rate implies that the elderly have to live more independently. Hence, the housing option of living in a retirement village seems attractive as it would be able to provide the elderly with a secure environment. This dissertation aims to find out how the level of financial knowledge, family values and perception on longevity risk differ across age groups of people (aged 30 years and above), and if the above three factors would affect housing options – downsizing, taking up a reverse mortgage and living in a retirement village. A survey of 180 HDB flat dwellers aged thirty and above found that the level of financial knowledge does not affect housing options, while family values generally do. Those who hold on to traditional family values are in general less willing to explore any of the above housing options. Also, those who feel more threatened by longevity risk are more willing to live in a retirement village. As the age group increases, respondents feel more threatened by longevity risk and their traditional family values strengthen, implying that the housing options for retirement would change over generations.