The financial planning of one's retirement needs is the joint responsibility of the people and government, says National Development Minister Mah Bow Tan. The Government will do its part through incentives and programmes such as the lease buy-back scheme.
And one component of the scheme which allows elderly HDB residents to cash in on their flats will ride on the Longevity Insurance.
Speaking to residents from the North East District on Saturday, the Minister says Singaporeans must play a part to secure their retirement.
This is why the Government wants Singaporeans to work for as long as they could, and buy a longevity insurance so that those who live beyond 85.
Mr Mah says: "We have to encourage and explain to them that retirement adequacy has to be a joint responsibility between the Government and the people. Government will contribute in his lifetime through subsidised housing, and now through the various incentives - Workfare, the WIS Scheme, plus all the cash top ups that take place from time to time."
Mr Mah adds that, on its part, the Government has over the years helped build up Singaporeans' nest egg, and helping them acquire their biggest asset which is to buy their own flats through subsidised housing.
The proposed lease buy-back scheme is another way in which the Government hopes to offer Singaporeans a steady retirement income.
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Retirement funding a shared responsibility between people and govt
He says: "The scheme will also have a connection to the CPF Longevity Insurance Scheme. Because one part of the lease buy-back scheme will also involve a Longevity Insurance. So I want to ride on the Scheme that will be finalised by the CPF Board. The house is a very very major asset. But once you're able to unlock it, people will realise that it'll also contribute significantly to their retirement.
"It will not be totally adequate because obviously there has to be other schemes in place as well. This is why I hope that the lease buy-back scheme, plus the CPF minimum sum scheme, together will ensure that there's adequacy in retirement."
Mr Mah says the lease buy-back scheme will be an attractive one offering various options catering to differing needs.
Residents could continue to live in the flat without disruption to their lives.
Mr Mah says: "The Lease Buy-Back Scheme will consist of three components. On the upfront, a cash component. Second component which pays a certain sum of money up to a certain age. And a third component which is an insurance component which pays a certain sum of money after that age.
"And so if, for example, that age is 85 - if you live beyond age 85, you will be assured of a payment after 85. Before age 85, you'll be assured of a payment from the second component."
The scheme has three components and the exact amounts will be finalised early next year.
Mr Mah also launched the North East CommunIty CONnectors Network which aims to equip the elderly with Life Needs, Life Skills and Life Style. - CNA/ch
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